1 / 11

Bonds & Building a Proforma

Learn about the benefits and process of issuing bonds for housing projects. Understand how to build a comprehensive proforma to analyze costs, income, and expenses. Get guidance on making informed decisions for your housing development.

couto
Download Presentation

Bonds & Building a Proforma

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Bonds & Building a Proforma Presented by: David Danenfelzer, Senior Director Texas State Affordable Housing Corporation

  2. Just like a loan, but with some key differences. You need an Issuer who can make the bonds tax exempt. Investors will accept a bit less in interest rate because the income on bonds is tax exempt. Private Activity Bonds allow you to apply for 4% housing tax credits (not 9%). Bonds can be issued as short term securities, so you can take advantage of other federally backed mortgage products and grants to lower debt expenses. Bonds for Housing

  3. Who can issue bonds? • Housing Finance Corporations • Public Housing Agencies • Public Facilities Corporations • Cities and Counties Bonds for Housing

  4. Bonds for Housing

  5. PRO FOR·MA - prō ˈfôrmə/, • Adjective - done or produced as a matter of form. • "Pro forma reports“ denoting a standard document or form, especially an invoice sent in advance of or with goods supplied. “Of a financial statement” showing potential or expected income, costs, assets, or liabilities, especially in relation to some planned or expected act or situation. • Adverb - as a matter of form or politeness. • "he nodded to him pro forma“ • Noun - a standard document, form or financial statement. Building a Proforma

  6. Costs • Acquisition • Construction • Soft costs • Financing costs • etc. Income • Rents • Utilities • Income limits • Vacancy rates • etc. Expenses • Management • Maintenance • Utilities • Ins & Taxes • etc. Building a Pro forma

  7. How do I build my Pro Forma? You don’t have to build your own! Use models from your key funders! USDA TDHCA HUD These will be the best places to start! Building a Pro Forma

  8. If you really need your own Pro Forma? Keep it simple so not only you can understand it! Be sure it can test different scenarios and assumptions! Be sure you can share it with others! Test it over and over until you break it! Then fix it. Building a Pro Forma

  9. What should your Pro Forma tell you? • Who am I helping (AMI)? • How much can I borrow? • Where can I cut costs? • Can I improve income through unit size or type? • What are my assumptions and how far off from other’s estimates am I? • Are my costs for construction reasonable? Building a Proforma

  10. Last Piece of Advice – Just because you use a consultant doesn’t mean you don’t need to understand the Pro Forma. Underwriters and Funders know you can’t know everything, but they want to you understand what you give them. Building a Proforma

  11. Questions?

More Related