The Utah Housing Corporation sold $206.4 million in bonds to finance affordable housing initiatives.
The corporation issued the bonds in two series. The tax-exempt 2024 Series E bonds, consisting of $91.8 million, mature between 2025 and 2054 and pay interest at rates between 3.35% and 6%. The federally taxable 2024 Series F bonds, consisting of $114.6 million, also mature between 2025 and 2054. They bear interest at rates between 4.789% and 6.25%. The securities received a rating of Aa2 from Moody’s Investors Service.
The bond proceeds will fund the corporation’s single family mortgage program, which finances mortgage loans to low- and moderate-income Utahns.
“While we expect continued leveraging to drive down the program asset to debt ratio between 1.0x and 1.10x, the program will remain financially sound,” Moody’s analysts wrote.
A growing number of Utah residents place housing in the upper echelon of local policy issues. Housing costs have risen rapidly as Utah’s population has soared in recent years, with demand far outstripping supply. That’s left many Utahns paying far more as a percentage of their income on housing. A recent survey by the conservative Salt Lake City think tank Sutherland Institute found that housing affordability is the top issue for likely voters this election cycle.
The Utah legislature created the Utah Housing Corporation in 1975 to raise money for state affordable housing initiatives. It supports multifamily and first-time homebuyer programs in addition to its single family program.
The bonds are special, limited obligations of the corporation, secured by mortgage revenue.
Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for $209.9 million. The price reflected a premium of more than $3 million.