Massachusetts has $1.07 billion of private-activity borrowing capacity in 2010, with the state rolling over $482 million of unused PAB volume from 2009.
On top of its $593 million 2010 allocation from the Internal Revenue Service, the state has $407.3 million of PAB capacity left over from 2009 and $75 million of unused affordable housing PABs that it received through the federal Housing and Economic Recovery Act of 2008.
Last year, the commonwealth had $918 million of PAB capacity, including $130 million of unused borrowing from 2008 and a $201 million allocation of HERA affordable housing debt. Each year, the IRS assigns PAB volume to each state, based on population.
Private-activity bonds help finance single- and multifamily housing developments, higher-education student loans, and capital projects that promote economic development.
“This funding allows us and our partners to make critical investments in education, housing, and economic development,” Gov. Deval Patrick said in a statement. “At a time when state government has had to scale back key priorities as a result of the global economic crisis, this alternative funding tool is even more important to helping us maintain our competitive edge, create new jobs, and provide quality, affordable education to our students.”
Of the three independent state agencies in Massachusetts that can issue PABs, the Massachusetts Housing Finance Agency will receive $560 million of capacity this year, the Massachusetts Educational Financing Authority will gain $275 million, and the Massachusetts Development Finance Agency will receive $200 million. The state has another $40 million for public housing projects.
Like last year, Massachusetts designated the bulk of its private-activity borrowing for the housing sector, with $420 million going towards multifamily developments and public housing and another $280 million to help finance low-interest loans for first-time buyers of single-family homes.
MassHousing’s $560 million allocation — up from $342 million received in 2009 — includes $280 million for multifamily affordable housing developments and another $280 million to finance low-interest single-family home loans.
MEFA’s $275 million PAB capacity for 2010 is in line with its $270 million allocation from last year. The agency supplies students with low-interest student loans for higher education.
Officials evenly split MassDevelopment’s $200 million allocation between multifamily housing developments and economic development projects. The agency received $306.5 million of PAB capacity in 2009.