CHFA-262-RFP for Issuer/Seller/Servicer (Single Family)

Agency: Connecticut Housing Finance Authority
State: Connecticut
Type of Government: State & Local
NAICS Category:
  • 236220 - Commercial and Institutional Building Construction
Posted Date: Oct 3, 2023
Due Date: Nov 1, 2023
Bid Source: Please Login to View Page
Contact information: Please Login to View Page
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RFP Post Date Due Date Additional Documents
CHFA-262-RFP for Issuer/Seller/Servicer (Single Family) 10/03/23 11/01/23 4:00 p.m.

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Dear Interested Party:
Date: October 3, 2023
REQUEST FOR PROPOSALS FOR
ISSUER/SELLER/SERVICER (SINGLE FAMILY)
The Connecticut Housing Finance Authority (“CHFA”) requests written proposals from qualified
issuers/sellers/servicers (the “Servicers”) to purchase, securitize (or pool) and service qualified
CHFA first-time homebuyers’ first mortgage loans into mortgage-backed securities (the “MBS”)
and purchase and service the corresponding CHFA second and third mortgage loans or
downpayment assistance program and time to own program loans, each as described below. CHFA
will not reimburse for any expenses incurred in connection with this Request for Proposals
(“RFP”) including, but not limited to, the cost of preparing the initial response and any additional
information requested or travel expenses relating to any oral presentation. Please be advised that
responses will be considered property of CHFA, are matters of public record, and may be disclosed
by CHFA after the awarding of a contract.
OVERVIEW
CHFA, a body politic and corporate constituting a public instrumentality and political subdivision
of the State of Connecticut, was created in 1969 and operates pursuant to Chapter 134 of the
Connecticut General Statutes, as amended. CHFA’s purpose is to help alleviate the shortage of
affordable housing for low-income and moderate-income families and persons in Connecticut by
providing single family mortgages, financing for rental housing, and mortgages for the purchase,
development and construction of housing.
For additional information about CHFA, please reference CHFA’s website at www.chfa.org.
SCOPE OF SERVICES (the “Services”)
The duties of the Servicers shall include, but are not limited to:
1. Purchase qualified CHFA first-time homebuyers first mortgage loans from its approved
participating lenders and pool the loans into:
a. Ginnie Mae (the “GNMA”) certificates,
b. Fannie Mae (the “FNMA”) mortgage-backed securities or
c. Freddie Mac (the “FHLMC”) mortgage-backed securities.
2. Purchase corresponding CHFA second and third mortgage loans and service the loans in
accordance with its guidelines.
3. Perform all servicing activities based on the guidelines and requirements of CHFA, FHA,
VA, USDA/RD, and private mortgage insurance, as applicable.
4. Create custom pools such as GNMA II or FNMA Majors.
5. Create small pools (less than $500,000) subject to GNMA, FNMA or FHLMC approval.
6. Execute FNMA and FHLMC Buy Ups or Downs.
7. Process Loan-Level Price Adjustments (LLPA)
8. Execute through the TBA market as necessary.
9. Provide reports as required by CHFA’s bond resolution, homeownership, Down Payment
Assistance (“DAP”) and Time to Own (“TTO”) program documents.
The proposed engagement will be for a period of three years or as determined by CHFA
Procedures, and it is expected to begin with loans reserved on or after January 2, 2024.
Historically, CHFA has purchased approximately $350,000,000 to 500,000,000 of single family
first mortgage loans annually, funded primarily through tax-exempt bonds. CHFA makes no
assurance that the funding source will always be from such bonds. The loans are originated by
participating lenders throughout the State. Once purchased from participating lenders, the loans
and MBS are pledged to the bonds.
