The credit crunch has claimed another group of victims: housing-finance agencies operated by state governments that cater to first-time homeowners.
All states have housing-finance agencies, which either originate mortgage loans to state residents or guarantee loans made by lenders. In 2007, state housing agencies issued $17 billion in bonds that funded 126,611 mortgages. In 2008, some agencies were on track to exceed 2007's levels, until September when the credit markets froze.
Now, at a time when housing-finance agencies' services are needed more than ever, most states have sharply curtailed their housing-finance operations. A handful of states, including California, Texas and Wisconsin, have suspended their mortgage-lending programs altogether.
Wall Street Journal