JEFFERSON CITY, Mo. -- A low profile, relatively new state agency which doesn't even maintain an office in the state capital has increasingly provided an annual multibillion-dollar shot in the arm for Missouri's economy.

Bearing the obscure title of Missouri Housing Development Commission, the agency's founding was approved in 1969. After receiving a start-up loan of $150,000 from the state in 1970, a grant that has long ago been repaid, the agency has poured billions of dollars into underwriting hundreds of housing development projects and launching programs that have provided home-loan assistance to aid thousands of minimum- and low-income families.

The steady growth of new construction in the state in the recent years has placed Missouri ahead of many states in achieving development increases, even during the recent economic slowdown. This has also shielded the state from negative growth since Sept. 11.

Last year, MHDC generated more than $4 billion in new home starts. The amount has continued to grow since the agency underwrote its first project in 1970.

Funded by bonds

Loans generated by the agency are made to non-profit and limited-dividend sponsors of residential housing, and make funds available for the purchase of single-family homes at below-market interest rates by individuals. Funds for mortgage financing are provided by the sale of tax-exempt notes and bonds the commission is authorized to issue.

Additionally, the commission is authorized to establish a revolving fund to make non-interest-bearing loans to non-profit corporations to defray development costs of public housing projects. The agency even provides technical assistance in creating these development projects.

The commission also administers the federal government's low-income housing tax credits, as well as the state's low-income housing tax credit program and housing trust funds for low-income and homeless families. The nine-member panel also participates with the Department of Economic Development in preparing the state's annual overall improvement and growth projects.

Boost in 1986

The largest impetus for the scope of the agency's agenda came in 1986, when the federal low-income tax credit project came into existence, giving states the right to create their own building programs, issue tax credits for new-construction projects and authority to administer projects launched by the federal government in Washington.

The agency is under the direction of four elected state officials and five private citizens who are appointed by the governor. The elected officials are the governor, lieutenant governor, state treasurer and attorney general. Private-citizen members receive a per diem of $50 for days served during meetings, while elected officials receive no compensation.

The current commission chairman is Gary D. Collins, who represents the public, while another representative of the private sector, John R. Wilson, is secretary-treasurer.

A relatively small staff is headed by Erica A. Dobreff, executive director, with offices at 3415 Broadway in Kansas City and 4625 Lindell Blvd. in St. Louis.

Acts like a bank

The commission does not build or renovate housing. It functions like a bank, providing financing directly to borrowers or through a network of private lending institutions. The agency's mission is to provide quality, safe, affordable housing for low- and moderate-income citizens of Missouri.

Early in MHDC's history, proceeds from the sale of its bonds went directly into mortgages. Over the life of the mortgages and bonds, both principal and interest revenue flows from the mortgages to bondholders. These are known as "revenue bonds." The mortgages are FHA insured or VA guaranteed and in the case of default, the underlying insurance or guarantee would provide funds to redeem bonds, resulting in Missouri receiving an AA rating, enabling the agency to pass this rate along to first-time home buyers in the state.

The steady growth and success of the agency combined to raise the state's bonding rating to AAA, which has permitted MHDC to pass along lower interest rates to home buyers.

Housing fund availability is enhanced by the high credit rating, placing affordable units within range of many of the low-income citizens in the state. The MHDC staff has calculated that rents would increase $89 per renter per month without the credit rating.