Housing
Bond Programs
Description:
Bond financing provides long term, low-cost capital to experienced commercial and not-for-profit developers for the acquisition, renovation, rehabilitation, or construction of rental housing.
Features & Benefits:
| Features |
Benefits |
| Up to 100% financing with consent of borrower’s lender or bond purchaser, as applicable. |
Facilitates sub-prime interest rate. |
| Borrower can often elect either a variable or fixed interest rate. |
Can qualify borrower for 4% Low Income Housing Tax Credits. |
Types of Financing:
1) 501(c)(3) Bonds: Tax-exempt bonds for not-for-profit developers to create and preserve rental housing for low and moderate income households.
The borrower must be incorporated as a 501(c)(3) corporation under provisions of the Internal Revenue Code.
2. Multifamily Housing Revenue Bonds: Tax-exempt bonds owned by for-profit developers for the acquisition, rehabilitation and construction of apartment buildings. Development must comply with applicable unit set-aside restrictions for projects that use tax-exempt bond financing. Additionally, projects that use 4% Low Income Housing Tax Credits must comply with applicable rental rate and tenant income restrictions on the property. Developer is responsible for obtaining Volume Cap from Home Rule municipalities, as needed. IFA does not provide Volume Cap for multifamily housing projects.
3. Refunding Bonds: A refinancing of existing tax-exempt housing bonds to reduce debt service payments and free cash flow for the operation and maintenance of the property. A refunding issue may allow borrowers to extend the maturity of the bonds and amend restrictive covenants under an existing bond issue. Refunding may also enable conversion from a variable rate of interest to a fixed interest rate, thereby eliminating interest rate risk to the borrower.
Contact:
Chicago office: 312.651.1300
Springfield office: 217.782.5792
Peoria office: 309.495.5959
Mt. Vernon office: 618.244.2424
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