Credit Enhancement for Charter School Facilities Program

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Purpose

CFDA Number: 84.354A
Program Type: Discretionary/Competitive Grants


PROGRAM DESCRIPTION

This program provides grants to eligible entities to permit them to enhance the credit of charter schools so that the charter schools can access private-sector and other non-Federal capital in order to acquire, construct, and renovate facilities at a reasonable cost.

Objective

An eligible entity that receives a grant under this program must use the funds deposited in the reserve account to assist charter schools in accessing capital to accomplish one or both of the following objectives:

  1. The acquisition (by purchase, lease, donation, or otherwise) of an interest (which may be an interest held by a third party for the benefit of a charter school) in improved or unimproved real property that is necessary to commence or continue the operation of a charter school.
  2. The construction of new facilities, or the renovation, repair, or alteration of existing facilities, necessary to commence or continue the operation of a charter school.

Permissible Uses of Reserve Account Funds

Grant recipients must deposit the grant funds they receive under this program (other than funds used for administrative costs) in a reserve account established and maintained by the grantee. Amounts deposited shall be used to assist charter schools in accessing private-sector and other non-Federal capital by:

  1. Guaranteeing, insuring, and reinsuring bonds, notes, evidences of debt, loans, and interests therein.
  2. Guaranteeing and insuring leases of personal and real property.
  3. Facilitating financing by identifying potential lending sources, encouraging private lending, and other similar activities that directly promote lending to, or for the benefit of, charter schools.
  4. Facilitating the issuance of bonds by charter schools or by other public entities for the benefit of charter schools, by providing technical, administrative, and other appropriate assistance.

Impermissible Uses of Reserve Account Funds

Grantees may not use reserve account funds to:

  1. Directly pay for a charter school’s construction, renovation, repair, or acquisition.
  2. Provide a down payment on facilities in order to secure loans for charter schools. A grantee may, however, use funds to guarantee a loan for the portion of the loan that would otherwise have to be funded with a down payment.

 
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Last Modified: 04/02/2014