Single Family Housing

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Working with more than 50 state and local housing finance agencies across the nation, Kutak Rock is recognized nationally for our expertise and experience in the financing of affordable single-family mortgages. We have served as bond counsel, special tax counsel, underwriter’s counsel, remarketing agent’s counsel, credit enhancer’s counsel and bond purchaser’s counsel in numerous single-family housing bond transactions. We regularly advise our agency clients on the particular structure of a bond issue as well as the permitted uses of housing bond proceeds, both under the federal tax code and applicable regulations as well as under applicable state laws governing the agency. Our advice ranges from providing analysis of the complicated rules applicable to “transferred proceeds” and the “universal cap” in a single-family bond refunding, often combined with new-money issues (sometimes including a taxable series), to advice with respect to allocations of proceeds among funds and accounts, and the integration of interest rate swaps in conjunction with floating rate debt. Our familiarity and experience with interpreting such laws provides value to our clients (both issuers and underwriters) as they structure particular single-family transactions. Often our involvement continues past the closing of the bond issue as we provide ongoing analysis and advice with respect to, for example, the most beneficial way for an agency to utilize proceeds in several acquisition accounts (i.e., the financing of mortgage loans from various bond sources), permitted yields on investments and the treatment thereof under federal tax laws and with respect to various document interpretation issues, as well as programmatic advice regarding the rules and criteria of FHA, VA, Rural Development, GNMA, FNMA and FHLMC.

Single‑family issues in which Kutak Rock has provided legal services have involved both single‑family and home improvement loan programs under stand‑alone and general resolutions/indentures, both whole loan and MBS programs and with bond structures including new‑money fixed‑rate issues, refundings and new‑money/refunding combinations, floating rate bonds, PAC bonds, convertible option bonds (COBs), escrow COBs, drawdown bonds, taxable bonds (including CMOs, REMICs and MBSs), zero coupon (CAB) bonds, mortgage refinancing/refunding issues, delayed and/or forward delivery programs and warehouse financing. In addition to our traditional agency representation, we have provided legal services in connection with single-family transactions as special counsel with respect to liquidity facility substitutions, replacements of remarketing agents and interest rate swap terminations/replacements.

In addition to providing day-to-day program advice, we assist many of our agency clients as they structure and restructure their lender program agreements and mortgage servicing arrangements. We also  provide advice in connection with agency conversions from whole loan to MBS and special FNMA programs, as well as the sale of MBSs and hedging agreements related to the “TBA” mortgage-backed securities market.

Because of our extensive knowledge in the area, we are often called upon by investment banking firms to represent them in single-family bond transactions, particularly in light of our ability to provide disclosure advice with respect to the offering documents used by the underwriting team in connection with the issuance of single-family bonds.