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AURORA, MN-Moody’s Investors Service has downgraded the rating on $3.13 million of outstanding Aurora Housing and Redevelopment Authority’s multifamily housing revenuebonds to Ba3 from Baa2. The rating downgrade to below investment grade is based on the poor performance of city’s Section 8 project, Irongate apartments.

The property has an occupancy rate of 76% and increasing expenses in every property category has resulted in very weak property financials. Irongate Apartments is a 78-unit Section 8 project for both the elderly and families. The project is ineligible for annual rent increases from the US Department of Housing and Urban Development, unless comparability can be shown, and therefore project revenues are unlikely to increase in the future.

HUD bases its rent subsidies on market rents paid for comparable units in the immediate area.

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