The director of the Kentucky Housing Corp. says the agency is starting to see the housing market bounce back from the economic downturn that began in 2008.
According to the Messenger-Inquirer, Rick McQuady told the Green River Area Development District Board of Directors that the state housing finance agency has seen "an increased demand for low- and moderate-income home ownership" and is starting to make money again.
Before 2008, McQuady said housing investments would turn a 4 to 5 percent profit.
"We were borrowing at 4.5 percent and loaning it out at 5.5 percent, so we were making money and that would pay our operating expenses."
Afterward, the delinquency and foreclosure rates rose from around 5 percent to about 20 percent.
He said the bond market wasn't as favorable for housing for low- and moderate-income families after the housing bust.
"There was a perception that that's what got us in that mess in the first place," McQuady said. "So we were in a jam. You can't issue bonds at 4 percent and do mortgages at 3 percent. That's not how you make money."
McQuady said since then the KHC has refinanced many of its loans to retire debt and created a secondary bond program to offer market-rate mortgages that include assistance with down payment and closing costs.
"That way we can assist low- and moderate-income families get into their first home," he said. "It's become very successful."