The Michigan State Housing Development Authority issued almost $315 million in bonds to finance loans for prospective homeowners.
The bonds mature between 2023 and 2053, with yields ranging from 2.85% to 4.95%. They received a rating of AA+ from S&P Global Ratings and Aa2 from Moody’s Investors Service.
“The offered bonds will be issued for the purposes of financing new single-family mortgage loans and down payment assistance loans,” according to the official statement accompanying the sale of the bonds.
The proceeds of the sale will support affordable housing in the state, which saw housing costs rise 10 percent last year. Almost half of Michigan renters are considered “overburdened” by the cost of rent, according to the Authority. The Authority launched a plan with the state’s government last year to establish 75,000 new or refurbished homes by 2027.
The bonds are general obligations of the Authority, but will not be backed by the state of Michigan. Instead, the bonds will be backed by the $1.87 billion in pledged mortgage loans under the General Resolution, a 1987 agreement that allows the Authority to issue bonds to finance mortgages for single-family homes. The most recent bond sale marked the 96th such issuance under the Resolution.
Barclays Capital Inc. served as lead underwriter for the bond issuance.