Partners > Developers > Multifamily Development > Multifamily Programs > Tax-Exempt Bond Financing

​​​​​​​A core function of Kentucky Housing Corporation (KHC) is to invest in quality, safe, and affordable rental housing throughout Kentucky. As demand grows for capital for the preservation and creation of affordable multifamily housing, one way KHC has expanded available funding and equity is through the use of conduit tax-exempt private activity bonds (Tax-Exempt Bonds) in conjunction with 4% Low-Income Housing Tax Credits, which are not limited by Kentucky's annual credit allocation and may be accessed when at least 50% of eligible development costs are financed by tax-exempt bond proceeds. 

The Kentucky Finance Cabinet allocates state tax-exempt bond authority to KHC for use in developing affordable housing. KHC's Multifamily Programs Department awards bond authority to multifamily housing developers on a first-come, first-served basis and, in some cases, by competitive application when other KHC gap resources are available. 

For-profit and nonprofit developers may submit project proposals for new construction or rehabilitation activities. These projects must comply with KHC's Qualified Allocation Plan and must meet all applicable guidelines, including minimum and universal design standards, as defined in KHC's Multifamily Guidelines.  

Tax-Exempt Bond project proposals are presented to KHC's board of directors for the bonds to be “induced," which reserves a portion of KHC's bond cap for the project, and a public hearing is held to provide an opportunity for the public to comment on the project. The project then goes before two Commonwealth of Kentucky governmental committees for approval of the issuance of the bonds for sale.

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Kentucky Housing Corporation
1231 Louisville Road, Frankfort, KY 40601
502-564-7630; 800-633-8896 (KY only); TTY 711
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