Multi-Family Housing Bonds

Description

The Upper Illinois River Valley Development Authority (UIRVDA) acts as the issuer of the Multi-Family Housing bonds, passing along its DOUBLE TAX-EXEMPT status to a Developer, private for-profit or not-for-profit to finance low-income or senior housing projects. This can include the acquisition of fixed assets including land, buildings, equipment. Because the interest on the bonds is not subject to state or federal income taxes, investors and lenders require a lower interest rate to achieve an equivalent after-tax return. Therefore, the borrower receives a preferential interest rate, generating substantial savings.

Eligibility

The Developer must agree to set aside a portion of a financed project’s units for tenants at a certain income level.

A minimum of 20% of the units must be set aside for individuals earning no more than 50% of the area median income or the Developer can option to set aside 40% of the units for individuals earning 60% of the area median.

Funds can be used to build a facility, acquire necessary land and new equipment.
Funds can be used to acquire an existing facility as long as 15% or more is used to rehab the structure.
Housing bonds can assist in obtaining Low Income Housing Tax Credits (LIHTC) that can reduce the required equity. Please contact a UIRVDA professional prior to IHDA to learn more.
Funds expended prior to sixty days before receiving initial approval from UIRVDA may not be eligible.
The capital improvements must take place in the territory of UIRVDA in the counties of Bureau, Grundy, Kane, Kendall, Lake, LaSalle, Marshall, McHenry and Putnam.

Benefits

Smooth Process

UIRVDA has been described as a “Nimble Issuer” because of its flexible guidelines and an expedited approval process. We can assemble a team of Bond specialists who have a thorough understanding of all the legal and financial aspects of this type of transaction. We'll work closely with the borrower every step of the way, answering questions, helping avoid pitfalls, and making sure the borrower gets the financing that's right for them.

Finance For Projects

Finance up to 100% of the project cost – contingent upon meeting credit standards of a local bank backing the bond.

Lower Interest Rate

An UIRVDA Housing Bond is exempt from state and federal income taxes, making it an attractive investment for the bondholder. The interest rate available on these bonds is far lower than conventional financing, and a borrower can expect the interest savings to range from 150 – 300 basis points lower than a conventional loan.

Application

Interested Developers should complete a one-page application and submit a non-refundable application fee. There is an issuance fee paid at closing along with other professional costs. The cost of issuing a Bond is generally more expensive than a conventional loan, but the total costs are usually recovered in the first year of interest savings and will continue through the life of the bond.