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Financing With Tax-Exempt Bonds

Image by Barry Harley Photography, courtesy of APAH


Tax-exempt bond financing is available for the development, acquisition and rehabilitation of affordable housing with 4% Housing Credits. If you are interested in this type of financing, please note it is federally regulated and has income limits and rent requirements.

Developers must choose to rent either 20% of the units to households with income less than or equal to 50% of the area median income, or 40% of units to households with income less than or equal to 60% of the area median income. The remainder of the units may be rented to households with income up to 150% of the area median income.

Virginia Housing is a frequent issuer of bonds. As such, our rates include bond counsel fees, rating agency fees and bond underwriting fees, and require no bond insurance or additional credit enhancements.


Multifamily Interest Rates and Fees
Rates are updated daily on our website. Rates are locked upon return of commitment and all fees.


Coming in 2022, the Residences at North Hill will transform 33 acres of undeveloped land in Alexandria into a vibrant, walkable community.

Coming in 2022, Market Heights provides new housing for households with incomes at or below 40% to 60% AMI.

Tax-Exempt Financing Details

  • Financing With Tax-exempt Bonds

    This fully amortizing, non-recourse construction-to-permanent loan offers a lower interest rate and is used in conjunction with 4% Housing Credits. Tax-exempt bond financing is available for private, for-profit, nonprofit or not-for-profit developers.

  • Criteria for Financing

    In addition to the criteria below, there are also specific occupancy requirements that must be met as a condition of this financing.

    • We may finance up to the lesser of 90% loan-to-value 95% total approved development cost or 100% of total development cost for not-for-profit developers (excluding developer’s fees). These loan amounts should be viewed as limits and not as guaranteed funding levels.
    • Minimum 1.10 debt coverage ratio.
    • A construction loan converts into a permanent loan.
    • 1% combined processing and financing fee on any permanent only loan.
    • 2% combined processing and financing fee on all construction to permanent loans.
    • Our pricing assumes a 30-year fully amortized loan; however, amortization periods up to 35 years will be considered on a case-by-case basis.
    • A $10,000 application fee must be submitted with the loan application. This is inclusive of the processing fee and is non-refundable.
    • All loans are non-recourse.
  • Tax-exempt Properties

    Our tax-exempt bond financing plays an important role in the development and rehabilitation of affordable rental housing in Virginia.

    Check out our case studies

Contact a Virginia Housing associate for more details.