Service Area: Institutional Service
Program Type: Loans
Also Known As: HBCU Capital Financing
Program Description
The goal of the program is to provide low-cost capital to finance improvements to the infrastructure of the nation's historically black colleges and universities (HBCUs). Specifically, the program provides HBCUs with access to capital financing or refinancing for the repair, renovation, and construction of classrooms, libraries, laboratories, dormitories, instructional equipment, and research instrumentation. The program's authorizing statute caps the total amount of loans and accrued interest available through the program at $1.1 billion. However, the program can exceed $1.1 billion if Congress provides for the program to do so in an appropriation bill.
This assistance comes through the issuance of federal guarantees on the full payment of principal and interest on qualified bonds, the proceeds of which are used for loans.
Types of Projects
The loan proceeds of the HBCU Capital Financing Program can be used for repair, renovation or, in exceptional circumstances, the construction or acquisition of --
- Any classroom facility, library, laboratory facility, dormitory (including dining facilities) or other facility customarily used by colleges and universities for instructional or research purposes or for housing students, faculty, and staff;
- A facility for the administration of an educational program, or a student center or student union, except that not more than five percent of the loan proceeds provided under this part may be used for the facility, center, or union if the facility, center or union is owned, leased, managed, or operated by a private business that, in return for such use, makes a payment to the eligible institution;
- Instructional equipment technology, research instrumentation, and any capital equipment or fixture related to facilities described in subparagraph (A);
- A maintenance, storage, or utility facility that is essential to the operation of a facility, a library, a dormitory, equipment, instrumentation, a fixture, real property or an interest therein, described in this paragraph;
- A facility designed to provide primarily outpatient health care for students or faculty;
- Physical infrastructure essential to support the projects authorized under this paragraph, including roads, sewer and drainage systems, and water, power, lighting, telecommunications, and other utilities;
- Any other facility, equipment, or fixture which is essential to the maintaining of accreditation of the member institution by an accrediting agency or association recognized by the Secretary under Subpart 2 of Part H of Title IV.
Who May Apply: (by category) Institutions of Higher Education (IHEs)
Who May Apply: (specifically) Only eligible institutions designated by the Secretary of Education as Historically Black Colleges and Universities (HBCUs) are eligible to borrow from this program. An eligible institution is a Title III Part B institution as defined in Section 322(2) of the Higher Education Act of 1965 (HEA).
Section 322(a) of the Higher Education Act of 1965, as amended (HEA), defines an HBCU as "... any historically black college or university that was established prior to 1964, whose principal mission was, and is, the education of Black Americans, and that is accredited by a nationally recognized accrediting agency or association determined by the Secretary to be a reliable authority as to the quality of training offered or is, according to such an agency or association, making reasonable progress toward accreditation...."
It is important to note that an institution does not receive a loan by only being a HBCU. The HBCU must meet credit criteria such as showing the ability to repay all of its debts based on financial analysis, providing enough collateral for the loan it seeks, and meeting loan and bond covenants.
For application packages, contact:
Rice Capital Access Program, LLC
Will Fisher
One Atlantic Center
1202 West Peachtree Street NW, 23rd Floor
Atlanta, Georgia 30309
Telephone: (404) 736-3628
Fax: (212) 908-9299
Web site: http://www.ricecapitalaccess.net/
The Department has statutory authority to guarantee bonds for up to $1.1 billion (no more than $733,333,333 must be used for private HBCUs and no more than $366,666,667 will be used for public HBCUs). Currently, the HBCU Capital Financing Program's outstanding balance is about $1.2 billion ($488 million attributed to public HBCUs and $736 million attributed to private HBCUs). The outstanding interest and principal cannot exceed $1.1 billion. Congress has provided authority, in an appropriations bill, to exceed the statutory limit and to make loans to public and private HBCUs without considering if an HBCU is public or private.
The remaining amount of funds available to lend in any year is determined by annual Congressional appropriations and that amount can vary. For Fiscal Year 2024, Congress provided $20,150 million in subsidy to make $377 million in new loans.
