Working nationally with over two-thirds of the state housing finance agencies and numerous local housing finance agencies, Kutak Rock is recognized nationally for our skill and experience with single-family mortgage bonds to finance single-family mortgages. We have served as bond counsel, special tax counsel, disclosure 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 regulations as well as under applicable state laws. Our advice ranges from providing analysis of the complicated tax rules applicable to “transferred proceeds” and the “universal cap” in a single-family bond refunding, often combined with new-money issues, to advice with respect to allocations of proceeds among funds and accounts, the integration of interest rate swaps in conjunction with floating rate debt, or the tax-advantaged interplay with down payment assistance programs. Our familiarity and experience with interpreting such laws provides value to our clients (both issuers and underwriters) as they structure particular single-family transactions and integrate them with numerous parity debt issues. Often our involvement continues past the closing of the bond issue as we provide ongoing analysis and advice with respect to issues such as the most beneficial way for an agency to utilize proceeds in several acquisition accounts (i.e., the financing of mortgage loans from multiple bond sources), permitted yields on investments and the treatment thereof under federal tax laws, continuing disclosure obligations and various document interpretation issues, as well as programmatic advice regarding the rules and criteria of FHA, VA, Rural Development, GNMA, Fannie Mae, Freddie Mac and CFPB.
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 trustees, and interest rate swap terminations/replacements.
In addition to providing day-to-day program advice, we assist many of our agency clients as they modernize and simplify their lender program agreements and mortgage servicing arrangements. We also provide advice in connection with the sale of mortgage-backed securities (MBS) and hedging agreements (swaps and MSFTAs) related to the “TBA” MBS market.
Because of our extensive knowledge in the area, investment banking firms often call on us to advise 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.