- About WSHFC
- Bond Financing
- Housing Credit
- Property Managers
Lenders/ Finance Team
Post-Bond Issuance Guide
Information for Bond Lenders
The Commission does not make loans. Through you, we provide your customers with below-market financing options. The Commission does not have additional underwriting requirements. Loans involving bond financing remain your loans. You determine the amount of the loan according to your policies and underwriting criteria. The interest savings to the borrower often increases the borrower's financial strength and in turn creates a stronger more viable project.
The Commission is a self-funded state entity that neither uses tax dollars nor the good faith of the state of Washington. Commission bonds stand alone. The Commission has developed several programs and financing policies that ensure the integrity of Commission bonds.
Letter of Credit
To provide a letter of credit the bank does not necessarily have to be the bank who is making the loan. The bank underwrites the project and determines the amount of the letter of credit. The bank will work with the Commission, the Commission's bond counsel, investment bankers, the bond trustee, and the Commission's financial advisor in issuing and selling bonds to fund the loan to be made by the bank. The borrower will make mortgage payments to the bank as in any other loan transaction. The trustee will draw on the letter of credit to pay the bond holders. The Commission requires that the letter of credit achieve at least an "A" rating from a rating agency approved by the Commission such as Moody's, Standard and Poor's, or Fitch.
Purchasing a Commission-issued bond/loan
For a bank funding a loan to a borrower, the Commission has developed the STEP (Streamlined Tax-Exempt Placement) program for nonprofit 501(c)(3) organizations and STEP Home for for-profit multifamily developers, which allow the bank to earn tax-exempt interest on the loan.