Bond Financing

MassDevelopment’s bond financing programs offer a cost-effective way to finance real estate and equipment. Lower rates and flexible terms keep you competitive, while providing a smart solution for the refinancing of debt.

Variable Rate Tracker for 501(c)(3) Borrowers

Infrastructure Financing

MassDevelopment offers three unique financing programs designed to support public infrastructure projects. The programs can be used independently, or in combination, and involve the establishment of an identified development/redevelopment district to finance infrastructure that will spur real estate development that may not otherwise occur.

  • Infrastructure Investment Incentive Program (I-Cubed)
    • Public-Private partnership to support approved development projects with major infrastructure needs in the range of $5 million to $50 million.
    • Administered by the Secretary of Administration and Finance and the Commissioner of the Department of Revenue in partnership with MassDevelopment.
    • Once development is complete, debt service is paid by the Commonwealth from new state tax revenue generated from job creation and other economic activity from the project.
  • District Improvement Financing (DIF)
    • Known as Tax Increment Financing (TIF) in other states.
    • Using new property tax revenues collected from a predefined geographic area to pay infrastructure project costs through a bond or pay-as-you go.
    • Incremental property taxes from new growth in a district used to create infrastructure investment.
    • Bonds can be issued by the municipality or MassDevelopment on behalf of the district.
  • Local Infrastructure Development Program (23-L)
    • Special assessment financing for infrastructure improvements.
    • Landowners in benefited district pay bond debt service through special assessments on parcels that stay in place if property is sold.
    • Shifts burden for infrastructure to private sector; landowner consent needed.
    • Bonds can be issued by MassDevelopment on behalf of the district.

Eligible Infrastructure

  • Roadways and intersections
  • Water and wastewater facilities and related lines
  • Transportation facilities such as train stations, bus depots, etc.
  • Seawalls, docks, wharves, bridges, culverts, and tunnels
  • Streetscape, sidewalks, electric lines, and street lights
  • Parks, playgrounds and recreational facilities
  • Parking garages
  • Brownfield mitigation
  • Site acquisition, demolition and site pad development
  • Soft and financing costs (engineering, architectural, etc.)

Infrastructure financed can be located in or be supporting development in the district. It must be publicly owned upon completion.


For more information, contact:

John Markowitz
Vice President, Infrastructure Finance
Office:  617-330-2085

Pooled Financing

Pool Loans are available to eligible nonprofit institutions, and have the advantage of offering a low, tax-exempt interest rate without the costly and time-consuming process of completing a stand-alone bond issuance.

Funds are assigned on a first-come, first-serve basis. Participating banks that team up with MassDevelopment to provide letters of credit support for the bond offering have the final approval subject to previously established credit criteria and other customary terms and conditions.


The STAR Fund was created to provide participants with a convenient method of pooling cash and proceeds of bonds, notes or other obligations for temporary investment, pending their expenditure.

MassDevelopment STAR Fund’s Rating is AAAm.*

On August 5, 2011, Standard & Poor’s (S&P) downgraded the rating of the United States to AA+, its second highest rating, and affirmed a rating of A-1+, its highest short-term rating, on short-term obligations of the United States. These ratings apply also to the Federal Reserve System and the Federal Reserve Bank of New York.

The STAR Fund’s AAAm rating by S&P was not affected by this action. There has been no indication from S&P that funds like STAR would be put under review as a result of the downgrade. We believe the STAR Fund’s holdings are consistent with the requirements for an AAAm rating.

*Standard & Poor’s fund ratings are based on analysis of credit quality, market price exposure, and management. According to Standard & Poor’s rating criteria, the AAAm rating signifies excellent safety of invested principal and a superior capacity to maintain a $1.00 per share net asset value. However, it should be understood that the rating is neither a “market” rating nor a recommendation to buy, hold or sell the securities. For a full description on rating methodology, visit Standard & Poor’s website.

To learn more about the STAR Fund, you can view and/or download the following documents and forms:

This information is for institutional investor use only, not for further distribution to retail investors, and does not represent an offer to sell or a solicitation of an offer to buy or sell any fund or other security. Shares of the Fund are distributed by PFM Fund Distributors, Inc., member Financial Industry Regulatory Authority (FINRA) ( and Securities Investor Protection Corporation (SIPC) ( PFM Fund Distributors, Inc. is a wholly owned subsidiary of PFM Asset Management LLC.

Although the Fund will seek to invest wisely, all investments involve risks. While the Fund seeks to maintain a stable net asset value of $1.00 per share, it is possible to lose money investing in the Fund. Investors should consider the Fund’s investment objectives, risks, charges and expenses before investing in the Fund. This and other information about the Fund are available in the Fund’s Information Statement. Copies of the Fund’s Information Statement may be obtained by calling 800-937-2736 or are available on the MassDevelopment website.

Tax-Exempt Bonds

Exempt from federal taxes and in certain cases state taxes, tax-exempt bonds are usually the lowest interest rate option for real estate projects and new equipment purchases.  Tax-exempt bonds can be sold in the capital markets or directly to your bank or another financial institution.

Projects eligible for tax-exempt financing include:

  • 501(c)3 nonprofit real estate and equipment
  • Affordable rental housing
  • Assisted living and long-term care facilities
  • Public infrastructure projects
  • Manufacturing facilities and equipment
  • Municipal and governmental projects
  • Solid waste recovery and recycling projects




Taxable Bonds

MassDevelopment can issue taxable bonds for industrial and commercial real estate.  Taxable bonds are often used as a “tail” in a tax-exempt financing if the borrower organization’s needs exceed its eligibility to issue tax-exempt bonds for a particular project.

Value Lease

Similar to an installment loan, a tax-exempt Value Lease is appropriate for all types of equipment purchases of $500,000 and up, or to fund renovation and installation costs that may be part of a project, up to 20% of the overall financed amount. A Value Lease offers interest rates that may be 2% to 4% below taxable rates, providing substantial savings. In addition to equipment purchases, smaller items such as automobiles, computers, or patient-room television systems can be financed (as long as the smaller items are part of an overall project).