he need for affordable housing in California continues to be a pressing concern. For many people, a residence within reasonable commuting distance of work is still a financial impossibility.

In an effort to deal with the increasing shortage of affordable housing, the ABAG Finance Authority has established an affordable housing program to provide low-cost financing for smaller urban projects and an efficient, competitive lending vehicle for larger developments. This program provides tax-exempt bond financing for the acquisition, construction and rehabilitation of multifamily and senior housing.

Borrowers include both nonprofit entities such as California 501c(3) housing developers, as well as for profit entities such as tax credit partnerships. All projects must have demonstrable public benefit. This program offers assistance in overcoming the many obstacles to completing projects that serve the working class and other less fortunate families in our communities.

The Authority has to date successfully completed seventy-six affordable housing project financings that have helped to either create or preserve more than 10,330 units. In the process, the Authority has issued more than $1.077 billion in tax-exempt multi-family revenue bonds. The flexibility of working with the Authority and its low-cost structure allows borrowers efficient and economical access to the tax-exempt bond market.

Under Authority's Guidelines, its publicly offered financings must either be credit enhanced or carry a stand-alone, investment grade rating. Financings with neither credit enhancement nor rating are permitted but only on a strictly private placement basis to qualified lenders.

All multifamily financing projects issued through the Authority must carry the sponsorship of an Authority Member. The bylaws of the Authority allow that public agencies throughout the State are eligible for membership in the Authority, subject to the approval of the Board. From its inception in 1990, the Authority has maintained members from both in and outside the Bay Area. JPA membership is required primarily to gain local acknowledgement of the project financing; a high degree of participation by the local jurisdiction is not necessary.

The Authority generally leaves the selection of professional financing team members to the borrower, subject to final Board approval.