Accentuate The Positive

Retooling Affordable Housing Strategies Part 8 of 19

Private Activity Bonds in Lubbock

Lubbock Housing Finance Corp. (LHFC) administers PAB housing programs in Lubbock. The corporation has not issued single-family bonds in recent years Penny Stock Secrets because there was a significant gap between the interest paid on the outstanding bonds and the interest that would have been earned by investing the bonds proceeds. Negative arbitrage has been the largest barrier over the years, according to LHFC Executive Director Shari Flynn.

With improving economic circumstances and higher interest rates, bond issuance is now more attractive and competitive. In 2007, the LHFC plans to partner with South Plains Housing Finance Corp. to issue a combined $37 million in single-family mortgage revenue bonds that will service Lubbock and 14 counties outside the city. Single-family bonds will be used to finance below-market-interest-rate mortgage loans through a network of local lenders. Families and individuals who are purchasing their first home or who have not owned a home in the past three years will be eligible.

In 2006, the LHFC also issued a $10 million multifamily bond for a complex in north Lubbock called Hillcrest Manor Senior Community. The 220-unit housing facility, still under construction, is subsidized by an additional $624,800 in 4 percent tax credits from Trading Patterns the Texas Department of Housing and Community Affairs (TDHCA). The 4 percent housing tax credit typically accompanies such bonds and is used to further subsidize the project and help provide below-market rents for income-eligible residents.

Financing

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