The Government Finance Officers Association (GFOA) recognizes that the primary concern of state and local governments is the continued ability to provide its citizenry basic essential services. In order for state and local governments to insure the continuation of these services, we must retain access to the tax-exempt bond market at reasonable interest rates.
The GFOA recognizes that single-family Mortgage Revenue Bonds can and have played an important role in providing home mortgage financing at a time when the cost and availability of mortgage financing caused severe problems in the housing market. Mortgage Revenue Bonds can be used in urban or community development by assisting individuals with low to moderate incomes who otherwise could not afford to enter the housing market.
The Government Finance Officers Association is concerned with the effects of the growing volume of single-family Mortgage Revenue Bonds and recommends that
- the total volume be reduced by state and local governments, and
- Congressional legislation extending the exemption of single-family mortgage revenue bonds through December 31, 1986, be enacted subject to the following additional conditions:
- The use of single-family Mortgage Revenue Bonds should relate to the adequacy of affordable mortgage money available and the level of housing starts.
- The use of single-family Mortgage Revenue Bonds should be targeted to low-and moderate-income individuals and community development and/or urban revitalization projects, and restricted to the area median price of housing. Limitations on these projects should be general in nature allowing flexibility for state and local governments designing programs which best meet their needs.
In addition, we recognize that the federal government has historically played a key role in assisting and supporting the housing market. The Government Finance Officers Association urges the U.S. Congress and the Administration to undertake a study of alternatives to Mortgage Revenue Bonds such as the development of a tax credit or other methods to aid low-and moderate-income first-time homebuyers during periods of high interest rates.
- Publication date: June 1983