America’s Charter Credit Enhancement Program

The America’s Charter program of Building Hope assists schools that are preparing to finance the acquisition, renovation or construction of facilities by guaranteeing mortgage loans, leases and leasehold improvement loans.  The America’s Charter program has provided 15 loan and lease guarantees in excess of $9.0 million supporting financing transactions in excess of $100 million since its inception.  Working with schools in Indiana, Massachusetts, Washington, D.C. and Texas, the America’s Charter program has helped to create over 3,650 new public charter school seats.  Additionally, America’s Charter has worked with 15 lenders and helped to facilitate lender and school relationships.

When there is a shortfall in the financing for a charter school facility, an America’s Charter credit enhancement can provide the senior lender in the transaction an incentive to loan more money to a school than it would in ordinary circumstances.  Likewise, an America’s Charter credit enhancement can provide an incentive for a lessor (landlord) to extend a lease to a school for its facility.  The America’s Charter program helps “close the gap” in a transaction and allows a school’s facility project to move forward.  Usually, the credit enhancement results in lower borrowing costs for the school.

America’s Charter has no restrictions on the enrollment characteristics or the geography of the charter schools eligible for the program.  Preference, however, will be given to schools serving a high percentage of disadvantaged students as well as schools in their early stages of development.  Other characteristics of our program include:

• A preferred term of guarantee of 3 to 5 years with gradual amortization over the 3 to 5 year period.  Our guarantees have ranged in size from $250,000 to $1 million.  Each transaction, however, is different and is tailored to the needs of the school.
• Guarantees that are designed to attract bank participation, management organization contributions, foundation support and other contributions.
• Access to advisory services and real estate technical assistance related to financing, facilities and credit matters.
• Reasonable fees including an up front commitment fee equivalent to 1% of the guarantee amount and an annual fee of 1% of the guarantee balance.

 

Application Process

Any charter school with facility needs is encouraged to contact us early in its planning process.  We will discuss your plans with you and describe our products (see Contact Us).

As your school’s specific needs become evident, we encourage your school to submit an application to us.  Use the links below to access our applications:

America’s Charter credit enhancement program application for a mortgaged property

America’s Charter credit enhancement program application for a leased property

Once we receive and review your application, and if your application is selected for further review, we will ask for the supplementary materials listed at the end of the application to assist us in evaluating your school’s financial position and readiness to take on the proposed project.