Department of Finance
Reference: Assignment of the City of Brighton's 2022 Private Activity Bond Allocation
To: Mayor Gregory Mills and Members of City Council
Through: Michael Martinez, City Manager
Prepared By: Catrina Asher, Director of Finance
Date Prepared: April 5, 2022
PURPOSE
To assign Brighton's 2022 Private Activity Bond allocation to the Colorado Housing and Finance Authority (CHFA) with a request to prioritize those bonds for use by the Brighton Housing Authority in support of the Hughes Station Project.
STRATEGIC FOCUS AREA
Financially Responsible
Strong Regional Relationships and Partnerships
BACKGROUND
Each year, cities throughout the State of Colorado receive an allocation of Private Activity Bonds which are tax-exempt bonds offering low-cost financing for private projects that serve a public purpose. Examples of eligible projects include acquisition, construction or rehabilitation of housing for low- and moderate-income individuals and families, mortgage loans or mortgage credit certificates for income-qualified, first-time home buyers. While Private Activity Bonds can fund projects other than housing, they are primarily directed towards housing projects because there are other financing options that are better suited for non-housing projects.
The City of Brighton has a 2022 allocation of $2,227,841 in Private Activity Bonds.
In order to utilize the bonds, a government authority would partner with a private organization to finance a project. Private Activity Bonds are issued by a government authority and then investors purchase the bonds. The underwriters use the investors' money or bond proceeds to create a low-interest loan for the project. The project manager pays back the loan and the investors get repaid with interest. The Colorado Housing and Finance Authority (CHFA) is the primary agency that issues bonds for housing projects in Colorado.
In 2021, the Brighton Housing Authority (BHA) notified the City that BHA would like to use Br...
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