Loan Transactions
To date, the Historically Black College and University (HBCU) Capital Financing Loan Program has originated 137 loans to 52 HBCUs, including 16 public HBCUs and 36 private HBCUs. These colleges and universities have used their loan proceeds to refinance previous capital project loans, to renovate existing facilities, to build new facilities, or to achieve any combination of the three.
On December 27, 2020, the President signed into law the “Consolidated Appropriations Act, 2021 (Pub. L. 116-260) provides that the Secretary of Education repay, for each institution of higher education that is a participant in the HBCU Capital Financing Program, the institution’s outstanding balance of principal, interest, and fees on the disbursed loan amounts on closed loan agreements as of December 27, 2020. Through this Act, there were 75 loans discharged and 11 loans which remained.
Through repayments and refunding, there are currently 31 loans outstanding to 18 colleges and universities with loan amounts ranging from $6 million to $226.5 million. These institutions have received loans totaling approximately $1.48 billion. Public HBCUs have received about $645 million in loan proceeds and private HBCUs have received about $839 million in loan proceeds. There are 13 active construction projects.
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
|2010 | 2009 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1997 | 1996 |
2024
Alabama Agricultural and Mechanical University – September 2024 - $157,000,000
- Program loan:
- Construct new STEM building
- Construct new student amenities building
- 30-year fixed rate financing
Hampton University — June 2024 - $91,500,000
- Program loan:
- Finance various capital improvements
- Refinance debt
- 30-year fixed rate financing
Morehouse College — June 2024 - $11,500,000
- Program loan:
- Construct new student housing facility
- 30-year fixed rate financing
Florida Agricultural and Mechanical University — February 2024 - $97,500,000
- Program loan:
- Construct new student housing facility
- 30-year fixed rate financing
2023
Benedict College — November 2023 - $10,000,000
- Program loan:
- Campus wide energy performance upgrades
- 30-year fixed rate financing
Tuskegee University — November 2023 - $35,000,000
- Program loan:
- Renovate existing student housing facilities
- 30-year fixed rate financing
The University of the Virgin Islands — August 2023 - $29,000,000
- Program loan:
- Construct new medical academic facility
- Reconstruct existing research and performing arts facilities
- Purchase furniture, fixture, and equipment
- 30-year fixed rate financing
Morehouse College — February 2023 - $58,500,000
- Program loan:
- Construct new student center
- Various capital improvements
- 30-year fixed rate financing
Howard University — January 2023 - $226,500,000
- Program loan:
- Construct new STEM building
- 30-year fixed rate and variable rate financing
Virginia Union University — January 2023 - $19,500,000
- Program loan:
- Renovate existing student housing and academic facilities
- Various capital improvements
- Finance a portion of acquisition cost
- Refinance debt
- 30-year fixed rate and variable rate financing
2022
Morgan State University — December 2022 - $65,000,000
- Program loan:
- Renovate campus buildings and deferred maintenance
- 30-year fixed rate financing
Dillard University — October 2022 - $41,000,000
- Program loan:
- Construct new student housing facility
- 30-year fixed rate financing
Fisk University — August 2022 - $34,250,000
- Program loan:
- Construct new Health Services and Training Center
- Construct new student housing facility
- 30-year fixed rate financing
Meharry Medical College — March 2022 - $39,750,000
- Program loan:
- Construct new living learning center and parking facility
- 30-year fixed rate financing
2021
Miles College — October 2021 - $15,000,000
- Program loan:
- Refinance debt
- 20-year fixed rate financing
Southern University at Baton Rouge — September 2021 - $69,000,000
- Program loan:
- Construct new student center
- Construct new student housing facility
- 30-year fixed rate financing
Bethune-Cookman University — June 2021 - $108,000,000
- Program loan:
- Refinance debt
- Bring student housing on the institution's Balance Sheet
- Renovate existing student housing and academic facilities
- 30-year fixed rate financing
West Virginia State University — May 2021 - $40,500,000
- Program loan:
- Refinance debt
