Frequently Asked Questions
Municipal Loans

A: Applications are continuously accepted for IBank direct municipal loans. There are no application windows.

A: Interest rates are based on the MMD Index plus a credit spread. Borrowers and projects may qualify for environmental and/or community-based subsidies to be applied at the discretion of IBank. The interest rate will be locked for a period of 90 days following approval by the IBank Board of Directors (Rate Lock Period). After the Rate Lock Period, and up until IBank’s financing commitment expires, the interest rate may be reset at the discretion of IBank’s Credit Review Committee. Interest rates are capped at the AAA rating.

A: Our pre-application process takes approximately 6-8 weeks.  This includes preliminary review and underwriting If invited to apply, it takes approximately 4-6 weeks before  the IBank Board of Directors votes on approval. Once the board approves the loan, it takes approximately 4-8 weeks to finalize loan documents and disburse the funding.

A: The origination fee is a one-time fee of the greater of $25,000.00 or 1.00% of the borrowed amount.

A: Yes, the origination fee can be included in the loan amount. (The origination fee is calculated on the total amount borrowed including the origination fee.)        

A: No, per statute, IBank’s Infrastructure State Revolving Fund loans cannot be used for housing. However, housing-related infrastructure on publicly owned land is eligible. For example, water and wastewater system connections to the housing development, roads, streetlights etc. around the homes are eligible projects.

A: Yes, IBank offers technical support for the application process. Our loan officers are available through the application and approval process to answer questions and provide clarifications.

A: No matching funds are required. IBank’s municipal infrastructure financing may serve as matching funds for other financing.

A: No, there are no requirements associated with “Buy American” or the Bacon Davis Act.

Work performed must meet Prevailing Wages and Contractor Pre-Qualification per Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

Applicants must provide evidence that they have applied for and/or received all permits or approvals, if appropriate for the type of financing being considered, for the construction of the project.

A: Project costs are reimbursable if the costs were incurred following the signing of the financing agreement. Preliminary soft costs and hard costs incurred prior to the signing of the financing agreement are eligible for reimbursement if there is a reimbursable resolution in place. Eligible costs include engineering, design, permits etc., all or any part of the cost of construction, renovation, and acquisition of all lands, structures, real or personal property. Consulting fees are eligible costs.

A: IBank may consider financing up to 100% of the eligible project costs. The Infrastructure State Revolving Fund program does not require equity contribution from the borrower.

A: Acceptable collateral will depend on the repayment source. Enterprise Fund projects are secured by a pledge on revenues of the fund. If the project repayment comes from the General Fund, then IBank can do a lease-lease back financing structure. The leased asset can be the project itself or any other real property asset that is owned free and clear by the applicant.

A: No prepayment is permitted for the first 10 years of the loan, but borrowers may prepay all or a portion of the outstanding principal amount at any time after the first 10 years of the loan term.

A: IBank collects two payments a year; February is an interest-only payment. August is interest, principle, and the annual fee. The date of funding will determine which payment will be the first payment collected. Borrowers can capitalize interest.

A: This is situational. IBank typically does not allow for a refinance of debt unless there is an additional project connected with the transaction and refinancing the debt improves the cash flow of the transaction.  

A: There is no set limit to reimbursement requests. However, due to the amount of documentation required for each submission, we prefer requests that are made once a month. Reimbursement turn times are one to two weeks.

A: Projects ideally would be shovel-ready and need funds in 6 to 12 months.

A: IBank will disburse 100% of the funds to a third-party (trustee)- bank at the time of funding.

A: IBank can finance projects for up to 30 years; however, we cannot commit to a term longer than the useful life of the project. 

A: Reimbursements average one to two weeks after receipt of all required documentation. A borrower may submit one request or many. However, if the reimbursement requested is for a construction contract that has not been completed, IBank is required to withhold 5% on each invoice submitted until such time as the project and/or component is complete and a notice of completion has been recorded.   

A: Interest accrues on the entire loan amount when the financing agreement is executed; however, the borrower also earns interest income on the loan funds that have not as yet been disbursed.

A: There are many benefits of working with IBank.

1. With IBank, you save time — We conduct a preliminary review and provide feedback before inviting you to apply.
2. We provide technical assistance. Our loan officers will work with directly you to answer questions on all aspects of your project.
3. You can receive 100% financing (or have multiple sources of funding for your project — e.g., grants, borrower reserves, etc.)
4. We offer you low-, competitive, fixed-interest rates for up to 30 years, depending on the useful life of the project.
5. We are AAA-rated, and our cost of funds tends to be lower. We pass those savings on to our borrowers.
6. Unlike many other government financing, with IBank, you don’t have to compete against others and there is no waitlist and no scoring mechanism. We offer first-come, first-served service.
7. You can submit applications at any time of the year. There are no application windows.
8. Our loans have no or low-reserve requirements.
9. We issue our own bonds to fund our loan program, so funds are always available.
10. With IBank, you get transparency every step of the way — no surprises.