AHFA issues multifamily housing revenue bonds (bonds) on a project-specific basis for the acquisition, renovation, and new construction of affordable rental housing.
Bonds provide low-cost debt financing to developers using proceeds from the sale of tax-exempt bonds in exchange for developers reserving a portion of their units for tenants earning less than the area’s median income.
Because most of these bonds are tax-exempt, developers reduce their interest expense, which allows them to set lower rents. Taxable bonds may be issued as well to offer additional funds for the production of affordable rental housing.
In order to ensure programs benefit the greatest number of Alabamians possible, bonds are often combined with housing credits. This method funds affordable rental housing by encouraging the leveraging of additional loan, grant, and philanthropic sources.
The initial step for any applicant seeking tax-exempt bond volume cap allocation from AHFA is to submit a written application for a declaration of official intent. The application will not be deemed submitted until it is complete. A non-refundable application fee of $5,000 in the form of a check made payable to AHFA must be submitted with the completed application.
If AHFA determines that the application is complete and otherwise satisfactory, AHFA will execute and deliver a written declaration of official intent with respect to the proposed project and bond issue no sooner than 30 days after the date on which the application is deemed complete.
Download the Application Checklist