Self-Help is a community financial institution that was founded in 1980 and provides direct financing to charter schools. Self-Help will use its $2.2 million grant to expand and improve its Charter School Loan Fund. It will fund a credit enhancement reserve account that will be critical to expanding Self-Help's lending to charter schools. The grant will help create a self-sustaining loan pool that will revolve for new charter schools for years to come. It will allow Self-Help to leverage $22 million in public and private project funding to approximately 7 schools over the next 14 years.

Self-Help offers charter schools construction loans, permanent loans, and "mini-perm" loans as a bridge to bond financing. Loan proceeds may be used for acquisition, renovation and construction of facilities, soft costs such as architectural fees, transactional costs, and equipment.

Seventy-five percent of the funding of Self-Help's loan pool will be in the form of New Markets Tax Credit investments. The balance of funding, 25 percent, will be from other Self-Help resources from funders and/or retained earnings.

Self-Help will continue to meet the programs goals it committed to under the 2003 grant. These goals are to

• focus lending in southern communities that need quality school choices for families;
• rovide technical assistance to borrowers and others in the industry;
• pursue development of a secondary market for charter school loans; and
• help ensure high educational performance among our borrower schools while developing a tool to help other lenders do the same.

In 2006, Self-Help will expand on these existing goals to

• reach out to schools located in additional states with strong charter school environments;
• leverage new and existing relationships and partnerships to connect borrowers to other third-party supporters and financiers who can help schools build capacity; and
• create a new "mini-perm" loan product designed to enable start-up schools to obtain initial financing from Self-Help and then, with Self-Help's technical assistance, to transition into cost-efficient tax-exempt bond markets once operations stabilize and the schools learn more about the market for debt financing.

The Charter School Development Corporation (CSDC) is non-profit whose mission is to promote high quality competition and choice in K-12 education by assisting charter schools with the acquisition and financing of educational facilities appropriate to the school's mission, design, student population and enrollment.

CSDC will use its $6.6 million grant over a broad geographic area to leverage approximately $55 million in additional or "new" private sector financing for charter school facilities. CSDC proposes to expand on the success of its current model by using up to two-thirds of the $6.6 million in new grant funding to continue to provide third-party credit enhancements and partial guarantees of charter school facility leases and loan repayment obligations, and up to one-third to expand its own non-profit real estate development activities. CSDC's real estate development activity helps its client schools access and leverage capital financing to cover 100% of the cost of owning and renovating or improving-to-suit a facility through a leasehold improvement or mortgage loan which CSDC, on behalf of the client school, partially guarantees, either by depositing or pledging credit enhancement funds to the lender.

CSDC will modify its current programs and activities to give more emphasis to

• assisting start-up charter schools with leasehold acquisitions and improvements;
• increasing the number of charter schools and expanding public school choice in selected jurisdictions/communities with a significant number of under-performing traditional schools pursuant to the provisions of No Child Left Behind;
• charter schools in states with strong charter school laws;
• transactions that leverage CSDC's $40 million New Markets Tax Credit allocation; and
• exploring the concept of credit enhancing and cross-collateralizing pools of charter school loans and/or leases to achieve maximum liquidity and leverage.

Charter schools interested in participating in CSDC's program are encouraged to work with their local lender or underwriter to obtain a tentative loan commitment that requires credit enhancement. For those charter schools that do not have an interested lender, or even a project plan or financing package, CSDC can help by referring the schools to its strategic banking and real estate partners.

New Jersey Community Capital, a community development financial institution, is a registered trade name of the Community Loan Fund of New Jersey, Inc. It will use the $8.15 million Credit Enhancement for Charter School Facilities grant to credit enhance start-up leases, acquisition and construction loans, and permanent mortgage financing necessary for the commencement or continuation of the operation of charter schools in New Jersey. It also intends to credit enhance permanent mortgage financing nationally. The Federal grant will leverage nearly $90 million in private sector financing from an array of private sector sources, including banks, insurance companies, community development financial institutions and pension funds.

The Credit Enhancement Program will enable new and existing charter schools to negotiate with potential developers, landlords and financing entities in order to secure and/or renovate suitable facility space. The credit enhancement funds will enable New Jersey Community Capital to provide the requisite assurances that private lenders need in order to venture into the perceived risky business of financing charter schools.

New Jersey Community Capital will award and target services under this credit enhancement program to charter schools located in communities where the public schools have been identified for improvement, corrective action, or restructuring under Title I of the Elementary and Secondary Education Act. Of the State's 55 charter schools, New Jersey Community Capital has identified a pool of approximately 20 charter schools in impoverished school districts that will most likely have critical facility needs within the next five years.

