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Industrial
Development Bonds (IDBs), Empowerment
Zone Bonds (EZBs) and Non-profit
Bonds (501c3) offer both taxable and tax-exempt financing
for commercial, industrial, and non-profit development projects
at favorable interest rates, usually below conventional borrowing
cost.
Qualified
projects must fulfill a public benefit criteria, such as job
creation for low and moderate income City residents. Other necessary
requirements include a history of good credit and evidence of
sufficient income to service the debt.
Maximum
financing participation is 80% of the project costs, or appraised
value of the underlying property. The IDA has a loan assistance
program, the Subordinate Loans Revolving
Special Fund, which may be able to bridge a financing gap.
A single bond issue may include both construction and permanent
financing. Terms range from 10 to 20 years, amortized over 30
years. Capital interest only periods are permitted. Collateral
normally consists of the project’s underlying real estate.
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