Welcome to a New Quarterly Update from the Columbus-Franklin County Finance Authority
I’m Patty Huddle, President & CEO of the Finance Authority, and I’m excited to use this new column to connect you with our community of partners, investors, public leaders, and visionaries.
In each edition, I’ll offer a look behind the scenes: where we’re focusing our energy, how we’re adapting to meet regional needs, and what opportunities lie ahead. From affordable housing to clean energy and catalytic development, we are proud to be a solution-driven partner to help Central Ohio build for the future.
2025 is already shaping up to be a year of incredible growth. Our pipeline is stronger than ever, our strategic partnerships are deepening, and interest in public-private financing tools continues to rise. That’s not by accident. It’s the result of need, communication, collaboration, long-term planning, and a shared belief that innovative financing can unlock transformational impact.
This content is more than an update – it’s an invitation. Whether you’re a returning partner or a new collaborator, we want you to see how we work, why we invest, and where we’re headed next. Let’s build something great together.
My first article (below) outlines the role of the conduit issuer of tax-exempt bonds in an affordable housing low-income housing tax credit project.
With appreciation,
Patty Huddle
President & CEO
Columbus-Franklin County Finance Authority
The Role of a Conduit Tax-Exempt Bond Issuer in Affordable Housing Development
When it comes to building or preserving affordable housing, particularly through Low-Income Housing Tax Credit (LIHTC) projects, tax-exempt bonds play a critical role. As a bond issuer, the Columbus-Franklin County Finance Authority (“Finance Authority”) serves as vital conduit providing private entities access to tax exempt bonds that address community needs such as affordable housing.
How It Works
The LIHTC is a federal program that provides tax incentives to developers to build or rehabilitate affordable rental housing for low-income tenants. Developers receive tax credits over a 10-year period, which they can sell to investors to raise equity for their projects. This equity, combined with other funding sources, helps finance development costs.
“To receive the maximum amount of tax credit equity for a housing development without applying for a competitive tax credit allocation, at least 50 percent of the project costs must be financed through tax-exempt volume cap bonds,” says attorney Kip Wahlers of law firm Ice Miller, who often represents multifamily clients.
Tax-exempt bonds, also known as private activity bonds, allow developers to borrow money at lower interest rates because the interest paid to bondholders is exempt from federal (and sometimes state) taxes. These bonds are typically issued by a public entity on behalf of a private developer, who repays the bonds using project revenues. There are a limited number of entities able to issue tax-exempt bonds. Port Authorities (such as the Finance Authority) are among the eligible issuers.
From a process standpoint, securing an inducement from the issuer is key. An inducement is a preliminary approval by a government agency to support the proposed project. “It is highly desirable to have the port authority provide an inducement resolution at an early stage of the process,” Wahler adds. “This is an especially important issue in the affordable housing area where, if land or property is acquired before bonds are issued, without the inducement those costs cannot be applied towards the 50% project cost requirement. And that can kill a project.” Wahlers says this issue can be most significant in renovation projects, where a borrower might acquire one or more properties with the intention of operating them and then making improvements to rehabilitate them.”
Issuer’s Responsibilities
The conduit issuer doesn’t lend its own money or assume financial risk for repayment. Instead, it facilitates the transaction, ensuring that the project meets regulatory requirements, follows federal tax law, and serves the public interest-usually through income-based unit restrictions.
In many cases, the issuer will also provide oversight throughout the life of the bonds to ensure continued compliance and public benefit.
Tax Equity and Fairness Review Act (“TEFRA”)
When the Finance Authority serves as the conduit issuer of tax-exempt bonds for an affordable housing project, we conduct a Tax Equity and Fairness Review Act (“TEFRA”) Hearing. This is a public hearing to provide interested parties the opportunity to weigh in on the use of tax-exempt bonds for this purpose. The hearing notice is published at least a week before the hearing date. The hearing is usually hosted at the Port Authority office and is open to the public. As part of the TEFRA process, an elected official must authorize, through written consent, the use of the tax-exempt bonds for affordable housing.
Volume Cap
To maximize federal Low-Income Housing Tax Credits (LIHTC) and issue tax-exempt bonds for affordable housing projects owned by private entities, a federal volume cap allocation is required. For bond issues through the Finance Authority, this allocation is typically secured by the borrower through an application to the Ohio Department of Development. Unlike many other states where volume cap is limited, Ohio has generally had an adequate supply in recent years, making the process more accessible for developers. This cap is set by the federal government and administered on a state level by the Ohio Department of Development. The purpose is to allocate bond authority for projects that have public benefits, allowing them to access capital at lower interest rates.
Finance Authority Borrowers
In recent years we’ve served as the conduit-issuer of tax-exempt bonds for affordable housing LIHTC projects developed by borrowers such as Kittle Property Group, Elmington Capital Group, and KCG. For some borrowers, we provide a capital lease and serve as the conduit tax-exempt bond issuer thereby increasing efficiencies and the value of our participation to the client. For construction projects, every cost-savings measure and competitive or low-cost financing resource makes a difference. All told, over the last three years the Finance Authority has supported more than 2,500 units of new affordable housing in Columbus and Franklin County.
Why It Matters
By issuing conduit tax-exempt bonds, public entities enable more affordable housing developments to move forward, often in areas of critical need, for families, and for seniors. The State of Ohio has recognized this need and recently implemented a state housing tax credit that can only be used for projects funded with tax-exempt bonds. These partnerships and programs help maximize federal resources and align private investment with community priorities.
Why the Finance Authority Works
The Finance Authority is designed to meet the needs of borrowers by offering both responsiveness and meaningful financial advantages. Kip Wahlers explains, “the Finance Authority meets monthly, which allows it to help a project move to market quickly. This level of responsiveness, combined with the potential for significant cost savings, is one of the key reasons I recommend housing developers consider using the Finance Authority as an issuer.”