State and local governments sell tax-exempt Housing Bonds, commonly known as Mortgage Revenue Bonds (MRBs) and Multifamily Housing Bonds, and use the proceeds to finance low-cost mortgages for lower income first-time homebuyers or the production of apartments at rents affordable to lower income families. MRBs have made first-time homeownership possible for over 2.6 million lower income families, approximately 100,000 every year. Multifamily Housing Bonds have provided financing to produce nearly 1 million apartments affordable to lower income families.
Each state’s annual issuance of Housing Bonds is capped. The 2009 limit is $90 multiplied by the state population, with a state minimum of $273,270,000. MRB mortgages are restricted to first-time home buyers who earn no more than the area median income (AMI). Larger families can earn up to 115 percent of AMI. The price of a home purchased with a MRB mortgage is limited to 90 percent of the average area purchase price.
Multifamily housing bond developments must set aside at least 40 percent of their apartments for families with incomes of 60 percent of AMI or less, or 20 percent for families with incomes of 50 percent of AMI or less.
The Housing and Economic Recovery Act (HERA) of 2008, championed by NCSHA and its allies, provided $11 billion in new Housing Bond Authority to be available through 2010 and made a number of additional changes, including exempting Housing Bond interest from the Alternative Minimum Tax (AMT).
The current economic crisis has significantly diminished investor interest in MRBs and therefore severely limited the amount of funds available to finance affordable home mortgages and multifamily loans. NCSHA is working with the Administration and Congress to support HFA efforts to issue more Housing Bonds and address their variable rate debt liquidity needs. Advocating for support for the Housing Bond program is one of NCSHA’s Legislative Priorities.
Useful Links: Treasury Department, Internal Revenue Service, IRS Information About Tax-Exempt Bonds
Printer-friendly versionNCSHA Blog Posts
- February 8, 2012
On February 7, the Senate Finance Committee approved legislation that would expand the small issuers’ ability to sell bank-qualified bonds from $10 million to $30 million for bonds issued after the date of enactment and before January 1, 2013. The Committee-passed bill is likely to be combined with a larger transportation bill during Senate consideration soon. - February 2, 2012
The Municipal Securities Rulemaking Board (MSRB) recently announced it is seeking qualified applicants to fill seven positions on its Board. Successful applicants will become members of the Board effective October 1, 2012. The application deadline is March 1, 2012.
Housing Headlines
- Bond Buyer
- Bond Buyer
- Wall Street Journal
News
- March 22, 2011
Vermont Housing Finance Agency (VHFA) has passed a major milestone: The Agency has issued more than $3 billion in bonds to finance homeownership and rental opportunities for low- and moderate-income Vermonters. - February 16, 2011
Utah Housing Corporation announced the closing of a $74 million bond sale completing the commitment of bond purchases to the US Department of Treasury under a special program under the 2008 Housing and Economic recovery Act (HERA).
Events
- July 27, 2009
The Institute's four program-specific conferences will strengthen your understanding of program fundamentals and explore advanced techniques for administering the Low Income Housing Tax Credit; the HOME Investment Partnerships program; Mortgage Revenue Bonds, Federal Housing Administration and rural housing mortgage insurance; and HUD's Performance-Based Section 8 Contract Administration initiative.
Housing Bonds - Resources
- January 23, 2012
- January 6, 2012Current Refundings of Tax-exempt Bonds in Certain Disaster Relief Bond Programs
