WASHINGTON - State and local housing finance agencies were ready to jump into the municipal bond market five months ago after Congress and President Bush gave them $11 billion of additional housing bond capacity and removed all housing bonds from the alternative minimum tax. But their efforts have been stymied by the deepening credit crunch, which has dampened investor demand for long-term tax-exempt housing bonds and pushed interest rates higher on their variable-rate, as well as their long-term, debt.

As a result, the HFAs are seeking relief from the federal government to bring the pent-up volume of housing bonds to market so that they will not have to curtail lending to low- and moderate-income homebuyers, market participants said in interviews about the new year.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.