What are the Terms / Interest Rates?
• The IDA merely acts as a “conduit” for the insurance of the Bonds. The IDA does not provide funds to an Applicant. Funds are provided by the bond purchaser. It is the responsibility of the Applicant to provide a purchaser for the IDAs Bonds, which, in many cases, will be a commercial bank or an investment banker. IDA Bonds are not a direct lending or government guarantee program. Applicants must secure a purchaser of the Bonds on the merits of the Project and the financial standing of the Applicant. The IDA is not responsible for making any payments on the Bonds from the IDAs own funds or assets. An Applicant receiving a commitment from a lender or underwriter to purchase the Bonds must negotiate the terms of the Bonds, including loan amount, maturity, and interest rate, with that lender or underwriter. Interest rates charged to finance the Project will be lower than conventional commercial rates because of the tax-exempt status of the interest on the Bonds.
