Developers must pay all costs of issuance at bond closing, including, but not limited to, bond counsel, underwriter, trustee and financial advisor fees, as well as rating agency fees. Any deposits will be credited toward the cost of issuance at closing.
Only 2% of the proceeds of a tax-exempt bond issue may be used to pay costs of issuance. Costs over 2% must be paid from other sources secured by the developer including, potentially, the proceeds of taxable bonds.
The initial issuer fee of 12.5 basis points (0.125%) on the bond amount and the first year of the annual administrative fee of 12.5 basis points (0.125%) of the original bond amount are both paid at bond closing. Developers will also pay an annual administrative fee of 12.5 basis points (0.125%) of the original bond amount to the Housing Authority, for the qualified project period to cover the Housing Authority’s ongoing administration and monitoring costs for the project.