The Department of Education is calling on states, local governments, and nonprofitorganizations to compete for $25 million in grants that would allow them to providecredit enhancements for charter school construction projects, including those financedwith tax-exempt or taxable municipal bonds.
Applications for the grants, which are to be made under the Credit Enhancement forCharter School Facilities Program, are due June 3. The Department of Education expectsto award the grants for fiscal 2003 to three to five organizations this summer.
The grants can be used to enhance deals by guaranteeing, insuring, or reinsuring bothtax-exempt and taxable bonds for charter schools, as well as by establishing reservefunds for such bond deals. The funds also can be used to guarantee or insure leases forcharter schools and to help potential lenders with financing.
The funds that will be dispersed by the groups to charter schools are designed to beloans, not grants, so that the money can be recycled and used to enhance the credit ofmore deals in the future.
When the Department of Education launched the program last year it awarded $25 millioncollectively to five nonprofit organizations chosen from a pool of 33 applicants. Thefive are eligible to reapply.
Congress authorized funding for the program through the No Child Left Behind Act of2001. President Bush has asked Congress for $100 million for the program in fiscal year2004. The president had requested the same amount for this year, but Congress limitedthe grants to $25 million.
The grant application can be accessed on the Web at www.ed.gov/offices/OII/portfolio/facilities.html.
