ELIGIBLE INSTITUTIONS

 

A nonprofit higher education institution is eligible to apply for financing through WHEFA if it is certified by the IRS under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and owns and will continue to own 100% of the project, or that portion of the project which will be financed by tax-exempt bonds, for as long as the bonds are outstanding.

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The higher education institution must: 

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• have its main campus permanently situated in the state of Washington;

• be open to all residents of the state of Washington;

• not restrict entry on racial or religious grounds;

• not be deemed pervasively sectarian;

• provide programs of education beyond high school leading to at least the baccalaureate degree;

• be accredited by the Northwest Commission on Colleges and Universities or by an accrediting association recognized by the Washington Student Achievement Council (WSAC); and

• comply with all applicable local and state laws, including, but not limited to, laws against discrimination, zoning ordinances, building codes, and environmental growth management regulations.

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ELIGIBLE PROJECTS

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All financed projects must comply with all applicable local and state laws, including, but not limited to, zoning ordinances, building codes, and environmental and growth management regulations. Projects must further the nonprofit institution's stated 501(c)(3) purpose.

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Real estate projects must be located in the state of Washington and may include, but are not limited to:

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• Dormitories or other multi-unit housing facilities for students, faculty, officers, or employees

• Dining halls

• Student unions

• Administration buildings

•  Academic buildings

• Classrooms

• Laboratory facilities

• Athletic facilities

• Health care facilities

• Maintenance, storage, or utility facilities

• Parking facilities

• Energy facilities

• Any other related structures, facilities, or equipment

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Federal tax law plays the most important role in determining eligibility standards. State law and Authority policy may set additional eligibility standards. Since the eligibility for financing of a particular project may depend on the interpretation of the Federal tax code and of State law, the Authority's bond counsel ultimately determines the eligibility of projects and the use of bond proceeds.

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INELIGIBLE PROJECTS

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Some types of projects are not eligible. These include, among others;

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• Projects in which religious activities are conducted, such as churches, synagogues, and mosques. Projects sponsored by religious organizations that serve non-sectarian purposes may be eligible.

• Projects whose primary purpose is gambling or the sale of alcoholic beverages for consumption off-premises.

• Airplanes, skyboxes, and private luxury boxes.

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ELIGIBLE USE OF BOND PROCEEDS

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Bonds may be used to make secured loans to 501(c)(3) organizations for the following purposes:

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• Land acquisition

• Expansion, acquisition, renovations, and/or new constructions, and related costs of buildings

• Equipment

• Refinancing of existing indebtedness to pay for costs incurred for the types of projects listed above. The existing debt to be refinanced must be to a third party, such as a financial institution, that is unrelated to the nonprofit organization. Internal debt may not be refinanced, except in limited circumstances

• Debt service reserves

• Credit enhancement fees and bond insurance premiums

• Capitalized interest

• Interest rate swap costs, including acquisition and termination costs, if approved by bond counsel

• Costs of issuance, up to 2% of the total bond issue size

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The Authority will issue bonds for construction financing, for permanent financing, and for combined construction and permanent financing.

 

Bond proceeds may only be used to finance capital and capital related expenditures. Operating expenditures, including working capital, may not be financed, except as is allowed under federal law. Bond proceeds may not be used for facilities within a project which are not directly related to the borrower and to the borrower’s purpose as defined in its nonprofit organizational documents.