New Jersey Community Capital also intends to focus a portion of its credit enhancement program on charter school operating nationally. It anticipates partnering with Prudential Financial, Inc. and the Community Reinvestment Fund of Minnesota in order to make credit enhancements for the permanent mortgage loans associated with a charter school's facilities available on a national scale.

The KIPP Foundation is a national non-profit charter school leadership development organization. The KIPP Foundation has a real estate unit and has previously provided facility financing to charter schools both directly and indirectly. With the grant award of $6.8 million, the KIPP Foundation proposes the KIPP Credit Enhancement Program (KCEP) with the strategic objective of increasing and sustaining the number of KIPP and Affiliate schools by financing improved school facilities. The grant from the Credit Enhancement for Charter School Facilities program and a 10 percent match from the D&DF Foundation will fund KCEP. The grant will leverage approximately $34 million of construction loans, permanent loans, leasehold guarantees, letters of credit, tax-exempt bonds, and a host of other leveraged financing sources. On average, financing will be leveraged at a ratio of 5:1; representing a leverage range of up to 4:1 for leased properties and a range of up to 7:1 for owned properties.

KCEP will secure low-interest financing from local and national construction lenders and permanent take-out financing from Prudential Financial Social Investments. This will address the financing needs of growing schools in securing affordable permanent space, particularly in districts without available credit enhancement programs, or where such programs are oversubscribed.

The two primary goals of KCEP are to

• increase direct private sector financing for charter school facilities and
• help grow high-quality, high-achieving charter schools through resolution of their facility issues.

The secondary goals of KCEP are to

• attract new private capital to the charter school industry;
• demonstrate to private capital markets the credit worthiness of charter schools;
• build a sustainable, national model for charter school facilities finance;
• assist charter schools in becoming more financially sustainable;
• establish a sustainable guarantee program to serve the financing needs of charter schools; and
• provide quick, affordable real estate capital to charter schools.

The Local Initiatives Support Corporation (LISC) will use its $8.2 million Credit Enhancement for Charter School Facilities grant to support the development and expansion of charter schools through a variety of programs being created and expanded by its Educational Facilities Financing Center (EFFC). The grant will be used to facilitate 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.

The grant funds will be used to create the Credit Enhancement Program II (CEP II), a program complimentary to the Credit Enhancement Program I that was created with LISC's original Credit Enhancement for Charter School Facilities grant. CEP II proposes to capitalize a National Credit Enhancement Fund (NCEF) with its Credit Enhancement for Charter School Facilities Program grant funds and a one-third pro rata matching commitment of up to $2.7 million from LISC's own balance sheet.

The NCEF will leverage commitments from local, regional, and national providers of credit enhancement to create or expand Local Credit Enhancement Funds (LCEF). Each LCEF will be specifically tailored to address the needs of the charter schools in its market depending upon charter school need, local funder interest, and the public policy platform. In each of the five markets, LISC will commit funds from the NCEF and match it to a one-to-one basis with credit enhancement commitments from local partners.

On average, these LCEFs will offer 30 percent credit enhancement on loans to charter schools in specific markets. Based on an assumed loan size of $1.8 million, LISC's CEP II will leverage approximately $73 million in financing for the renovation, creation or acquisition of approximately 41 charter schools before recycling its funds.

The Raza Development Fund (RDF) project was created in association with the National Council of La Raza (NCLR). This project has its origins in the "Partnership of Hope," a community empowerment and development model that was launched by RDF and NCLR in 1997.

NCLR was established in 1968 and is the largest constituency-based national Hispanic organization in the United States. Two of its programmatic priorities are community development and closing the educational achievement gap for Latinos. RDF is a support corporation of NCLR. RDF was established in 1998 and is the largest Latino Community Development Financial Institution in the United States. The mission of RDF is to provide for the investment of reasonably priced capital into the Latino community for the purpose of stimulating economic and community development. RDF places a special focus on facilities acquisition and financing to house alternative education programs and community-based charter schools.

The RDF program provides credit enhancements and other forms of financing assistance to charter schools as both a lead and subordinate lender. RDF will serve both new and established schools. RDF's funding priorities will be schools that serve low income, minority, and Latino students and neighborhoods with a transitioning population. A key element of RDF's program is its emphasis on academic rigor and due diligence on educational performance. U.S. Department of Education funds will be used to (1) guarantee charter school lease obligations, including leasehold improvement loans; (2) provide subordinate debt as a credit enhancement to consortia lenders and public education districts; (3) guarantee all or a portion of the direct lending activities of RDF; and (4) guarantee bonds on behalf of charter schools.