- Bring student housing on the institution's Balance Sheet
- 30-year fixed rate financing
2020
Morehouse School of Medicine — December 2020 - $12,500,000
- Program loan:
- Finance a portion to construct new Health & Wellness Center
- 25-year fixed rate financing
Morgan State University — October 2020 - $69,750,000
- Program loan:
- Refinance debt
- Construct new public safety facility and dining facility
- Renovate existing student housing and academic facilities
- Finance a portion to construct new 670-bed student housing facility
- 30-year fixed rate financing
Meharry Medical College — August 2020 - $48,500,000
- Program loan:
- Deferred campus maintenance
- Construct new living learning center and parking facility
- 20-year fixed rate for the deferred maintenance; 30-year fixed rate financing for the living Learning center
Xavier University of Louisiana — June 2020 - $100,000,000
- Program loan:
- Construct a 500-bed dormitory and a mechanical substation
- Deferred maintenance related to building systems (HVAC, electrical and plumbing) and buildings that house such facilities
- 25-year fixed rate financing for the housing facility; 20-year fixed rate for the deferred maintenance
2019
Johnson C. Smith University — December 2019 - $18,000,000
- Program loan:
- Refinance debt
- 15-year fixed rate financing
The University of the Virgin Islands — November 2019 - $47,000,000
- Program loan:
- Refinance debt
- Finance the cost of acquisition and create a Research and Technology Business Innovation Center
- Finance a portion to construct a new Research Center building and Medical Simulation Center building
- 30-year fixed rate financing
Florida Memorial University — October 2019 - $44,000,000
- Program loan:
- Refinance debt
- 30-year fixed rate financing
Alabama Agricultural and Mechanical University — September 2019 - $70,000,000
- Program loan:
- Construct new student center
- Renovations
- 30-year fixed rate financing
Florida Agricultural and Mechanical University — March 2019 - $125,700,000
- Program loan:
- Construct new student housing facility
- Refinance debt
- 30-year fixed rate financing
2018
Southern University at Baton Rouge — December 2018 - $27,000,000
- Program loan:
- Refinance debt
- 21-year fixed rate financing
Morgan State University — November 2018 - $25,000,000
- Program loan:
- Construct new public safety facility
- Refinance debt
- 30-year fixed rate financing
Morehouse College — June 2018 - $45,000,000
- Program loan:
- Refinance debt
- Renovate existing student housing and academic facilities
- 20-year fixed rate financing
Alabama State University — March 2018 - $152,000,000
- Program loan:
- Refinance debt
- 24-year fixed rate financing
2017
Morehouse School of Medicine — October 2017 - $27,500,000
- Program loan:
- Renovate and expand medical academic facility
- Refinance debt
- 30-year fixed rate financing
Southern University at Shreveport — September 2017 - $12,500,000
- Program loan:
- Refinance debt
- 22-year fixed rate financing
Tuskegee University — August 2017 - $28,000,000
- Program loan:
- Refinance debt
- 10-year fixed rate financing
2016
Grambling State University — November 2016 - $100,000,000
- Program loan:
- Refinance debt
- 30-year fixed rate financing
South Carolina State University — September 2016 - $36,600,000
- Program loan:
- Refinance debt
- 19-year fixed rate financing
Jarvis Christian College — July 2016 - $25,000,000
- Program loan:
- Construct new student housing facility
- Renovate existing student housing facilities
- Refinance debt
- 30-year fixed rate financing
2015
Livingstone College — December 2015 - $48,000,000
- Program loan:
- Construct new physical education academic facility and new addition to science building
- Refinance debt
- 30-year fixed rate financing
Alabama Agricultural and Mechanical University — September 2015 - $96,000,000
- Program loan:
- Construct new living learning center and renovate existing student housing facilities
- Refinance debt
- 30-year fixed rate financing
T.A. Lawson State Community College — July 2015 - $21,000,000
- Program loan:
- Construct new Academic Success Center and Automotive Training Center
- 30-year fixed rate financing
Philander Smith College — June 2015 - $14,727,000
- Program loan:
- Refinance debt
- 26-year fixed rate financing
The University of the Virgin Islands — February 2015 - $19,000,000
- Program loan:
- Construct new medical school building and simulation center
- 30-year fixed rate financing
2014
Arkansas Baptist College — December 2014 - $30,035,000
