Ohio Revenue Bond Official Statement Signals Expected Use for Subprime ARM Refinancing.

A recent housing revenue bond offical statement (Series J) from Ohio signals the expected use of mortgage revenue bonds for refinancing of ARM/sub prime loans, as permitted by this summer's housing legislation and extra bond allocation to states.

I have posted the full official statement HERE. The relevant language is found on page 39:

"In April, 2007, OHFA began a program to assist homebuyers who do not qualify under the First-Time Homebuyer Program to refinance existing mortgages (the "Refinancing Program"). To date, OHFA has not financed the purchase of mortgage loans originated under the Refinancing Program with bonds issued on a parity with the Residential Mortgage Revenue Bonds issued under the Trust Indenture, but instead has financed the Refinancing Program from other sources. HERA recently enacted by Congress and signed by the President on July 30, 2008. HERA permits the use of proceeds of tax-exempt bonds, such as the Bonds, to finance the purchase of certain qualifying mortgage loans originated to refinance existing mortgages. OHFA expects to implement a program to enable it, as permitted by HERA, to finance the purchase of qualifying refinance mortgage loans under the Refinancing Program or other programs of OHFA with Residential Mortgage Revenue Bonds issued under the Trust Indenture. This program, if implemented, may apply to the use of the proceeds of the Bonds."