Charter School Facilities Credit Enhancement Grant Program

The Charter School Facilities Credit Enhancement Grant Program, managed by the California State Treasurer's Office, aims to support charter schools in California by providing grants that fund debt service reserve accounts. This initiative is designed to lower borrowing costs for charter schools, thereby facilitating the acquisition, renovation, or construction of school facilities. Eligible applicants must demonstrate a strong financial position and utilize funds within six months of approval to ensure effective resource allocation.

NOTE: Grants under the Program shall be available and awarded on a rolling first-come first-served basis to the extent that funding and appropriations are available, and the requirements of the Program are satisfied.
Purpose
The federally-funded Charter School Facilities Credit Enhancement Grant Program provides grants to fully or partially fund debt service reserve accounts on bond transactions issued through the Authority. The grant is intended to reduce the overall cost of borrowing for charter schools as it eliminates the need to fund the reserve through bond proceeds.
Description
Designed to fund debt service reserves for the financing of acquisition, renovation, or construction of charter school facilities, or the refinancing of existing charter school facility debt.

Eligibility

Funds are available to charter schools operating in the state of California. Charter school must be organized under Section 501(C)3 of the IRS code or is a nonprofit public benefit corporation under California Corporations Code section 5110 et seq.Also meet the federal definition of charter school.Ability to demonstrate that Program funds are leveraged at a minimum of an 8:1 loan-to-award ratio.Investment grade credit rating from a national credit rating agency or a demonstrated ability to privately place debt with an investor.Eligible Use of Program FundsProgram funds must be applied toward funding the primary debt service reserve requirement for debt issued by or through the Authority for an awardee charter school.The program covers debt issued by or through the Authority to acquire, renovate or construct charter school facilities, or refinance existing charter school facility debt.The Authority may award up to $1.5 million per application.The term of repayment for any financing in conjunction with a program award shall not exceed the useful life of the financed asset.The grant award shall be held in trust by the Authority or an Authority-approved financial institution, solely for authorized purposes and shall not be released to awardee charter schools without the Authority’s or trustee’s approval.  Conditions for release of the grant funds throughout the term of the financing will be determined by the Authority, in collaboration with all lending parties, prior to closing of the financing.Awarded reservation of funds shall be released and returned to the Authority when the funds are no longer needed for the authorized purposes.Awarded reservations will expire if the charter school does not use the funds within six months of Authority approval.