Tax-exempt bond financing provides access to lower-cost capital, often resulting in reduced interest rates and improved project economics.

It offers flexible structuring and long-term financing options, making it well-suited for complex developments and layered capital stacks.

The result is a more efficient capital structure—helping projects pencil, scale, and deliver greater community impact.

1. Contact our team to determine the feasibility and fit for bond financing.

2. Assemble your financing team prior to submitting an application. We can provide referrals if needed.  

3. Download and complete the application linked above.

4. The application will be presented to the Tucson IDA Board of Directors, who will consider preliminary approval of the bond issuance.

5. If required by statute, the Tucson IDA will facilitate a Public Hearing, called a TEFRA.

6. City of Tucson Mayor and Council will consider the approval of the Tucson IDA bond proceedings. 

7. Bonds are sold and the project gets funded.

A successful bond financing requires a coordinated team of experienced professionals. At a minimum, borrowers should have their primary financing structure identified, along with key partners who will help bring the transaction to market.

Typical members of the financing team include:

• Borrower / Developer – Leads the project and is responsible for repayment of the bonds

• Senior Lender or Capital Partner – Provides primary financing and helps anchor the capital stack

• Underwriter or Placement Agent – Structures, markets, and sells the bonds to investors

• Bond Counsel – Provides the legal opinion and ensures the bonds meet all federal tax and regulatory requirements
  

The Tucson IDA also brings key partners to support the transaction:

• Issuer (Tucson IDA) – Serves as the conduit issuer and facilitates the bond process

• Issuer’s Counsel – Represents the IDA and ensures compliance with state and local requirements

• Municipal Advisor – Provides independent financial guidance to the IDA to ensure a sound and transparent financing structure
  

We work closely with your team throughout the process and can help you identify qualified professionals if needed.

The Tucson IDA can issue both taxable and tax-exempt bonds. Tax-exempt bonds are available for projects that meet specific federal requirements and deliver a clear public benefit. The most common qualifying projects include affordable housing, nonprofit facilities (such as healthcare, education, and community services), and certain manufacturing and infrastructure projects.

Eligibility depends on factors such as the type of borrower, the use of proceeds, and how the project serves the community. For example, 501(c)(3) nonprofit organizations may qualify for tax-exempt financing, and certain private developments—like affordable multifamily housing—may qualify under federal volume cap programs.

Because each project is unique, we encourage early conversations. Our team can quickly assess eligibility and help determine the most effective financing approach.

The Tucson IDA’s fee structure is designed to be transparent, competitive, and aligned with successful project delivery.

• Application Fee: $3,000 (due at submission)

• Issuance Fee: 0.15% (15 basis points) of the bond amount, capped at $50,000 (paid at closing)

• Annual Issuer Fee: 0.05% (5 basis points) on the outstanding bond balance

For borrowers who prefer to simplify ongoing administration, we offer the option to prepay annual issuer fees at closing at a discounted rate.

In addition to issuer fees, borrowers are responsible for customary third-party transaction costs, including bond counsel, underwriter or placement agent, municipal advisor, and other professional services.

We are happy to provide a detailed estimate of total financing costs early in the process so you can underwrite your project with confidence.