- Program loan:
- Refinancing debt
- 30-year fixed rate financing
Texas College — September 2014 - $19,000,000
- Program loan:
- New and renovated student housing facilities as well as a student activity center
- 30-year fixed rate financing
Johnson C. Smith University — August 2014 - $26,150,000
- Program loan:
- New Science Technology Engineering and Mathematics College and Research Center
- Refinancing of debt
- 30-year fixed rate financing
Voorhees College — June 2014 - $18,500,000
- Program loan:
- Refinance debt
- Renovation student housing
- Campus Center and other academic facilities
- 25-year fixed rate financing
Grambling State University — May 2014 - $7,500,000
- Program loan:
- Construct a Kinesiology, wellness, and student center
- 25-year fixed rate financing
St. Augustine's University — February 2014 - $23,000,000
- Program loan:
- Refinance debt
- 20-year fixed rate financing
2013
Morehouse College — September 2013 - $19,000,000
- Program loan:
- Refinance debt
- 20-year fixed rate financing
Philander Smith College — July 2013 - $10,900,000
- Program loan:
- Campus Center
- 30-year fixed rate financing
Benedict College — June 2013 - $56,000,000
- Program loan:
- Campus Center and other academic facilities
- 25-year average fixed rate financing
Claflin University — June 2013 - $30,000,000
- Program loan:
- Refinance debt
- New student housing and renovations
- 25-year average fixed rate financing
Hampton University — May 2013 - $60,065,000
- Program loan:
- Refinance debt
- 25-year fixed rate financing
Clark-Atlanta University — January 2013 - $14,025,000
- Program loan:
- Refinance debt
- 8-year fixed rate financing
2012
Stillman College — September 2012 - $40,000,000
- Program loan:
- Refinance debt
- 25-year fixed rate financing
Texas Southern University — September 2012 - $60,000,000
- Program loan:
- Construct new student housing
- 22-year fixed rate financing
Meharry Medical College — August 2012 - $60,000,000
- Program loan:
- Construct a student center
- Build new student housing
- Renovate campus buildings and deferred maintenance
- 30-year fixed rate financing
LeMoyne Owen College — July 2012 - $13,450,000
- Program loan:
- Finance the constructing of a new 336 bed suite-style living learning center
- 30-year fixed rate financing
Florida Memorial University — June 2012 - $16,060,000
- Program loan:
- Refinance debt
- Construction of a new wellness education center
- Construction of a new science annex building
- 30-year fixed rate financing
Virginia Union University — April 2012 - $17,000,000
- Program Loan used to construct a Living Learning Center
- 30-year fixed and variable rate financing
Huston Tillotson University — February 2012 - $17,850,000
- Program loan:
- Renovation of two dormitories,
- Other campus capital improvements, and
- Refinance of current debt.
- 30-year fixed rate financing
2011
Texas Southern University - September 2011 - $64,180,000
- Program loan:
- Refinanced of outstanding indebtedness
- 25-year fixed rate financing
University of the Virgin Islands - June 2011 - $60,000,000
- Program loan:
- Refinanced of outstanding indebtedness
- Financed new student housing facility
- Financed new laboratories, classrooms, and faculty offices
- Financed renovation campus facilities
- 30-year fixed rate financing
Wiley College - April 2011 - $24,400,000
- Program loan:
- Refinanced of outstanding indebtedness
- Financed new student housing facility
- Financed new science building
- Financed renovation student union and campus facilities
- 30-year fixed rate financing
2010
Wilberforce University - September 2010 - $24,552,000
- Program loan:
- Refinancing of outstanding indebtedness
- 25-year fixed rate financing
Tuskegee University — July 2010 - $68,000,000
- Program loan:
- Financed new student housing facility
- Financed new science building
- Financed renovation academic buildings and student housing facilities
- 30-year fixed rate financing
Bennett College for Women - June 2010 - $9,500,000
- Program loan:
- Refinancing of outstanding indebtedness
- 20-year fixed rate and variable rate financing
Harris Stowe State University — April 2010 - $17,315,000
- Program loan:
- Financed new student housing facility
- 30-year fixed rate financing
Lane College - March 2010 - $29,000,000
- Program loan:
- Refinancing of outstanding indebtedness
- 20-year fixed rate and variable rate financing
Shaw University - February 2010 - $30,100,000
- Program loan:
- Refinancing of outstanding indebtedness
