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Information
for Bond Lenders
- American Recovery and Reinvestment Act (ARRA)
- Nonprofit Housing Lenders 2000 - Present (PDF)
- List of Approved Underwriters (PDF)
BACKGROUND INFORMATION
The Commission does not make loans. Through you, we provide your customers with below-market financing options. The Commission does not have additional underwriting requirements. Loans involving bond financing remain your loans. You determine the amount of the loan according to your policies and underwriting criteria. The interest savings to the borrower often increases the borrower's financial strength and in turn creates a stronger more viable project.
The Commission is a self-funded state entity that neither uses tax dollars nor the good faith of the state of Washington. Commission bonds stand alone. The Commission has developed several programs and financing policies that ensure the integrity of Commission bonds.
TWO FINANCING METHODS
Letter of Credit
To provide a letter of credit
the bank does not necessarily have to be the bank who is making the loan.
The bank underwrites the project and determines the amount of the letter of
credit. The bank will work with the Commission, the Commission's bond
counsel, investment bankers, the bond trustee, and the Commission's
financial advisor in issuing and selling bonds to fund the loan to be made
by the bank. The borrower will make mortgage payments to the bank as in any
other loan transaction. The trustee will draw on the letter of credit to pay
the bond holders. The Commission requires that the letter of credit achieve
at least an "A" rating from a rating agency approved by the Commission such
as Moody's, Standard and Poor's, or Fitch.
Purchasing a Commission-issued bond/loan
For a bank funding a loan to a borrower, the Commission has
developed the
STEP (Streamlined Tax-Exempt Placement) program for
nonprofit 501(c)(3) organizations and STEP Home for for-profit
multifamily developers, which allow the bank to earn tax-exempt interest on
the loan.
11/18/2009