During 1981 and 1982, $22 billion of tax-free state and municipal housing bonds were sold. Many of these issues were sold when interest rates were at their peaks, from late 1981 through August of 1982. Investors are now finding that many of these attractive issues are in danger of being called away from them, for various reasons.

According to Patricia Deford, E. F. Hutton's municipal housing analyst, the high-coupon owners are concerned about one particular type of bond call, known as the "extraordinary" or "special call" feature. In this situation, the issuing agency is unable to place the proceeds from the sale of the bond into mortgages at an interest rate above the interest cost on the bond, making the program economically unfeasible. Because FHA and VA mortgage rates have fallen to the 12 percent level since August, many of the agencies are stuck with bond issues that have interest costs in excess of 13.00 percent. They are forced to exercise their extraordinary call feature and redeem bonds at par ($1,000 per bond).

Consequently, not only is the high tax-free coupon lost, but also the market value of these bonds is being dramatically lowered by the call threat. For example, the Bexar County, Tex., 13 1/4 percent bonds were quoted at 114 ($1,140 per bond) at the end of November. In December, the bonds were perceived to be callable and the price quickly dropped to par ($1,000 per bond) in just a few weeks.

In an effort to avoid calling bonds, some of the state agencies that have an issue outstanding with a high interest cost have recently sold a second issue at a lower interest cost to blend or meld the costs of the two issues to a lower interest cost in hopes that the combined proceeds may be invested at a lower mortgage rate. The Virginia housing authority sold two issues in 1982. Series A had an effective bond interest cost of 13.38 percent while series B's interest cost was 9.78 percent. By melding the two issues, the authority was able to place mortgage money at 11.75 percent. The Wisconsin Housing Finance Agency (HFA) carried out a similar strategy.

Rhonda Rosenberg, Drexel Burnhams' housing expert, feels that this may not be the best strategy to follow. She asks, "what if mortgage rates fall lower than the new blended mortgage rate?" Rosenberg feels that the unexpended bond proceeds should be used to call bonds and a new but smaller issue should be sold at a much lower bond rate to obtain a much lower mortgage rate.

Both Rosenberg and Deford suggested holders of such high-coupon bonds ask their brokers to obtain information about the status of a particular issue--in other words, to find out how much of the bond proceeds that were set aside in the acquisition fund for the purchase of mortgages has actually been used and how much remains unexpended. Investors may also write or phone state housing agencies for this information. Investors should obtain the name of the bank trustee--from the face of the bond itself--who holds all the funds and who knows how much has been disbursed, and what the possibility is that an issue will be called.

Rosenberg feels that the following HFA issues stand a good chance of being called: the Florida 13.50 percent; the Massachusetts 13.375 percent; the Nevada 13.25 percent; New Hampshire 13.625 percent, and the Pennsylvania 13.75 percent. If, after having researched the status of such issues, the investor feels that there is a better than 50 percent chance that the issue will be called, and it is currently selling above par, then the issue should be sold. Otherwise, just enjoy the high return, as long as it lasts.

The Treasury will sell a two-year note on Wednesday, in minimum denominations of $5,000. This issue should come in around 9 percent.