- 20-year fixed rate financing
2009
Florida Memorial University - September 2009 - $28,000,000
- Program loan:
- Program financed new student housing facility
- Refinancing of outstanding indebtedness
- 30-year fixed rate financing
Bennett College for Women - September 2009 - $21,000,000
- Program Loan financed new student housing, academic buildings, and renovations
- 30-year fixed rate and variable rate financing
Talladega College - September 2009 - $12,000,000
- Program loan:
- Renovation of existing facilities
- Program financed new student housing facility
- Refinancing of outstanding indebtedness
- 30-year fixed rate financing
2007
Southern University at New Orleans - June 2007 - $44,000,000
- Program financed new student housing facility
- A pledge of net revenues of the Southern University of New Orleans Student Housing System
- 30-year variable rate financing capped at 1 percent
Tougaloo College - June 2007 - $28,560,000
- Program loan:
- Refinancing of outstanding indebtedness
- Renovation of existing facilities
- Modernization of campus facilities
- General obligation of the university, secured by mortgages, lien on all revenue
- 30-year variable rate financing capped at 1 percent
Xavier University - June 2007 - $165,000,000
- Program loan:
- Refinancing of outstanding indebtedness
- Renovation of existing facilities
- Reimbursement to borrower for eligible remediation and rehabilitation outlays
- General obligation of the university, secured by mortgages, lien on all revenue, portion of endowment
- 30-year variable rate financing capped at 1 percent
Dillard University - June 2007 - $160,000,000
- Program loan:
- Refinancing of outstanding indebtedness
- Renovation of existing facilities
- Construction of science and professional schools building
- Reimbursement to borrower for eligible remediation and rehabilitation outlays
- General obligation of the university, secured by mortgages, lien on all revenue, portion of endowment
- 30-year variable rate financing capped at 1 percent
Allen University - June 2007 - $19,000,000
- Program financed new student housing facility and residence hall improvements
- Secured by general obligation of the university on parity with existing creditors, net revenue pledge of entire student housing and a first mortgage on 5 buildings
- 30-year variable rate financing with a cap
Tuskegee University - May 2007 - $28,000,000
- Program loan:
- Renovation of existing facilities
- Modernization of campus facilities
- Revenue of mortgaged facilities
- General obligation of the university, secured by mortgages, lien on all revenue
- 30-year fixed rate financing
Clark-Atlanta University — May 2007 - $20,000,000
- Program loan:
- Renovation of existing facilities
- Modernization of campus facilities
- Secured by general obligation of the university, pledge of all revenue and mortgages
- 30-year fixed rate financing
2006
Harris Stowe State University - June 2006 - $15,500,000
- Program financed new student housing facility
- Secured all student housing revenue
- 30-year fixed rate financing
2005
South Carolina State University - June 2005 - $42,000,000
- Program financed new 780 bed student housing facility
- Also refinanced existing student housing revenue bonds
- Secured by net revenue pledge of entire student housing revenue system
- 30-year fixed rate financing
2004
Miles College - July 2004 - $7,835,000
- Program financed new men's dormitory
- Financing structured in conjunction with bank loan on other college projects, requiring management of inter-creditor issues, including security and parity debt
- Secured by general obligation of the college, lien on revenues of the student housing facility and mortgage
- 30-year fixed rate financing
Tuskegee University - February 2004 - $12,056,000
- Refinanced taxable bond issue used to finance the university's Kellogg Conference Center
- Provided substantial debt service savings which created ability to finance an additional $1.2 million of renovation projects
- Secured by general obligation of the university and a mortgage on the conference center
- Structured as 23-year financing with $2 million deferred principal variable rate financing
Shaw University - January 2004 - $10,015,000
- First loan structured on a 100 percent variable rate basis
- Program loan:
- Refinanced bond issue which had a balloon provision
- Refinanced a note on a satellite campus
- Refinanced an existing Department of Education mortgage
- Provided small amount of new money
