The liberal think tank the Center for American Progress has proposed a plan to promote a new source of financing for troubled state housing finance agencies — the House America Bond.

A HAB would be a taxable, direct-pay bond, modeled after the Build America Bond program, which was created as part of the American Recovery and Reinvestment Act of 2009. BAB issuers receive a subsidy payment from the Treasury Department equal to 35% of their interest cost. BABs could only be issued by state and local governments, not state housing agencies, which typically issue private-activity bonds.

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