I am writing this update shortly after the most sweeping and complex public housing financing thus far, for the Puerto Rico Public Housing Authority, was completed. That financing included the defeasance of approximately $400 million in "governmental bonds," issued in 2003 under the United States Department of Housing and Urban Development (HUD)'s Capital Fund Financing Program (CFFP) to finance renovations and be repaid by the housing authority (PHA) from future appropriations of public housing capital funds. These bonds were replaced with CFFP "private activity bonds," required to replace governmental bonds because of the participation of private owners. The new owners of the public housing will receive loans of private activity bond proceeds from the PHA to be repaid on a deferred basis, continue to be bound by public housing rules and other negotiated restrictions, and contribute approximately $235 million in equity for the right to use 4% low-income housing tax credits (Tax Credits). The result of all of this will be substantial additional funding to rehabilitate thousands of Puerto Rico public housing units.
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