The lowered private activity bond threshold took effect January 1st, and state HFAs are now rolling out implementation policies that vary significantly by state.

Threshold Change:

• Minimum bond financing dropped from 50% to 25% of aggregate basis
• Less tax-exempt debt required per project
• Frees up bond volume cap for additional deals

State Implementation:

• California CDLAC: Emergency rulemaking initiated
• Housing New Mexico: Updated 4% LIHTC plan
• Colorado: Phased approach with 45% upper limit for 2026

Developer Impact:

• Acquisition-rehab deals: $5M bond requirement now $2.5M on $10M project
• Lower debt service and transaction costs
• Improved project economics
• Work with bond counsel on state-specific requirements

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