The Indiana Housing and Community Development Authority (IHCDA) sold $134.6 million in bonds to finance affordable housing initiatives in the state.
The authority issued the bonds in three series. The tax-exempt 2023 Series D-1 bonds, consisting of $65.9 million, mature between 2028 and 2053, yielding between 4.15% and 5.2%. The 2023 Series D-2 bonds, consisting of $4.1 million and subject to the alternative minimum tax, mature between 2024 and 2027, yielding between 4.3% and 4.5%. The federally taxable 2023 Series D-3 bonds, mature between 2027 and 2054, yielding between 5.546% and 6.5%. The securities received a rating of Aaa from Moody’s Investors Service and AA+ from Fitch Ratings.
The rating incorporates the authority’s “sound legal structure, cash flow projections that exhibit sufficient revenues to pay timely debt service under various stressful scenarios and satisfactory management,” Moody’s analysts wrote.
The issuance comes amid a shortage of available and affordable housing in Indiana. Meanwhile, rents have risen faster than wages. According to a June report by Prosperity Indiana and the National Low Income Housing Coalition, the necessary wage to afford a fair market two-bedroom apartment in the state rose 12% last year, while the state’s average renter wage rose just 7.5%.
IHCDA finances affordable housing primarily for low-income homebuyers, though it operates some programs for renters. The bonds are special obligations of the authority, secured by its portfolio of mortgage-backed securities.
J.P. Morgan Securities LLC served as lead underwriter on the issuance.