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Tax-Exempt Bonds: Nonprofit Ownership

Nonprofit Housing Financed with Bonds (PDF)

Nonprofit Housing Lenders (PDF)


Organizations with a 501(c)(3) determination letter from the IRS


Nonprofit organizations can use tax-exempt bonds to finance housing that is directly related to their mission, including:

Construction and rehabilitation of buildings

Purchase of land and buildings

Refinancing of existing capital debt

Pre-Development costs, such as architectural, engineering, accounting, legal costs directly related to project

Low-Income Housing Tax Credits cannot be used with this type of bond.


The full range of living options provided by nonprofit organizations can be financed:

Independent living units (apartments)

Assisted living units

Group homes

Transitional housing

Single room occupancy units

Emergency shelters

Residential facilities for the homeless

Limited equity cooperatives (restrictions apply)

Nursing homes

CCRCs (continuing care retirement communities)

Housing for special-needs populations


Smaller projects generally use STEP (Streamlined Tax-Exempt Placement).  It uses standardized documents to save time and costs. The lender makes the credit decisions. The lender earns tax-exempt interest from the bond and passes the savings on to the borrower.

Larger projects, when borrowing typically exceeds $5 million, investment banks sell the bonds publicly to retail and institutional investors.


Nonprofit Housing Program Application


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