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DCA explains GHFA bonds are sold by GHFA, not state debt; authority is AAA rated
Summary
DCA explained the Georgia Housing Finance Authority (GHFA) sells private activity bonds used for Georgia Dream and other programs; GHFA bond debt is not an obligation of the state and GHFA has carried a Standard & Poor's AAA rating for nearly 20 years.
Committee members asked whether bonds sold for housing finance are a state liability. Carmen Chubb and Brenda McGee said the Georgia Housing Finance Authority (GHFA) issues the private activity bonds and that GHFA debt is not an obligation of the state. Chubb and others noted GHFA is rated by Standard & Poor's at a high level and has a long history of repayment capacity.
"They are the debts of the Georgia Housing and Finance Authority. They are not debts of the state," Chubb said when explaining how GHFA bond issuance works and the agency's relationship to DCA. She added that GHFA has been rated at the highest levels and that the legislature previously increased GHFA's outstanding bond limit from $1.3 billion to $3.0 billion, and that the agency expects to request between $2.25 and $2.5 billion this year for allocation.
Lawmakers followed up on oversight and how allocations are approved; DCA said GHFA annually seeks authorization from the Georgia State Finance and Investment Commission and that the market for private activity bonds provides access to continuous funding when conditions allow.
