Tax Exempt Revenue Bond Financing

Brief description and contact information for Tax Exempt Revenue Bond Financing.

Tax Exempt Revenue Bonds are a financing method for major projects providing long term capital. Amortization is in the range of 20 to 30 years.

Eligible Projects

Multi-family housing projects where at least 20% of the units are reserved for households meeting certain guidelines on household income
Fixed assets: land, building, new construction, and equipment financing for manufacturing concerns
Fixed asset financing for 501(c)(3) non profit corporations
Publicly owned facilities, and pollution control facilities.
Costs of insurance generally dictate that eligible projects must generally be greater than one million dollars to be economically feasible.
Private activity manufacturing transactions have a limit of 10 million dollars.
Prospective projects must provide an opinion of eligibility from a bond counsel and provide evidence that an underwriter or bond purchaser has been identified before any action of the issuing authority.

Interest earned by bond purchasers is exempt from federal and usually state taxes which results in lower interest rates for bond transactions.
Interest rates, depending upon the credit of the borrower, may be 85 to 90% of prime for fixed interest transactions and even lower on floating rate transactions.

Multi-family bonds are routinely coupled with federal and state low income housing tax credits to provide further benefit.
Non-profit corporations can utilize bank eligible bonds which make it more attractive for banks to buy these bonds.
Bonds are issued by an exempt authority e.g., IDA, LCRA, PIEA, or Port Authority based upon approval of bond allocation for the project from the state.

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