Typical steps of the bond financing process:
- The party seeking financing obtains an tax-exempt financing application. After completing the application, the applicant submits the form, together with the application fee, to NIFA. The application is reviewed by NIFA legal counsel to determine if the proposed project qualifies as an eligible project to be financed under the NIFA Act.
- NIFA staff reviews the application to determine if NIFA program requirements are met. If so, the application is forwarded to the NIFA Board of Directors.
- The NIFA Board of Directors considers the application at its bi-monthly meeting. If the project meets NIFA requirements, the NIFA Board will consider the adoption of an Intent Resolution. This is not final approval and does not bind NIFA to issue bonds. Those costs incurred more than 60 days prior to this Intent Resolution will not qualify for tax-exempt financing.
- The applicant contacts a financial institution or an underwriter and makes arrangements for the structuring sale and purchase of the tax-exempt bonds. If the bonds are privately placed with a financial institution, NIFA requires than an Investor Letter be executed. The applicant must contact and hire bond counsel to draft the necessary documentation for the financing. All documents must be submitted to NIFA's legal counsel at least four weeks prior to the final Bond Resolution date and to the NIFA office by the first day of the month for which approval is requested.
- An allocation from the State Bond Volume Cap must be obtained for each project that constitutes a "private activity bond", using the Private Activity Volume Cap Allocation Application. The State Bond Volume Cap resource is limited by federal law. Allocations from specific categories may, at times, be unavailable. NIFA has established Industrial Development Bond (IDB) Private Activity Cap Guidelines.
- When documentation and all terms of the bond issue are finalized, the applicant may request final approval from the NIFA Board. Prior to giving final approval, NIFA must hold a Public Hearing on the project. Publicized notice of the Public Hearing must be given by NIFA at least 14 days prior to the hearing. The Public Hearing and final Bond Resolution may occur at the same NIFA meeting. NIFA may then approve a final Bond Resolution.
- After adoption of the Bond Resolution, the parties proceed to execute documents and close the bond issue.
- All costs in connection with the financing are the responsibility of the applicant. NIFA fees are as follows:
- Application Fee---a non-refundable fee of 1/16 of 1% of the bond amount with a $1,000 minimum, to be applied to the issuance fee if the bond issue closes.
- NIFA Issuance Fee---1/8 of 1% of the bond amount with a $1,000 minimum.
- NIFA Legal Counsel Fee---although the amount varies, it usually includes normal hourly rates plus disbursements.
- Assumption Fee---1/8 of 1% of outstanding bond balance with a $1,000 minimum.
- Bond Allocation Fee---$150.