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STEP (Streamlined Tax-Exempt Program) for Nonprofit Housing


The STEP (Streamlined Tax-Exempt Placement) Program makes below-market interest rate loans available to nonprofit borrowers by using tax-exempt nonprofit bonds.  STEP uses standardized documents that reduce the time and cost of issuing tax-exempt bonds, making this type of financing feasible to a wider range of borrowers and projects. STEP works best for nonprofit projects with borrowing needs of less than $5 million. Larger projects are possible using other Commission programs.


STEP borrowers must be 501(c)(3) organizations. STEP lending partners can be commercial banks, thrifts, and credit unions. For-profit multifamily developers should contact the Commission regarding other available programs.


Borrowers are able to negotiate their interest rates with their lender, typically resulting in a savings of one to two percentage points below market interest rate.


Nonprofit 501(c)(3) organizations may finance capital facilities that are directly related to their purpose. Some examples include:

Multifamily housing

Nursing homes

Assisted living facilities

Homeless shelters

Transitional housing

Group homes


Administrative offices

For-profit, religious, and health care uses may either affect tax-exempt eligibility or how much of your project may be financed with a tax-exempt loan. We are happy to help you determine whether all or part of the facility can be financed with tax-exempt bonds.


Restrictions do apply. Please contact the Commission for specific details.

New construction

Acquisition of land or buildings


Soft costs, like architectural fees

Refinance of existing capital debt

Bond Issuance fees


The STEP program converts what would normally be a taxable loan into a tax-exempt bond. Because interest payments become tax-exempt income to the bank, the lender passes on their tax savings to the borrower in the form of a lower interest rate. Lower interest rates mean a lower debt service or a larger loan for the borrower. Lenders use the same underwriting criteria and determine the interest rate as they would for any typical commercial loan.


Please feel free to contact our staff to discuss program costs.


Please feel free to contact our staff at the details below. We prefer to start working with nonprofits during the preliminary capital campaign planning stage. Many decisions made early on will affect your financing flexibility. We are here to help you through the bond financing process. Bonds require several steps: a scoping meeting, a public hearing, additional loan documents and a Commission financing resolution. Sounds difficult, but we make it easy. If you are a nonprofit who needs to borrow funds for your capital project, you deserve a lower interest rate. By helping you save money on your debt service, you can put those valuable dollars toward serving the mission of your organization.

Submit a Nonprofit Housing Application

Contact banks:  Ask banks about their loan criteria and terms, and secure a preliminary bank loan commitment. Please ask lenders unfamiliar with our program to call us. What will banks want to know? Which banks have we worked with?


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Washington State Housing Finance Commission
1000 Second Avenue, Suite 2700, Seattle, WA 98104
Phone: 206.464.7139 or 800.767.4663 | Fax: 206-587-5113 | WebMaster@wshfc.org
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