Revenue bonds approved for housing initiatives
CHFA has utilized more than $34 million in bonds for local housing in the past 8 years
July 23 2021
Garfield County has approved the allocation of revenue bonds toward residential rental projects and single-family mortgage loans for low- and moderate-income families in the area. The Colorado Housing and Finance Authority (CHFA) is seeking to utilize more than $3.3 million in private activity bonds toward affordable housing initiatives in Garfield County.
In the past, the county has issued the bonds to CHFA for affordable housing projects in the area. Over the past eight years, CHFA has used the bonds to help support 123 first-time home buyers in Garfield County, totaling $24.8 million investment in the community. It also helped lock in an additional $9.2 million investment in the 76-unit Glenwood Manor phases one and two.
Shannon Friel, CHFA tax credit officer, laid out several bond options to the Board of County Commissioners, including that the bond allocation can be put in a reserve and carried forward into next year. She added that if no action is taken, the resource will automatically be relinquished to the state on Sept. 15 and redeployed to other areas. Friel said that if the bond allocation is transferred to CHFA, it makes “a commensurate investment in your community over the next 12 months.”
“We’re seeking a transfer of the county’s 2021 private activity volume cap in the amount of more than $3.3 million,” she told the board. “The county has the options of what it can do with its private activity bond volume cap, which is based on population.”
According to the Colorado Department of Local Affairs (DOLA), the tax-exempt bonds are used to help fund private development projects. Counties and municipalities may issue the bonds with no obligation to repay investors. The amount of the bonds is limited by the Internal Revenue Service (IRS), and underwriters utilize investor funding to issue a loan for a qualifying project, which then repays the loan to investors, plus interest.
Friel added that qualified veterans do not have to be first-time homebuyers to utilize the program for housing.
“There’s strong interest in our program by the lenders, because it helps them with loan production,” she said. “We work with the lenders, who send us qualifying mortgage packages, and we review them and provide the investment.”
The allocation of the bonds to CHFA was approved unanimously, 3-0.
“Thank you. Let’s put this to good use,” added Commissioner John Martin.