Time Period
YTD as of 8/23/2023
1/1/2022 - 12/31/2022
Total Volume
Dollars
Count
$408 million 1,775
$356 million 1,696
% MBS
86%
84%
% GNMA
37%
42%
% FNMA % FHLMC
33%
16%
34%
8%
% with
DAP
79%
73%
DAP
Amount
15,200
$14,600
Borrowers may be eligible for Connecticut’s Downpayment Assistance Program (“DAP”). These
are second mortgage loans carrying interest rates from as low as 1% up to the same interest rate as
the first mortgage, depending upon the DAP guidelines at the time of commitment. The term of
the second mortgage loan is the same as the first mortgage loan and amortizes over 30 years. The
program is subject to future changes. Additional down payment assistance is available to CHFA
borrowers through the State of Connecticut’s Time To Own (“TTO”) program, administered by
CHFA. Launched in the summer of 2022, the TTO program provides a down payment assistance
loan up to $50,000 structured as a 10-year 0% non-amortizing loan, of which 1/10 of the principal
amount will be forgiven on the anniversary of the loan closing each year until fully forgiven.
Eligibility is limited based on the borrower’s income and the loan amount is based on the
borrower’s financial needs and property location. For the year ending 2022, 597 CHFA borrowers
received a TTO loan totaling $18.5 million with an average loan size of $31,000 per borrower.
YTD as of July 31, 2023, 962 CHFA borrowers received a TTO loan totaling $29.3 million with
an average loan size of $30,400. The TTO program has limited funding approved through June 30,
2025.
CHFA reserves the right to securitize a portion or all qualified first mortgage loans and may use
one or more qualified Servicers to achieve this. For more information about CHFA, including its
homeownership program, bond program, DAP, TTO and audited financial statements, please visit
www.chfa.org or www.emma.msrb.org.
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The following documents provide a general overview of CHFA’s single family program:
a. 2023B Official Statement
b. https://www.chfa.org/assets/1/19/2022_Audited_Financial_Statements.pdf?12370
Additional information about CHFA’s single family program may be found at
https://www.chfa.org/homebuyers/all-homebuyer-mortgage-programs/
No joint venture or subcontractors will be accepted. CHFA requires all Services to be provided
by a single firm.
EVALUATION CRITERIA
Servicers will be evaluated on the basis of written responses to this RFP, additional written
information as requested by CHFA, online demonstration, and oral interviews, if any, against the
following, but not limited to, criteria:
1. Reputation and experience of the Servicer
2. Responsiveness to CHFA’s needs
3. Experience with the State Housing Finance Agencies (the “HFAs”)
4. Approved by GNMA, FNMA and FHLMC as issuer/seller/servicer
5. Good standing with GNMA, FNMA, FHLMC
6. Competitiveness of proposed cost
7. Software capabilities to provide the requested Services such as interfacing with
participating lenders and CHFA
8. Financial capability to provide the requested Services and overall financial stability
9. Commitment to Connecticut
CHFA may select multiple Servicers to perform the services described herein. No selected
Servicer is guaranteed or ensured any number of contracts or proportion of business.
REQUESTED INFORMATION
Each respondent must address the following issues and questions:
1. Provide a brief description of the firm in providing the Services as described in this RFP.
2. Are you an approved single family GNMA, FNMA or FHLMC issuer/seller/servicer?
Describe your full range of servicing experience and activities. Indicate and provide
evidence as necessary, whether you are in good standing with GNMA, FNMA, FHLMC,
FHA, VA, and USDA/RD.
3. Indicate the total number of staff in your firm and the number of staff that you expect to
assign to this engagement. Please list those people with their résumés. What are their other
responsibilities?
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4. Describe your firm's experience with HFAs. Which HFAs (or other similarly sized clients)
do you represent and provide similar Services? Provide three (3) references with names,
phone numbers and email addresses. Please also include as references any other State of
Connecticut agencies or departments that have engaged your firm to perform services.
5. Provide a summary of the key strengths and qualifications of your firm to provide the
Services required by CHFA. List, in order, what you think are the four most important
functions you would perform for CHFA.
6. What is your experience in dealing with the requirements for mortgages funded all or in
part with tax-exempt bonds? What about financing MBS through TBA or other available
markets? What about custom pools and Buy Ups or Downs?
