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American Recovery & Reinvestment Act (ARRA)
WSHFC Nonprofit Facility and Housing Bonds

NEWS & HIGHLIGHTS

Tax-exempt financiing opportunity for lenders working with 501(c)(3) organizations

To date, the Washington State Housing Finance Commission has partnered with the lending community to issue nearly $1 billion dollars in bonds for nonprofit organizations. For the next two years, you have the opportunity to bring even more value to your 501(c)(3) customers by offering tax-exempt financing.

ARRA offers some positive changes benefitting you and your customers

• The Commission can now issue “Bank Qualified” bonds on behalf of your nonprofit 501(c)(3) customers.
• ARRA has raised the threshold definition for “small issuer” to $30 million in annual tax-exempt borrowing.
• Until 12/31/10, the IRS looks to the nonprofit and not the Commission when defining “small issuer.”
• ARRA also creates a de minimis exception for interest rate deductions on all new private activity tax-exempt bonds issued before 12/31/2010. As with Bank Qualified bonds, you will be able to deduct 80% of the interest expense of new tax-exempt loans/investments. This deduction will be available to bank purchasers as long as these investments constitute less than 2% of the average adjusted basis of all your institution’s assets.

Higher deductions mean better rates and more opportunities to meet current underwriting standards

WANT TO KNOW MORE?

David Clifton, Assistant Director
Multifamily Housing & Community Facilities Division
206.287.4407 | david.clifton@wshfc.org