Affordable Housing and Homeownership

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. Since the middle of 2023, conditions have 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 at least one point below the conventional taxable market mortgage rates at the time of pricing.

The Pima IDA issued the first 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) are using 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) are expected to use 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.

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 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.

The Pima IDA is already working on a new bond issue for fall of 2024, and anticipates that it could again issue these bonds and make these below market mortgage loans available in Pima County within the next 30-45 days. 

https://www.pimatucsonhomebuyers.com/lighthouse