As part of its mission to increase the number and quality of affordable housing units available to eligible low income families, the HAFC is authorized to issue revenue bonds to make loans to engage or assist in financing the cost of providing permanent financing for developing, acquiring, and renovating low and moderate income housing.
The Authority can also consider acting as a tax-exempt financing vehicle for single and multi-family rental and home ownership housing which the Authority deems to be in the best interest of residents of Fulton County. Developers, lenders, or equity investors wishing the Authority to serve as a tax-exempt financing vehicle for their projects are encouraged to contact the HAFC.
Tax-exempt bonds (private activity bonds) are allocated to all -50 states based on population and are used by private entities to finance industrial development projects, apartment properties and single family properties, etc.
Tax-exempt bonds have a lower interest rate because of their tax- exempt status (the interest the bondholder’s receive is not subject to federal income tax). For example, bondholders might accept a 7% tax-exempt interest rate versus a 10% taxable rate because they have to pay 30% taxes on the 10% taxable interest received.
- Owners have applied with the Housing Authority of Fulton County for tax-exempt bond financing to facilitate a substantial renovation of the properties.
- Owners will sell the bonds to investors and use the money received from these investors to payoff the existing, conventional financing and fund the proposed renovation costs.
- In return for lower costing financing, owners are required to lease 40% of the units to residents making 60% or less of the Atlanta metropolitan area median income (adjusted for household size).
- 2002 median income for the Atlanta metropolitan area is $71,200. 60% of this income is $42,720.
- Lower costing financing results in more cash flow and will allow the owners to spend more on the renovation and reduce pressure to raise rents in the future.
- Principal and interest on the tax-exempt bonds is paid out of cash flow from the properties and not by the taxpayers. Interest ‘ received on tax-exempt bonds is subject to state tax so state coffers are not affected (only federal tax is avoided).
In the last two decades, the Housing Authority of Fulton County has invested nearly $403 million in affordable housing in unincorporated Fulton County.