IHDA Bond Programs

Buena Vista Tower Apartments (Elgin)

Buena Vista Tower Apartments (Elgin)

IHDA is an issuer of taxable and tax-exempt bonds. IHDA uses bond proceeds to finance the creation and preservation of apartments affordable to lower-income families in Illinois.

As a conduit issuer, IHDA issues short-term and long-term taxable and tax-exempt bonds and loans from a portion of the State’s annual volume cap amount. The developer seeks out a private placement or public offering of those bonds to a bank or investor.

IHDA can act as bond issuer and lender, and provide credit enhancement through its HUD Risk Share Program. IHDA will underwrite the loan to the Risk Share standards and obtain an FHA-insured loan. The developer is able to work with IHDA directly for the bond issuance, bond loan and as-of-right 4% LIHTC award. IHDA will also sell the bonds in the marketplace to obtain the bond rate.

IHDA’s Qualified Allocation Plan (QAP) is the agency’s plan for the allocation of housing tax credits and applies to bond-financed projects. All projects must submit a Preliminary Project Assessment 90 days prior to full application submission. Authority rules governing the bond programs are found in the Illinois Administrative Code, Title 47, Chapter II, Part 365.

IHDA can act as a conduit bond lender by issuing tax-exempt bonds from its annual volume cap amount. The developer seeks out a private placement of those bonds to a bank or investor. IHDA acts as a development partner, while deferring the majority of the underwriting to the lender. More information about the program can be found in the Conduit Bond Program manual.

The Authority reserves the right to limit the number of conduit bond deals.

Conduit Bond Program Guidelines

IHDA structures a short-term and/or long-term conduit bond or loan (for tax-exempt transactions).  For either a taxable 9% deal or a 4% tax-exempt bond deal, IHDA will enter into a Bond Purchase Agreement (BPA) to issue bonds at closing or to issue refunding bonds at project stabilization with an institution selected by the borrower.  This institution will normally be the same firm providing the construction financing.

Direct Purchase Bond Program Guidelines

IHDA can act as bond issuer and lender and provide credit enhancement through its HUD Risk Share Program. IHDA will underwrite the loan to the Risk Share standards and obtain an FHA-insured loan. The developer is able to work with IHDA directly for the bond issuance, bond loan and automatic 4% LIHTC award. IHDA will also sell the bonds in the marketplace to obtain the bond rate.

Portfolio Bond Program Guidelines

The first step in applying for a Conduit Bond or the IHDA Risk Share Bond Program is to submit a Preliminary Project Assessment (PPA). The PPA addresses project concept, design, location and proposed tenant population. PPAs are either approved or denied by IHDA and are accepted on a rolling basis. Approval of a PPA does not guarantee an allocation of IHDA resources.

For more information on Bond Programs, contact Andy DeCoux, Director, Multifamily Financing at 312-836-5355 or adecoux@ihda.org.