The Illinois Housing Development Authority (IHDA) issued $275 million in bonds to finance mortgage loans for low-income residents of the state.
The authority sold the bonds in three series. The Series H bonds consist of $160 million divided between serial bonds and four term bonds. The serial bonds mature between 2025 and 2035, yielding between 3.25% and 4.125%. The Series I bonds consist of $76 million, and the Series J bonds, which were sold at a variable rate, consist of $38 million. The Series H and Series I securities received a rating of Aaa from Moody’s Investors Service. The Series J bonds received a rating of Aaa/VMIG 1.
“The Aaa ratings are based on the high-quality collateral comprised mainly of Ginnie Mae and Fannie Mae mortgage-backed securities (MBS), a sound legal structure, cash flow projections that demonstrate sufficient revenues to pay debt service timely, and a good track record of IHDA’s program management and oversight,” according to Moody’s.
The issuance comes amid a national and statewide shortage of affordable rental homes. The authority will use the bonds to finance affordable single-family housing in Illinois, especially for first-time homebuyers. There are just 34 affordable and available rental homes for every 100 low-income Illinois households, according to a March report by the National Low Income Housing Coalition, a nonprofit that advocates for affordable housing.
The bonds are special limited obligations of IHDA, backed by the authority’s revenue.
Raymond James & Associates, Inc served as lead underwriter on the Series H and Series I bonds, and Loop Capital Markets LLC served as lead underwriter on the Series J bonds.