WASHINGTON -- The Department of Housing and Urban Development has decided once again to move forward with auctions of more than $12 billion of federally insured 40-year multifamily housing loans, with plans to begin the loan sales in mid-January, a HUD official said yesterday.

Several months ago, the department set Sept. 23, 1991, as the date for the first sale, but it postponed that auction indefinitely because of unspecified concerns about the loan process.

The HUD official declined to say yesterday why the department had a change of heart and is now willing to start the loan sales, other than to say the original concerns have been resolved.

Six weeks before the first sale is to take place, the department will publish an announcement detailing which loans will be sold in that auction, the official said. That announcement will also lay out procedures for the auction.

Congress directed HUD to sell the loans to the private sector through legislation enacted in 1990. Before that legislation was passed, lenders holding the mortgages were expected to start exercising put options and turn the loans back to HUD. The new law allows HUD to sell the loans to the private sector, so the department can keep the loans off its books.

Some of the loans were financed using tax-exempt multifamily housing bonds, about $1 billion of which were insured by Municipal Bond Investors Assurance Corp. The bonds carry matutiries that coincide with the timing of the put option, and MBIA officials have said the loan sales may offer a less risky way of paying off the bonds than would have been the case with the put option.

The loans to be auctioned were originated between the late 1960s and 1983 under Section 221 of the housing code to provide low-income multifamily housing units. HUD offered the option of putting the loans back to the agency after 20 years because it was having difficulty encouraging lenders to make loans with 40-year maturities.

As the 20th anniversary approached for many of the loans in 1990, HUD became concerned about the expense of taking back the loans. The legislation passed last year directs the department to sell the loans through auctions, where investors will bid on what interest rate it would take to accept the loans at par.

The rescheduling of the loan sale will be particularly welcome news to anyone who has been trading the mortgages in the open market, said Robin Salomon, a housing lobbyist with the law firm of Brownstein, Zeidman & Schomer.

Before the 1990 statute was passed, the loans containing put options were trading in the market at around 96. But since HUD said several months ago it would auction the loans at par, traders have been buying and selling the loans at or near par, in anticipation of those auctions.

When the auctions were put on hold, that created uncertainty for market participants who had purchased the loans at or near par. They became concerned the auctions might never take place and that they would end up taking a loss on the loans they held.

In pricing these mortgages, the market "has assumed the law would be implemented, and bankers have educated their clients accordingly," Mr. Salomon said, "If HUD had canceled the auction, they would probably have felt obliged to compensate their clients for any losses."

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