New Hampshire Raises Housing Finance Authority Bond Caps to $1 Billion

New Hampshire has raised the statutory financing limits for the New Hampshire Housing Finance Authority to $1 billion in each of three separate categories, with the changes taking effect Sunday, September 13. The law replaces previous limits of $600 million, $800 million and $600 million under RSA 204-C:28, the section governing the authority’s general obligations.

The change gives New Hampshire Housing more room to issue notes and bonds for housing finance activities, but it does not authorize an immediate $3 billion bond sale. It also does not convert the authority’s obligations into state debt. New Hampshire Housing is a legally separate public instrumentality, and state law says its obligations are payable from the authority’s revenues or assets rather than from a pledge of the state’s taxing power.

Three separate statutory caps now converge at $1 billion

The current text of RSA 204-C:28, amended by HB 1042 and enacted as Chapter 320, now carries all three $1 billion limits. The measure was approved July 15 and took effect 60 days after passage, on September 13.

Paragraph I now limits outstanding obligations, other than obligations covered by paragraph II, to $1 billion in unpaid principal. That cap had been $600 million. The statute also excludes obligations that are being refunded, or are to be refunded from new obligations, when calculating the amount outstanding for purposes of the limit.

A second category, paragraph II, increases a separate bonding limit from $800 million to $1 billion. That authority is tied to specified housing purposes, including loans and mortgage loans for the acquisition, construction or rehabilitation of owner-occupied housing with no more than four units. It also covers certain loans or advances for improvements, down payments, closing costs and other initial expenses associated with acquiring, financing or refinancing qualifying housing, along with related reserves and issuance expenses.

The third category, paragraph III, raises its limit from $600 million to $1 billion. Those notes and bonds may be issued for any purpose authorized under the housing finance authority’s governing chapter, subject to the other terms of the statute. Taken together, the three numerical ceilings now total $3 billion, up from $2 billion under the prior version of RSA 204-C:28, but they remain distinct statutory categories rather than one undifferentiated borrowing authorization.

More headroom does not mean an immediate $3 billion issuance

HB 1042 changes the maximum amounts permitted under the statute. It does not direct New Hampshire Housing to issue a specified amount of debt, set an issuance schedule or appropriate money to the authority. Individual notes and bonds still have to be authorized through the authority’s existing financing process, including board resolutions that establish the terms of an issue.

The distinction is important because the authority finances housing through multiple programs and bond structures. State law allows its bonds to be sold publicly or privately, and bonds may have maturities of as long as 50 years. The authority also has separate statutory power to issue refunding bonds, which can be used to retire or refinance outstanding obligations under the conditions set out in law.

New Hampshire law also draws a clear line between the authority’s obligations and the state’s own credit. RSA 204-C:44 says obligations issued under the chapter are not debts or liabilities of the state or its political subdivisions and do not pledge their faith, credit or taxing power. The authority is responsible for payment from revenues or assets pledged to its obligations. Raising the statutory caps therefore expands the authority’s financing capacity without creating a blanket state guarantee for the additional amount.

The scale of New Hampshire Housing’s existing financing activity helps put the change in context. In its fiscal 2025 audited financial statements, the authority reported $458.9 million of bond issuance during the year and a bonds-payable balance of about $1.247 billion at June 30, 2025, up from about $853.7 million a year earlier. The statements reported $27.6 million payable within one year.

That accounting balance should not be compared directly with any single $1 billion ceiling in the amended statute. The financial statements cover the authority’s outstanding bond programs as a whole, while RSA 204-C:28 divides borrowing authority into separate legal categories and contains its own rules for calculating outstanding obligations. The new law changes those statutory boundaries; it does not restate the accounting balance reported in the authority’s financial statements.

Mortgage revenue bonds are already a major funding channel

New Hampshire Housing’s current program plan shows how bond financing feeds into its housing work. For fiscal 2026, the authority planned $276.2 million of mortgage purchases through its Home First Mortgage Revenue Bond program, covering an estimated 870 loan purchases with an average loan amount of about $318,000. In fiscal 2025, the program recorded $228.8 million of mortgage purchases across 742 loans.

The same fiscal 2026 plan allocated $78 million of bond proceeds to tax-exempt multifamily housing activity. Those figures are program plans rather than commitments to use the newly expanded statutory limits, but they show that bond proceeds are an operating funding source for both homeownership and multifamily housing finance rather than an unused or purely theoretical authority.

The broader statute gives New Hampshire Housing power to issue bonds and notes to support its corporate purposes, including making and purchasing mortgage loans, lending to financial institutions, paying interest on its obligations and establishing reserves. The $1 billion caps in HB 1042 provide more room within that framework as financing needs and outstanding balances change over time.

HB 1042 does not itself change mortgage rates, borrower eligibility rules or the terms of a specific affordable housing development. Its immediate effect is narrower: it raises the legal ceilings on how much New Hampshire Housing may have outstanding or issue under the three categories in RSA 204-C:28. Whether the added capacity is used, and how quickly, will depend on future bond programs and financing decisions by the authority.