Nevada Rural Housing Authority to Utilize Private Activity Bond Cap

Submitted courtesy Nevada Rural Housing Authority --  Local elected officials from both Churchill County and the City of Fallon recently transferred their unused Private Activity Bond Cap (PABC) amounts to Nevada Rural Housing Authority. The mission of NRHA is to promote, provide and finance affordable housing opportunities for all rural Nevadans. Each year, the City of Fallon and Churchill County have transferred their unused PABC, resulting in the continued success of the award-winning, single-family housing program, Home At Last™, and helping to fulfill NRHA’s mission. PABC, also referred to as “bond cap,” is the opportunity to issue tax-exempt debt for certain purposes such as those relating to affordable housing. For developers, interest received by bondholders is tax exempt, which means they are incentivized to offer a lower interest rate on the debt. The bonds then become more attractive when financing a larger housing project or industrial development. The bonds are based on federal taxation, which means they are issued and overseen by the U.S. Treasury. Nevada receives approximately $300 million in private activity bond cap each year. Nevada is one of the few states that retains half of its private activity bond cap and distributes the other half to local government entities based on population. For the more rural areas that receive a respectively smaller amount (compared to more populated areas such as Clark County, which receives over $50 million), it generally proves to be challenging to utilize the bond cap amounts. In 2019, Churchill County received $859,836.30 and the City of Fallon received $475,429.09. A housing development project, as an example, can take upwards of $10 million to complete, and while a smaller amount of bond cap could serve as one of many pieces of financing for a project, it generally can’t fund a project on its own. In order to put a small amount of bond cap to good use for the rural parts of Nevada, NRHA developed a “pooling” method through which the Authority requests any unused bond cap from rural counties and cities be transferred to NRHA. It’s important to note that NRHA only requests bond cap that isn’t designated to a project. Additionally, the transfer of PABC does not obligate the local government entities in any way and is not actual budget dollars on the county or city’s books. Once pooled, the PABC gives NRHA the financing tools it needs to successfully offer its homeownership programs – such as the Mortgage Credit Certificate (the “MCC”) – which, in turn, support communities through single-family home financing and tax credits to homeowners that are reinvested in your local economy. What does that mean? It means 230 families in Churchill County have achieved their dream of affordable homeownership. It means $528,000 in homeowner tax savings have been invested back into our community. It means $1.3 million has been provided in down payment assistance to homebuyers in the area. The Home At Last™ homeownership program provides pathways to rural Nevadans. From comprehensive homebuyer education to the Trio lease-to-own program launched this year, NRHA knows homeownership isn’t only about getting approved and moving in. It’s about building long-term success. It’s about putting down roots and becoming engrained in a community. And it’s what makes rural Nevada a great place to live and thrive. About the Nevada Rural Housing Authority (NRHA) Nevada Rural Housing Authority’s mission is to promote, provide and finance affordable housing opportunities for all rural Nevadans. NRHA does this through homeownership programs, rental services, community development initiatives and an exclusive Weatherization program. The Authority serves Nevada’s 15 rural counties and the rural portions of Clark and Washoe Counties – a coverage area of 110,000 square miles and home to more than 1.3 million Nevadans. For more information, visit www.nvrural.org.     Never miss the local news -- read more on The Fallon Post home page. If you enjoy The Fallon Post, please support our effort to provide local, independent news and make a contribution today.  Your contribution makes possible this online news source for all things Fallon.