Rhode Island housing agency to sell $135 million of revenue bonds

The Rhode Island Housing and Mortgage Finance Corp. plans to price $135 million of special revenue bonds Wednesday to support its affordable mortgage program for first-time and lower income home buyers.

The issuer, also known as RIHousing, is the state’s housing finance agency.

The largest of the three tranches of Homeownership Opportunity Bonds is the $75 million Series 79-A, which are tax-exempt and carry a social bonds designation that is not verified by an outside party.

The remaining two series are taxable, and the $40.1 million Series 79-T-2 will carry a variable interest rate.

RBC Capital is the sole underwater on the variable rate bonds while a group that includes; JPMorgan and Morgan Stanley are also lead underwriters for the 10-member syndicate.

The loans will be pooled into program securities guaranteed by the Government National Mortgage Association, according to Moody’s Investors Service, which affirmed its Aa1 rating on the agency’s outstanding Homeownership Opportunity Bonds and assigned the rating to the new fixed rates bonds.

S&P Global Ratings most recently affirmed the program’s bonds at AA-minus in October.

RIHousing offers several programs that provide loans to cover down payments and closing costs for first-time homeowners from different income brackets.

Rhode Island Gov. Dan McKee announced an expansion of such efforts at the end of January, backed by a $260 million mix of state and federal funds, that made available up to $17,500 in loan assistance to qualified residents seeking to purchase a new home.

“Homeownership is one of the most important ways to build generational wealth yet Rhode Island has one of the lowest homeownership rates in the country, largely because families and individuals cannot afford the down payment,” he said. “This down payment assistance program is an important boost for families looking to make their home in Rhode Island.”

RIH’s most recent annual report identified increasing housing opportunities for low-to-moderate income households as a top priority.

It also pointed to a lack of housing across the state as a major impediment to that goal and said they supported proposals going forward that show “increased attention to the state’s housing shortage given the current lack of supply.”

It self-declares the Series 79-A bonds as social bonds saying they meet International Capital Markets Association social bond principles. The agency in its preliminary official statement said it expects to — but isn’t required to — provide annual reports on the use of proceeds for social purposes.