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.  

Additional Information

  • 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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