- Secured by general obligation of the university, pledge of all revenues and mortgages
- 20-year variable rate financing
2003
Clark-Atlanta University - November 2003 - $23,905,000
- First financing to include a variable rate component
- Financing structured primarily to offer substantial debt service savings
- Secured by general obligation of the university, pledge of all revenue and mortgages
- Fixed rate loan portion structured consistent with term of refinanced bonds through 2015; variable rate loan portion amortizes through 2020
Livingstone College - November 2003 - $12,000,000 and November 2001 - $1,000,000
- Projects included:
- Refinancing ($7.00 million)
- Student housing renovation
- Administrative/classroom renovation
- General obligation of the college, secured by mortgage and lien on all revenues
- 17-year fixed rate on financing; 30 year fixed rate on new projects financing
2002
Virginia Union University - April 2002 - $8,218,000
- Loan included:
- Refinancing
- HVAC upgrades
- Building Renovations
- Loan secured by general obligation of the university, a first lien on revenues and a mortgage
- 30-year fixed rate financing
Tuskegee University - March 2002 - $23,875,000
- Provided financing for:
- Campus infrastructure projects
- Residence hall improvements
- Loan secured by general obligation of the university, a first lien on certain student housing revenues and mortgages
- 30-year fixed rate financing
2001
Bennett College - July 2001 - $8,700,000
- First financing completed by Commerce Capital Access Program Corporation
- Project included:
- Refinancing
- Storm drainage
- Network/telephone upgrades
- Roof repair
- General obligation of the college, secured by mortgage and lien on all revenue
- 30-year fixed rate financing
2000
Barber-Scotia College - December 2000 - $7,000,000
- Last financing completed by Eddie Mac
- Financed renovation of Faith Hall, a 23,000 square foot student housing facility
- General obligation of the college, secured by a mortgage and lien on all revenue
- 30-year fixed rate financing
1999
Lincoln University - October 1999 - $13,850,000
- Loan retired through a refinancing by Aaa/AAinsured tax-exempt bond issue in 2004
- Project included:
- Refinancing and renovation of the university's Urban Center in Philadelphia
- Deferred campus maintenance and computer software and hardware upgrades
- General obligation of the university, secured by a mortgage on the Urban Center
- 25-year fixed rate financing for the Urban Center; 15-year fixed rate for the deferred maintenance
Bethune-Cookman College - May 1999 - $15,500,000
- Project included:
- Student center
- Auditorium
- Mass communications building
- Loan secured by general obligation of the college, lien on all revenues and a mortgage
- 30-year fixed rate financing
Tougaloo College - May 1999 - $8,200,000
- Project included:
- Four new student housing facilities
- Furniture purchase
- Refinancing of lease for HVAC system
- Loan secured by general obligation of the college, pledge of net revenues of the financed dormitories and a mortgage
- 10-year fixed rate refinancing
- 30-year fixed rate new project financing
1997
Bethune-Cookman College - July 1997 - $4,795,000
- Provided financing for a new 200 bed student housing facility
- Loan secured by general obligation of the college, pledge of net revenues and covenant to maintain minimum level of unrestricted net assets equal to 150% of debt
- 30-year fixed rate financing
1996
West Virginia State College - September 1996 - $3,500,000
- First HBCU Program loan
- Program financed renovation of student housing
- Loan secured by pledge of net revenues and negative pledge on the student housing system
- 30-year fixed rate financing
| Legislation | Regulations | Guidance |
Legislation
The Higher Education Act (HEA) of 1965, as amended provides the statutory authority for the issuance of bonds and the Advisory board.
The link below provides the program statute:
Regulations
Guidance
The program is governed by an agreement between the Department of Education and the Designated Bonding Authority (DBA).
Program Performance Plan
Program performance plans describe the goals and intended outcomes of U.S. Department of Education programs and initiatives. Annual targets and strategies, along with measures for monitoring progress, are published in performance plans prior to each fiscal year. The plans also include actual performance data showing whether targets were met in previous years.
