Taxable Rate Projects will be underwritten at a rate based upon the 30-year Treasury Bond plus an index which is currently 230 basis points. The rate is based upon the 30-year Treasury Bond and fluctuates according to the market. The index will be updated on a monthly basis. It is the Developer's responsibility to contact the HMFA to determine if there have been any revisions to the index. The rate is locked one week prior to the pricing of bonds.
Developers are responsible for the interest rate risk prior to bond pricing.
The cost of issuance is the Developer's allocable portion of the costs incurred by the HMFA for the issuance of bonds which include, but are not limited to, underwriter's fee, bond counsel fees, rating agency fees, printing costs, trustee and trustee's counsel fees, bond insurance premiums and auditors' fees. This election must be made two weeks prior to the date of the bond pricing. The payment of same must be made one week prior to bond pricing. The costs associated with the issuance vary dependent upon the overall size of the bond issue. Negative Arbitrage Escrow Negative arbitrage represents the difference between the rate the HMFA pays on the bond and the rate realized by the HMFA on the investment of the bond proceeds.