The Virginia Housing Development Authority sold $240 million in bonds to finance affordable housing initiatives.
The authority issued the bonds in two series. The tax-exempt 2023 Series E-2 bonds, consisting of $80 million, mature between 2025 and 2054, paying interest at rates between 3.3% and 4.6%. The taxable 2024 Series B bonds, consisting of $160 million, also mature between 2025 and 2054, and bear interest at rates between 4.757% and 5.95%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The authority will use the issuance proceeds to support its single-family program, which seeks to facilitate access to affordable mortgages for low- and moderate-income Virginians seeking single-family homes.
Moody’s analysts wrote that their rating reflects the program’s “very strong financial position,” citing its 2.97x asset to debt ratio. They added that the rating incorporates the authority’s “active management” and “solid portfolio composition.”
The issuance comes amid a housing shortage in Virginia that some state officials have called a “crisis.” Causes for the shortage are subject to debate. Many analysts blame supply chain challenges and not enough construction; one recent report by the Pew Charitable Trusts found that overly restrictive zoning laws have hurt housing affordability.
The bonds are general obligations of the Virginia Housing Development Authority, backed by its full faith and credit. The authority recorded $379.9 million in operating revenue last fiscal year.
Wells Fargo Bank, NA, served as lead underwriter on the issuance. CSG Advisors Inc acted as municipal advisor.