MassDevelopment partners with banks throughout Massachusetts to help them offer the best financing terms possible to their borrowers. With a loan participation, tax-exempt bond purchase, letter of credit-backed bond issue, or guarantee, our services can help a banks’ clients obtain financing for real estate projects and/or equipment purchases.
By purchasing a tax-exempt bond issued by MassDevelopment, a bank can offer lower interest rates to its borrowers without sacrificing credit quality or returns to the institution. For banks, the bond direct purchase process is similar to making a loan; the bank underwrites the deal, sets the terms, and manages the borrower relationship. MassDevelopment acts as a conduit, capitalizing the bank loan with the proceeds from the bank’s purchase of the tax-exempt bond.
Borrowers who do not have an investment grade rating can fund projects in the capital markets by having a bank issue a letter of credit to provide credit enhancement to the investors. Under MassDevelopment’s Federal Home Loan Bank (FHLB) Program, banks that are members of the FHLB can have their letters of credit confirmed by FHLB, enabling the bond to receive a AAA bond rating and lower rates.
MassDevelopment can lend up to $5,000,000 for real estate projects and up to $2,000,000 for equipment purchases as part of a larger loan with another lending institution.
MassDevelopment’s mortgage insurance guarantee enables a bank to lend the difference between its maximum loan-to-value and up to 90 percent loan-to-value on real estate. Mortgage insurance guarantees are available up to $2,000,000 for real estate loans and tax-exempt bonds.
The Brownfields Redevelopment Fund provides financing up to $100,000 for entities to undertake environmental site assessment of brownfields properties located in Economically Distressed Areas (EDAs) of Massachusetts; and loans with flexible terms up to $500,000 to clean-up contaminated sites.
Charter school loan guarantees can guarantee a portion of a bank loan or tax-exempt bond for acquisition, construction, or renovation of an owned or leased charter school facility. The guarantee enables the private lender to advance up to 100% financing for a school-owned building and 90% financing for a leased building.
Predevelopment loans are low interest rate loans up to $100,000 with deferred interest payment terms to finance certain predevelopment costs associated with real estate projects.
MassDevelopment provides real estate, equipment, and working capital loans and guarantees to emerging technology companies that are starting-up or expanding their manufacturing facilities in Massachusetts.
TechDollar loans provide 100% financing for technology equipment purchases and installation by nonprofit 501(c)3 organizations. Interest rates are our lowest.
MassDevelopment’s newest guaranty product allows banks to make larger working capital loans to manufacturing companies than they would normally make under their existing advance rates.