Multifamily Rental Housing: Financing With Tax-Exempt Bonds

Multifamily rental housing projects provide affordable housing for low- and moderate income families throughout the country; many of these projects are financed in whole or in part with tax-exempt bonds.

Governments of all levels (federal, state and local) are involved in providing housing for those who cannot otherwise afford it at market rates. In the past, subsidized housing was often built directly by the public sector. Now, governments prefer to accomplish their housing policy goals by providing tax credits and other assistance (such as eligibility to use tax-exempt bonds) to private developers of housing projects that are consistent with those goals. Developers have become sophisticated in using these government incentive programs to generate the equity and/or debt they need to finance their projects.

This pamphlet is designed to introduce or broaden the understanding of developers, state and local agencies, and others regarding the role of tax- exempt bonds in the financing of multifamily rental housing projects.

Orrick is the nation’s premier tax-exempt bond counsel firm, with extensive experience in all types of housing financings, ranking number one (in terms of dollar volume of bonds issued) over the past decade. It has been bond counsel, underwriter’s counsel or other counsel on more than 500 financings and refinancings of multifamily housing projects in the past decade, including some of the largest and some of the smallest multifamily housing financings ever completed.