In 2023, Adams County is assigning $6,970,182 in Private Activity Bonds (PABs) to an eligible project(s) in Adams County. Private PABs are tax-exempt bonds that offer low-cost financing for private projects that serve a public purpose. The benefit of the PABs is that the interest paid to the bondholders is exempt from federal income tax, which can result in a lower borrowing cost or a lower interest rate mortgage.
Eligible Use of PABs:
PABs can fund a variety of projects. Generally, these bonds are best suited for affordable housing projects, such as:
- New construction or acquisition/rehabilitation of housing for low- to moderate-income people
- Single-family mortgage revenue bonds sold by local and state agencies for mortgages for low- and moderate-income people
- Mortgage Credit Certificates which is a bond allocation for qualified homebuyers (cannot be combined with single family mortgage revenue bond financing)
- Qualified redevelopment bonds for acquiring property in blighted areas, preparing land for redevelopment, and relocating occupants of structures on the acquired property
Bonds Must be Issued
The allocation is only an authorization to issue bonds and has no cash value. While private developers and nonprofit organizations can benefit from the bond proceeds, the bonds must be issued by a government authority (states, local governments or housing authorities). Once the bonds are issued, 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.
Timing of PAB Use
PABs generally must be issued the same year the volume cap is received. If the cap is not issued, the issuer can elect to carry-forward the cap for three additional years by making a special filing with the Internal Revenue Service. If the cap is not carried-forward or assigned to another eligible issuer, the issuing capacity is lost.
Private Activity Bonds can be combined with other funding sources, such as 4% Low Income Housing Tax Credits, Community Development Block Grants (CDBG), and Home Investment Partnerships Program (HOME) funds.
How to Submit a Letter of Interest
Adams County accepts Letters of Interest for the County's Private Activity Bonds. The letters shall contain the following information:
- A description of the company/organization receiving benefit of the proposed PAB issue, with accompanying current financial statements
- A description of the project in terms of economic impact
- A legal description of the property with evidence that the proposed use is in compliance with the Adams County Comprehensive Plan and zoning regulations or those of the municipality where the project is located
- A general description of the assets to be purchased and/or constructed and any other use of the proceeds of the bond issue
- Cost estimates for the proposed facility or facilities, and the amount of the proposed PAB issue
- Other funds that may be leveraged
- How many Adams County residents could be served with the request amount
- Demonstration of repayment abilities and schedules
- Project timetable
- The targeted income levels of people served
- How many new jobs would be created
- Market Study (if available)
Letters must be submitted to the Housing Policy and Community Investments Division at [email protected] with the subject line “Private Activity Bonds” or mailed to:
Adams County Government Center
Housing Policy & Community Investments
4430 South Adams County Parkway
Brighton, Colorado 80601
For questions, please contact Nicole Samson at 720-523-6902 or [email protected].