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Tax-exempt Bond Financing

VHDA’s Tax-exempt Bond financing provides an uninsured loan that facilitates the construction or acquisition, with substantial rehabilitation, of affordable multifamily rental housing. This financing is available to private, for-profit and non-profit developers.

Financing Details

Due to the tax-exempt status, this financing is federally regulated. As a result, the developers must make a choice to rent units to a minimum of either 20% of renters at 50% of the area median income, or 40% of renters at 60% of the area median income. The remainder must be no more than 150% of the area median income. This financing also allows mortgagors the opportunity to apply for the 4%, non-competitive federal Low-Income Housing Tax Credits.

Additional Criteria

  • The lesser of 90% loan-to-value or 95% of total approved development costs or 100% loan-to-value or 100% of total development costs for not-for-profit developers (excluding developer’s fees).
  • Minimum 1.10 debt coverage ratio.
  • Loans are construction with permanent conversion.
  • 2% financing fee.
  • Maximum 35-year loan term for new construction; 25-year term for rehabilitation.
  • Greater of ½% of loan amount or $5,000 non-refundable application fee (applied to financing fee).
  • Loans are generally non-recourse.
  • Minimum $7,500 per unit rehabilitation or 15% of the acquisition cost, whichever is greater.
  • The application must be submitted through a VHDA-approved mortgage broker.

Rates are updated daily on and are locked upon return and acceptance of commitment and all fees.

VHDA is a frequent issuer of bonds. As such, our rates include bond counsel fees, rating agency fees and bond underwriting fees, and require no bond insurance or additional credit enhancements.