7. What is your view on and experience with Third Party Originators (TPOs)?
8. Describe your firm’s information technology capabilities. Describe your firm’s experience
and interaction with other HFAs relating to interfacing, exchanging and transferring
required loan data.
9. Describe your current reporting capabilities. Are you able to supply the required data in
[.csv/.xlsx] as presented in Exhibit B and B1. CHFA also requires a nightly transmission
of data to and from CHFA and the Servicer illustrated in Exhibit C.
10. Describe how you would envision the process with CHFA working, from loan origination
to loan funding to MBS pooling to reporting.
11. What would be your turnaround time from loan closing by a participating lender to loan
purchase by your company to MBS settlement with CHFA and by type (GNMA, FNMA,
and FHLMC)?
12. Furnish evidence of your firm’s financial stability.
13. Do you have a warehousing facility that would enable you to buy loans as they are
originated and aggregate them into an MBS?
14. Describe your servicing experience with down payment assistance mortgages or other
forms of junior mortgages. CHFA’s servicing requirements can be found in Sections 11
and 12 of its Operating Manual of the Lender Guide available on the CHFA website.
https://www.chfa.org/assets/1/6/operating_manual_-
_section_11_investor_reporting_and_remittance_guidelines_rev__4-2017.pdf
15. Describe whether you foresee any potential conflicts of interest arising from providing the
services to CHFA. If so, describe how your firm would address potential conflicts of
interest.
16. Provide a fixed or flat rate fee based upon the Services as described in this RFP by
completing Attachment 1, bid form (the “Bid Form”). If your firm would like to suggest
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an alternative fee structure, please provide it under Option 3 of the Bid Form. Please
indicate whether any of the fee options offered vary based upon loan volume (e.g. for the
first $100 million = x between $100 million and $200 million = y). Any alternative fee
structure must be in a format that will allow CHFA to compute the annual cost of the
Services. Please submit the Bid Form to CHFA under a separate cover.
17. Describe your presence in Connecticut, if any, including corporate existence in
Connecticut, whether formed in Connecticut or authorized to do business in the state. This
may include, but not be limited to, information on the number of offices your firm
maintains in Connecticut, the location of such offices, the number of Connecticut residents
employed in those offices, and payroll and corporate taxes paid in Connecticut. If your
firm currently is not registered with the Connecticut Secretary of State, please indicate
whether your firm will register if your firm is awarded this contract.
18. Describe any services your firm performs for other Connecticut clients or any other
connections or commitments that it has in Connecticut.
19. Include any participation by your firm in any civic or other non-profit activities, including
any charitable contributions that your firm made in Connecticut.
20. Provide, in tabular form, information on the employee composition of your firm indicating
the total number of employees and the total number and percentages of minorities and
women employed and their titles.
21. Submit specific information regarding your firm’s commitment to Affirmative Action
and/or Diversity, Equity and Inclusion. Please include, at a minimum, policies and
practices, including but not limited to hiring practices, and any information that would
demonstrate your firm’s commitment to expanding diversity in the workplace, including
recruiting initiatives, retention and promotion efforts and ongoing assessment of your
firm’s progress with respect to underrepresented groups (e.g. in terms of ethnicity, gender,
sexual orientation, disability, etc). Please include your firm's most recent EEO-1 report
if required to file.
22. Describe your firm’s commitment to diversity, education and training of the next
generation of workers in your profession. Please include:
a. A brief description of any internship programs your firm offers and the applicable
percentage of the internships for the underrepresented groups.
b. A brief description of any scholarships your firm provides to students and the
applicable percentage of the underrepresented recipients.
23. Does your firm have a written policy, program or initiatives to foster business relationships
with the underrepresented groups? If so, please provide details of the program and the
percentage of business conducted with those groups.
24. Describe any and all material lawsuits, legal or administrative proceedings or governmental
investigations, criminal actions or law enforcement activities (including those by federal,
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