The Pima IDA has issued, either on its own or
jointly with the Tucson IDA, tax-exempt single-family mortgage revenue bonds in
Pima County since 1983. These bonds provide low interest rate mortgage loans for
owner-occupied single family residences (including manufactured housing), as
well as down payment assistance, to eligible borrowers throughout Pima County. In
order to qualify for these loans through the usage of these bonds, there are
federal and state restrictions placed upon the amount of income that the
homebuyer can earn, the purchase price of the home and a first-time homebuyer
requirement. The benefit is a thirty (30) year mortgage loan that is usually below
the conventional taxable market mortgage loan rate, typically with some
down-payment assistance.
These bonds are generally only available when
the financial markets show that there is a difference between tax-exempt rates
and conventional taxable market mortgage rates that is sufficient to provide
borrowers with a below-market-rate mortgage (normally with multiple points of down
payment assistance or closing cost assistance) and present investors in those
bonds with an acceptable rate of return.
For many years, these bonds could not be issued
by local IDAs, given the status of the financial markets, the difference
between taxable and tax-exempt rates and the capital investment that the IDAs needed
to make to allow the bonds to be issued. Historically, low conventional
mortgage interest rates in the COVID era meant that the difference between
tax-exempt and taxable mortgage rates could not be used to assist borrowers
through these bonds. During the middle of 2023, conditions improved in the
market where bonds can be issued. However, each issue of bonds is dependent
upon the financial markets at the time that the bonds are issued. In this
program, which reaches largely first time homebuyers, the Pima IDA strives to have
the interest rate on the mortgage loans through the program approximately one point
below the conventional taxable market mortgage rates at the time of pricing.
Since 2009 The Pima IDA issued the first series of single-family
mortgage revenue bonds jointly with Tucson IDA in the amount of $25 Million in
August, 2023, with the mortgage loans being reserved within Pima County rapidly
(approximately 35 days) by approved lenders. Approximately 95 new home
purchasers (almost all first-time homebuyers) used this program at an interest
rate of 6.20% per year and a down payment assistance level of 4% of the first
loan amount. This series of bonds was marketed as Lighthouse 1.0.
The Pima IDA, as a sole issuer, issued a second
series of single-family mortgage revenue bonds again in the amount of $25
Million in November 2023, with the mortgage loans again being reserved within
Pima County quickly (approximately 30 days) by approved lenders. Approximately
96 new home purchasers (almost all first-time homebuyers) used this program at
an interest rate of 6.89% per year and a down payment assistance level of 4% of
the first loan amount. This series of bonds was then marketed as Lighthouse
2.0.
The Pima IDA again issued a third series of
single-family mortgage revenue bonds jointly with Tucson IDA in the amount of
$25 Million in March, 2024, with the mortgage loans being reserved within Pima
County quickly (approximately 20 days) by approved lenders. Approximately 92 new
home purchasers (almost all first-time homebuyers) used this program at an
interest rate of 6.00% per year and a down payment assistance level of 4% of
the first loan amount. This series of bonds was marketed as Lighthouse 3.0.
The Pima IDA, again as a sole issuer, issued a
fourth series of single-family mortgage revenue bonds again in the amount of
$25 Million in April 2024, with the mortgage loans again being reserved within
Pima County in just over one hour by approved lenders. Approximately 90 new
home purchasers (almost all first-time homebuyers) used this program at an
interest rate of 6.13% per year and a down payment assistance level of 4% of
the first loan amount. This series of bonds was then marketed as Lighthouse 4.0.
The Pima IDA, as a sole issuer, issued a fifth
series of single-family mortgage revenue bonds again in the amount of $25
Million in July 2024, with the mortgage loans again being reserved within Pima
County in two days by approved lenders. Approximately 93 new home purchasers
(almost all first-time homebuyers) used this program at an
interest rate of 6.10% per year and a down payment assistance level of 4% of
the first loan amount. This series of bonds was then marketed as Lighthouse 5.0.
The Pima IDA, as a sole issuer, issued a sixth series of single-family mortgage revenue bonds again in the amount of $25 Million in September, 2024, with the mortgage loans again being reserved within Pima County in two weeks by approved lenders. Approximately 91 new home purchasers (almost all first-time homebuyers) used this program at an interest rate of 5.84% per year and a down payment assistance level of 4% of the first loan amount. This series of bonds was then marketed as Lighthouse 6.0.
The Pima IDA again issued a seventh series of single-family mortgage revenue bonds jointly with Tucson IDA in the amount of $28 Million in March, 2025, with the mortgage loans being reserved within Pima County quickly (approximately one hour) by approved lenders. Approximately 105 new home purchasers (almost all first-time homebuyers) used this program at an interest rate of 6.00% per year and a down payment assistance level of 4% of the first loan amount. This series of bonds was marketed as Lighthouse 7.0.
These Single Family Mortgage Revenue Bond
Programs of the Pima IDA and the Tucson IDA (also known as the Lighthouse
Program) were awarded the 2024 Single Family Excellence Award by the National
Association of Local Housing Finance Agencies at their annual 2024 meeting in Las
Vegas, NV in May, 2024.
The Pima IDA believes strongly in their mission,
and that this program helps many homebuyers (particularly first time
homebuyers) who need help with high mortgage rates and/or down payment
assistance to get them into a new home. As noted in The Prosperity Initiative adopted
by Pima County, this is a way to build wealth for families, since homeownership
(compared to renting) builds assets, improves opportunity and creates
intergenerational wealth.