The Nebraska Investment Finance Authority sold $110 million in bonds to finance affordable housing in the state.
The authority sold the bonds in two series. The tax-exempt 2023 Series E bonds mature between 2024 and 2053, yielding between 3.4% and 4.8%. The taxable 2023 Series F bonds mature between 2024 and 2052, yielding between 5.209% and 5.883%. The securities received a rating of AAA from S&P Global Ratings.
“The ratings reflect our view of the program’s legal framework, program management and operational risk assessment, overcollateralization and cash flows, sufficient liquidity, and market position characteristics,” S&P Credit Analyst Daniel Pulter said.
The authority will use the bond proceeds to buy government-backed mortgages, a step which allows the state to finance more affordable housing. Last year, the authority issued more than $300 million in bonds to fund loans for low- and moderate-income homebuyers, contributing to the development of 898 affordable housing units.
Nonprofits say Nebraska has an urgent need for more affordable housing. The state has a shortage of 40,000 affordable and available rental homes for extremely low-income homebuyers, according to the National Low Income Housing Coalition, a nonprofit which advocates for affordable housing. The coalition estimates that 26% of Nebraska renters are extremely low income, defined as those making less than $26,500 for a family of four.
The bonds are limited obligations of the authority, payable by revenue from the loans.
J.P. Morgan Securities LLC served as lead underwriter on the issuance, purchasing the bonds for par.