The CBO Financial team specializes in helping project sponsors secure flexible, below-market financing with a focus on high impact projects in low income communities. We help make these vital projects a reality with a combination of flexible financing instruments to close gaps in financing such as New Markets Tax Credits, Property Assessed Financing and loan guarantees. Our financial experts are skilled at combining public and private funding sources so that projects that might have otherwise stalled can move forward.
CBO has worked with government agencies, nonprofits, and developers to build or renovate facilities including charter schools, child care/early education centers, vocational training facilities, drug rehab centers, mixed use facilities and community centers – all of which contribute to the revitalization of entire communities. CBO believes in every project we undertake and works hard to make each one a reality. Working together, we can define a strategy for success.
CBO begins by performing a thorough analysis of possible government subsidies, grants, loans, eligibility for tax-exempt bonds etc., we then strategize with you to define the most cost effective financing structure. CBO then takes a leadership role in developing a comprehensive project plan and financing request package to meet your funding goals. CBO advocates for you on your behalf to obtain funding, transforming your concept into brick and mortar.
CBO Financial specializes in stretching project dollars so that developers can accomplish more for less. We’ve financed over $850 million in high impact investments nationwide, including $150 million using New Markets Tax Credits awarded to a CBO subsidiary. Backed by powerful funding tools and expertise, you’ll be pushed through to the finish line.
Financing programs include:
New! PROPERTY ASSESSED FINANCING
Property assessed financing is a new instrument for commercial property owners to finance improvements to existing property or to close gaps in financing for new construction. Unlike a traditional loan, the financing is paid back through an assessment on the building’s property taxes. States and local municipalities can opt in to this new program by passing legislation that reflects priorities for the local community. Currently 19 states and Puerto Rico have enabled Property Assessed Financing to fund priorities such as renewable energy, energy efficiency, water conservation, weatherization and earthquake resiliency improvements, and Puerto Rico allows it for any expenditure related to tourism.
Benefits of Property Assessed Financing
- 100% funding for improvements up to 35% of the value of the building.
- Immediate positive cash flow for energy improvements with no money down, while increasing property value by lowering operating expenses.
- Assessment means better rates and terms (up to 30 years), off-balance sheet with no mortgage recorded, and payments stay with the property if it is sold.
- Easy to qualify, since the loan is against the property the owner’s credit is not a deciding factor, allowing for fast approval and funding.
NEW MARKETS TAX CREDITS
The $65 billion NMTC program is intended to spur investment in low income communities that would not otherwise occur by providing up to 25% of a project cost in very flexible financing, which is typically forgiven at the end of a seven-year compliance period. The program is administered by independent companies known as Community Development Entities (CDEs) that compete annually for authority under the program; funding for 2016 was doubled to $7 billion, another $3.5B will be awarded in 2017, 2018 and 2019. The U.S. Treasury Department has awarded CBO Financial’s subsidiary, Community Development Funding, LLC, with $150M in authority under the NMTC program in six separate awards, one of only a few dozen organizations in the country to have received six or more awards. We received awards in the first (2003) and second rounds, meaning we’ve been deeply involved since the program’s inception.
In addition, the CBO team has taken a leadership role in securing 14 additional direct NMTC allocations for clients totaling $385M (including $45M for the Puerto Rico Housing Finance Authority and $10M for the Municipality of Vega Baja) and has placed $250M in transactions with CDEs for clients. In addition, we have funded the only NMTC transactions to date in Puerto Rico, and recently in Guam. If we don’t have NMTCs available, we can act as an access point to the industry by locating other sources of tax credits for you. We prepare comprehensive financing request packages, help negotiate terms and take a leadership role in closing the financing. For more information, please review our NMTC overview.
Benefits of NMTCs
- Funds up to 25% of project cost with low cost financing that is typically forgiven.
- Up to 100% loan to value.
- Very low interest rate (typically less than 1% annually).
- Benefits severely distressed communities
The USDA will guarantee up to 90% of a loan for eligible projects, which is based on location and/or project type.
Benefits of USDA Guarantee
- Low interest rate with AAA rating for guaranteed portion of loan
- Allows lenders to make loans they otherwise would not
- Up to 80% loan to value
- Can be combined with NMTCs and Property Assessed Financing