Charter School Lending

Financing Guidelines

TRF’s financing will be subject to all terms and conditions typically required by TRF for charter school facility projects, as well as ones unique to a particular transaction. The terms presented below are typical of TRF’s financing but vary according to specific project and borrower circumstances and the availability of TRF’s capital for special lending programs.

Charter School Location:	Pennsylvania, New Jersey, Maryland, Delaware and Washington, DC Predominantly in low-income communities or serving a low-income population with a majority of students eligible for free or reduced-price lunch
Uses:	Predevelopment Acquisition Construction/Renovation Leasehold Improvements Energy-Efficient Improvements Permanent
Amount:	Up to $4,500,000 or more Determined by the cost of the project, the availability of collateral, the borrower’s financial history and the borrower’s ability to repay
Rate:	Varies by product and term
Term:	Predevelopment, acquisition or construction loans: Up to 12 months Permanent loans: 5 to 15 years; amortizations up to 25 years Leasehold improvement loans: Loan term not to exceed term of lease
Advances:	Construction advances for work-in-place as verified by a TRF inspector, subject to 10% retainage
Collateral:	Mortgage or leasehold mortgage Security interest in personal property Guarantee from another creditworthy entity
Repayment:	Interest only during predevelopment and construction, with committed permanent take-out Permanent loans may require balloon payment at maturity
Fees:	1% for construction; 1% for permanent Borrower pays all of TRF's costs in closing the transaction, including, but not limited to, outside legal costs, recording fees, search fees, title insurance, appraisal fees, plan review, inspection costs, environmental assessments and technical assessments of the school’s educational performance and satisfaction of its charter requirements

Loan Criteria

TRF will underwrite and structure a loan by considering the strength of the charter school, borrower and project, as evidenced by the following:

Strong financial condition of charter school, borrower and, if applicable, guarantor
Good financial systems and reports
Management experience and depth
Favorable analysis of relationship with EMO or business services provider, if applicable
Loan to value ratio < 90%, based on satisfactory appraisal
Loan to project cost < 90%, for leasehold improvements
Debt service coverage ratio > 1.2x for five to ten year operating projections
Stable enrollment at projected levels
Evidence of positive student performance and the school’s compliance with its charter requirements

TRF Energy

TRF Energy helps organizations reduce their energy costs through financing for energy efficiency improvements and energy conversation practices. Learn more about TRF Energy lending guidelines or review TRF Energy’s Eligible Building Measures.

For more information

To learn more about TRF’s charter school lending, call Sara Vernon Sterman at 215-574-5800 or email CommunityFacilities@trfund.com.