Don E. Watson, Executive Director
Executive Director and Designated Federal Official (DFO)
Email: donald.watson@ed.gov
Telephone: (202) 453-6166
Fax: (202) 401-8466
Mailing Address
U.S. Department of Education
Office of Postsecondary Education
HBCU Capital Financing Program
400 Maryland Avenue, S.W.
Washington, DC 20202
Frequently Asked Questions
 | Select a link below to jump to the relevant page section. |
- What is the U.S. Department of Education's Historically Black College and University (HBCU) Capital Financing Program?
- What is the Designated Bonding Authority (DBA)?
- Who is eligible to apply?
- How large can the loan be?
- What is the typical borrowing rate?
- My school has been unable to borrow in the tax-exempt market, would that prevent us from borrowing from the HBCU Capital Financing Program?
- Can my school get a better rate in the tax-exempt market?
- Can my school refinance high-interest loans for capital projects and equipment?
- Are there any other charges or fees that my school should be aware of?
- What happens if a school is unable to make its payments?
- Can my school prepay its HBCU Capital Financing Program loan?
- Can my school use HBCU Capital Financing Program with other programs?
- How long does it take to determine if my school is eligible for a loan?
- After my school submits the preliminary application, what's next?
- What can we do while our preliminary application and Decisional Memorandum are being reviewed?
- When will I know that my school has been approved for a loan through the HBCU Capital Financing Program?
- What are some things that delay the closing process?
- How long does it take to fund the loan?
1. What is the U.S. Department of Education's Historically Black College and University (HBCU) Capital Financing Program?
The U.S. Department of Education's Historically Black College and University (HBCU) Capital Financing Program is a loan program that was established to provide federal assistance to facilitate low-cost capital basis for Historically Black Colleges and Universities, which enables such colleges and universities to continue and expand their educational mission and enhance their significant role in American higher education.
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2. What is the Designated Bonding Authority (DBA)?
In 1994, the Higher Education Act of 1965, as amended (HEA) provided for a Designated Bonding Authority (DBA) to act as the Department's agent. The DBA and the Department work with your school to determine if your school has a qualified project that would be eligible for refinancing if the school has the necessary credit standing to qualify for a loan. The Department and the DBA established loan criteria, which includes, but is not limited to, your school's accreditation standing, Title IV eligibility, cohort default rates, enrollment, debt ratio, debt service coverage, and capital improvement plans. Provided the school has qualifying financials, the DBA could issue bonds for capital projects such as student housing, dining and instructional facilities, in addition to many other projects.
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3. Who is eligible to apply?
Any Historically Black College or University that was established prior to 1964, whose principal mission was and is the education of Black Americans is eligible to borrow from the HBCU Capital Financing Program.
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4. How large can the loan be?
Typically, the loan size is between $10 and $20 million. The loan can be for a larger amount with approval of the Department of Education.
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5. What is the typical borrowing rate?
The typical borrowing rate is approximately the U.S. Treasury rate.
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6. My school has been unable to borrow in the tax-exempt market, would that prevent us from borrowing from the HBCU Capital Financing Program?
Unlike the tax-exempt market, the rating agencies, insurers or investors do not make the decision. A school is only required to meet HBCU Capital Financing Program's minimum to qualify for a loan.
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7. Can my school get a better rate in the tax-exempt market?
It is possible to get better rates in the tax exempt market if the HBCU can access the municipal markets or if the school has or can get an investment grade credit rating or "AAA" bond insurance. However, we caution schools to look beyond the interest rate and look at the total cost of borrowing to determine the best effective rate of borrowing.
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8. Can my school refinance high-interest loans for capital projects and equipment?
Yes. The HBCU Capital Financing Program can refinance eligible projects. The interest rate will be approximately the U.S. Treasury rate.
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9. Are there any other charges or fees that my school should be aware of?
