The Iowa Finance Authority and Federal Home Loan Bank of Des Moines today announced a partnership that will make up to $50 million in variable rate index bonds available for low-interest permanent financing to qualified affordable multifamily properties throughout the state. The innovative financing partnership is believed to be the first of its kind in the country involving a housing finance agency.

Of the $50 million, $11.5 million has already been used to refinance two affordable housing projects, Iowa Finance Authority Executive Director Dave Jamison said in a press release.

FHLB Des Moines provides member financial institutions and state housing finance agencies with funding and liquidity to support housing finance and community development.

Index bonds in other municipal sectors typically have maturities of three to five years; these bonds can be issued for periods up to 30 years, which aligns well with the financing terms of many affordable multifamily projects, officials said.

The bonds don’t have the risks associated with traditional variable rate demand obligations because costs are lower and there are no liquidity or remarketing counterparties involved. Moody’s Investor Service has rated the program Aa3.