U.S. Department of Education: Expanding Opportunity through Quality Charter Schools Program, Grants for Credit Enhancement for Charter School FacilitiesDeadline: May 11, 2017
The Grants for Credit Enhancement for Charter School Facilities (Credit Enhancement) program provides grants to eligible entities to demonstrate innovative methods of helping charter schools to address the cost of acquiring, constructing, and renovating facilities by enhancing the availability of loans and bond financing. The Credit Enhancement grants program has resulted in a portfolio of grantees using Federal funds to enhance the credit of charter schools so that they can access private-sector and other non-Federal capital in order to acquire, construct, and renovate facilities at a reasonable cost.
There is one Competitive Preference Priority, worth up to 15 points, under the current program announcement: The capacity of charter schools to offer public school choice in those communities with the greatest need for this choice based on:
- The extent to which the applicant would target services to geographic areas in which a large proportion or number of public schools have been identified for improvement, corrective action, or restructuring under Title I of the Elementary and Secondary Education Act of 1965, as amended by the No Child Left Behind Act of 2001 (NCLB).
- The extent to which the applicant would target services to geographic areas in which a large proportion of students perform below proficient on State academic assessments.
- The extent to which the applicant would target services to communities with large proportions of students from low-income families.
The Department of Education has also issued an invitational priority for projects proposing the development of one or more partnerships that will enable the applicant to leverage newly created or previously untapped sources of capital or other assistance, which may include non-Federal programs, in financing charter school facilities.
An eligible entity receiving a grant shall, in accordance with State and local law, deposit the funds received, other than funds used for administrative costs, in a reserve account established and maintained by the eligible entity. Amounts deposited in such account shall be used by the eligible entity for one or more of the following purposes:
- Guaranteeing, insuring, and reinsuring bonds, notes, evidences of debt, loans, and interests therein
- Guaranteeing and insuring leases of personal and real property
- 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
- 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 (including the recruitment of bond counsel, underwriters, and potential investors and the consolidation of multiple charter school projects within a single bond issue)
Funds received and deposited in the reserve account shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly low-risk securities. Any earnings on funds received shall be deposited in the reserve account and used in accordance with this program.
An eligible entity receiving a grant must use the funds deposited in the reserve account to assist one or more charter schools to access private-sector capital to accomplish one or more of the following objectives:
- The acquisition (by purchase, lease, donation, or otherwise) of an interest (including 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
- 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
- The predevelopment costs required to assess sites and to commence or continue the operation of a charter school
Amount: Up to $16,000,000 is available, pending Congressional action. Grants will range from $4,000,000 to $8,000,000 each. An anticipated 3 awards will be made.
Eligibility: A public entity, such as a State or local governmental entity; a private, nonprofit entity; or a consortium of such entities. Each applicant should have expertise in capital market financing.