The Connecticut Housing Finance Authority issued more than $400 million of bonds in 2015 to finance mortgages at below-market interest rates for low to moderate-income first-time homebuyers, according to authority officials.
Backed by strong retail demand, CHFA held a $30.1 million tax-exempt sale combined with a $30.2 million direct placement with Bank of America Merrill Lynch. "Due to heavy demand from retail investors and a rally in the treasury market, we were able to sell the bonds at a much lower interest rate. On CHFA's 10-year bond alone, we saved about 0.16%," Hazim Taib, CHFA's vice president for finance, said of the Dec. 1 pricing.
Proceeds will help finance six affordable multifamily rental developments: Billings Forge in Hartford; Charles Street Apartments in Meriden; Frost Homestead in Waterbury; Laurelwood Apartments in Bridgeport; Old Talcott Mill in Vernon; and Trinity Park in Stamford. These developments will add 488 units to the state's inventory of affordable rental housing.
The lead underwriter was JPMorgan. Lamont Financial Services Corp. is CHFA's financial advisor.
Since 2011, more than 7,000 units of affordable multifamily rental housing have been built or rehabbed, with another 3,000 units under construction and 6,800 more approved for financing.
As of Dec. 17, CHFA was offering interest rates as low as 3.125%. In comparison and according to Freddie Mac, the average conventional rate was 3.95%.
Hawkins, Delafield & Wood LLP, Kutak Rock LLP and Lewis & Munday PC were co-bond counsel. Tobin, Carberry, O'Malley, Riley & Selinger PC represented the underwriters.
Standard & Poor's and Moody's Investors Service rate the authority AAA and Aaa, respectively.