The Illinois Housing Development Authority (IHDA) issued $275 million in bonds to finance affordable housing initiatives in the state.
The authority sold the bonds in three series. The tax-exempt 2023 Series K bonds consist of $179 million and mature between 2025 and 2053; the taxable 2023 Series L bonds consist of $64 million and mature between 2025 and 2048; and the taxable 2023 Series M bonds consist of $32 million in variable rate term bonds and mature on October 1, 2053. The securities received a rating of Aaa from Moody’s Investors Service.
“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 bond proceeds will fund the authority’s purchase of MBS to finance affordable single-family residences. Those purchases allow IHDA to originate mortgage loans, which can facilitate the homeownership process. The authority originated almost $1 billion in mortgage loans for first-time homebuyers last fiscal year, according to the official statement accompanying the sale of the bonds.
Still, Illinois is in the grips of a housing shortage that has left just 34 out of 100 rental homes affordable and available for extremely low-income renter households, according to Housing Action Illinois, a nonprofit that advocates for affordable housing.
“IHDA understands that investing in homes and communities across the state is an effective way to combat the ongoing effects of the housing crisis and assist with revitalization efforts,” the authority’s website says.
The IHDA is a quasi-independent state agency that provides housing assistance to low- and moderate-income residents of Illinois. The bonds are special limited obligations of the authority, payable by revenue from mortgage loans and MBS.
Wells Fargo Bank, NA, and Ramirez & Co, Inc served as lead underwriters on the issuance.