Years into a successful partnership, Raymond James Public Finance found new ways for a community to help its residents pursue the American dream.
Raymond James owes much of its progress to its past. We match a commitment to expanding our businesses in new directions with a knack for cultivating, and continually evolving, long-term relationships.
That ongoing investment in the potential of our established partners has always been a key aspect of the firm’s success, and we continued building on those foundations in 2016.
Raymond James is home to one of the most productive and dynamic public finance practices in the industry and consistently ranks among the top 10 senior managing underwriters of U.S. municipal bonds. In 2016 alone, the firm senior managed 812 negotiated and competitive issues worth in excess of $16.1 billion. And much of that record productivity can be attributed to long-held relationships.
Eighteen years after they began doing business in Arizona, members of Raymond James Public Finance’s housing team marked a new milestone.
In September 2016, Home in Five Advantage, a mortgage origination program (MOP) that has helped 13,000 low- and moderate-income families buy their first homes, celebrated its fourth anniversary – and one of its most successful quarters to date, with new loans up 12.4%.
A joint effort between Raymond James and the industrial development authorities (IDAs) of Maricopa County and Phoenix, Home in Five benefits not only from an innovative financing mechanism, but also from the long and unique relationship between its key players.
Raymond James started doing single-family bond work with Maricopa County in 1998. Next, the group expanded its local footprint to include projects with the city of Phoenix. Then in 2006, something interesting happened when the team began working jointly with both IDAs.
“When we’re working on projects like this, it’s almost always with one entity,” said Mark O’Brien, senior banker with Public Finance’s housing group. “This is certainly unique in the fact that it’s a nice, cooperative relationship between the city and the county – each with its own board of directors, its own staff.”
Beyond its novel leadership, the program, which offers qualified buyers competitively priced 30-year fixed-rate mortgage loans, as well as grants for down payment assistance and closing costs, also employs a pioneering financing structure.
MOPs are traditionally funded through the sale of single-family bonds, but Home in Five was one of the first programs in the country, and the first in the state of Arizona, to employ an innovative non-bond structure. This means Home in Five is exempt from some of the income and homebuyer restrictions traditional bond programs require, so it can reach a wider range of applicants. This kind of ingenuity has been a hallmark of the partnership between Raymond James and the IDAs from the start.
“Over the years, an exceeding amount of creativity and a long string of innovations have gone into helping the IDAs fulfill their missions. Our history with them has been a critical factor in helping them expand their efforts in new ways,” said Bob Coleman, managing director of Raymond James Public Finance’s housing group. Bob also believes the depth of the relationship is as vital as its longevity. “We are not just helping them with the financing aspects of this. We’ve helped them with marketing. We’ve helped them recruit lenders. So, it’s not just ‘put the financing mechanism in place and go.’ We provide very active, comprehensive service.”
“We’re working on this program daily. Whether it’s supporting lenders, taking calls from borrowers or assisting issuers, we’re heavily involved in and committed to its ongoing success,” added banker Stacy Houston.
As of the third quarter of 2016, Home in Five had partnered with 113 different private sector mortgage and lending partners and reported just over $2.3 billion in total loan volume and more than $90 million in down payment grants. The scale of these numbers is reflected by the impact the program has had on the community.
“We think it’s been particularly important for this area, because Phoenix and Maricopa County, what they call the Valley of the Sun, was a ground zero area for the foreclosure crisis,” according to Mark.
Another powerful measure of the program’s success is the diversity of its loan recipients. “Roughly 47% of homebuyers belong to minority groups, and 39% are female-headed households. And though the non-bond structure doesn’t require it, more than 99.5% are first-time homebuyers,” Mark shared. “They’re achieving a key part of the American dream via this program.”
In addition to fulfilling individual dreams, Home in Five also has a multiplying effect for the community at large. Each IDA has taken the additional revenues generated by the program and directed them toward other economic and community development projects. So far that reinvestment has taken two primary forms.
One of the efforts enables the IDAs to provide extra assistance for hometown heroes. Using a portion of the revenues, Home in Five offers an additional 1% of down payment assistance to first responders, including police, firefighters and emergency personnel, as well as teachers, members of the military and veterans. Another initiative has seen the IDAs make joint grants to fund homeless services. In particular, efforts have been focused on supporting the Human Services Campus in downtown Phoenix, which provides resources, meals and short-term housing.
As Mark sees it, these effects could go right on multiplying. “This is a housing program that is using its additional proceeds to help the homeless, who, thanks to that support, may one day be able to utilize Home in Five themselves.”