California completes $230M bond sale to boost veteran homeownership

In a significant move to support veteran homeownership, the California Department of Veterans Affairs completed a $230 million bond sale on Oct. 17, marking one of the year's most impactful veterans' housing initiatives.

Guided by Sheppard Mullin partner Timothy J. Reimers as disclosure counsel, the transaction will enable hundreds of California veterans to access below-market home loans through CalVet's century-old housing program.

"We write the story of the bonds ― what bondholders ought to know when buying these bonds," explained Reimers, who has stewarded these transactions for more than two decades. "For 20-some-odd years, we've been doing these transactions for the department, totaling more than a billion dollars."

The recent issuance of $150 million in Veterans General Obligation Bonds and $80 million in Home Purchase Revenue Bonds marks the continuation of California's commitment to supporting veterans in achieving homeownership -- a mission that began in 1921 with assistance to World War I veterans.

"This will give the CalVet Home Loan Program the ability to issue about 600 new loans, depending on loan size," Reimers said.

In today's challenging housing market, the program offers veterans a competitive rate of 5.125% ― approximately 25-35 basis points better than what similarly situated borrowers might find.

A foreclosure rate below 0.5% is evidence of the success of CalVet's Home Loan Program. "Veterans live up to their commitments," Reimers said. "More importantly, the Department of Veterans Affairs excels at working with borrowers, investing in their success and helping them stay on track."

The program's reach extends throughout California, currently serving approximately 4,400 veteran households. While concentrations are highest in Riverside, Los Angeles, and Sacramento counties, the program's impact is felt across the state. Its unique structure, where CalVet purchases homes and sells them to veterans through contracts of purchase, provides multiple layers of security for both veterans and investors.

Among CalVet's most innovative initiatives is the CalVet Residential Enriched Neighborhoods program, which partners with cities to develop comprehensive veteran communities on donated land.

"It's an innovative way to build affordable housing," Reimers explained. "The Enriched Neighborhood model combines permanent housing with wraparound services in a supportive neighborhood, creating opportunities for financial sustainability and upward mobility."

For Reimers, this latest transaction adds to a legacy of veteran support that spans generations.

"These bonds are paid by veterans' mortgage payments, and the program operates without taxpayer contributions," he noted. "It's an amazing program that delivers real results for our veterans while maintaining solid financial foundations."