The HBCU Capital Financing Program charges an escrow fee that is equal to five percent of the outstanding principal of your HBCU Capital Financing. The escrow is available to the HBCU Capital Financing Program to pay principal and interest on the bonds in the event of any Program borrower' delinquency in loan repayment. Your escrow is return to you in an amount equal to any remaining portion of your school's deposit of loan proceeds following scheduled repayment of the delinquent school's loan.
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10. What happens if a school is unable to make its payments?
If a school is unable to make its payments, the school will default on its loan. Your escrow account and escrow accounts of other borrowers will be used to make the defaulted school's loan payments. The HBCU Capital Financing Program will seek to liquidate the collateral of the defaulted school, so that the escrow accounts are restored.
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11. Can my school prepay its HBCU Capital Financing Program loan?
If your school chooses a fixed rate loan, then there is a prepayment penalty. However, your school can lessen the affects of the prepayment penalty if it purchases a call option. A second option is a variable interest rate. In the case of a variable interest rate, your school can repay its loan every six months. If you are worried about uncertainty of interest rates, you can purchase a pricing cap.
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12. Can my school use HBCU Capital Financing Program with other programs?
We have reviewed programs such as those promoted by Honeywell, Johnson Controls and other vendors that offer technologies to reduce energy costs and other efficiency.
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13. How long does it take to determine if my school is eligible for a loan?
It takes about 30 minutes to fill out a brief preliminary application that reviews enrollment figures, operating revenue and expenses, and a brief project description. This review is completed before the school uses precious time and resources for the application process.
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14. After my school submits the preliminary application, what's next?
After your preliminary application and other requested materials are received, a Decisional Memorandum is prepared and reviewed by the Department of Education. If the Department approves the Decisional Memorandum, a closing date will be set. Then, we will forward to all parties involved in the transaction a closing list that includes items necessary for closing, completion dates, responsible party, etc. All items on the closing list must be completed at least one week before the closing date.
If the Department does not approve the Decisional Memorandum, a letter will be sent to the school explaining why it was not approved and possible steps the school can take to receive an affirmative decision.
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15. What can we do while our preliminary application and Decisional Memorandum are being reviewed?
Once you complete and submit the completed preliminary application, print out the additional documentation list to ensure that you can put your hands on the documents in that list. For example, you may have four years of audited financials and one year of un-audited financials. In this case, you should start to work with your school's finance team to get the schedule for the audit.
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16. When will I know that my school has been approved for a loan through the HBCU Capital Financing Program?
Based on the information in your preliminary application, your school will be informed whether the Department approved or denied the Decisional Memorandum for your school.
Although the Department may approve the Decisional Memorandum for your school, final loan approval occurs when the Secretary of the U.S. Department of Education provides his or her letter of credit at closing.
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17. What are some things that delay the closing process?
Obtaining land surveys and dealing with a pre-existing lien holder(s) can be time-consuming. Because the HBCU Capital Financing Program does not require a school to get an appraisal for collateral, we ask for insurance certificates of value and require an American Land Title Association (ALTA) survey. It may take several weeks to obtain the ALTA. The HBCU Capital Financing Program usually wants to be first or at the very least hold parity on liens. Although we work hard for equitable solutions for all parties involved, the negotiations to get resolution can consume most of the closing timetable. If the your school is a public HBCU, negotiations with state officials often take many weeks and require additional steps in the document review process.
In addition, some capital projects can weigh on the closing schedule. For example, a student center that is owned, leased, managed, or operated by a private business that makes a payment to your school for the use of the student center can pose a problem. The HBCU Capital Financing Program can only allow five percent or less of Program loan proceeds to be used for a facility that was just described. Another example of a capital project that can create some difficulty is a facility that provides outpatient care. Under this Program, these facilities have to be primarily outpatient health care for students or faculty at your school. Although we spot many of these issues in the preliminary application process, we want to be flexible so we continue work with schools that believe capital project issues such as the examples can be resolve before closing. If these issues are not resolved timely, they do become major impediments to the closing schedule.
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18. How long does it take to fund the loan?
After the HBCU Capital Financing Program receives required financial and project documentation, it takes approximately two to three months to process the loan. However, the HBCU Capital Financing Program has closed loans in as early as six weeks. The timeframe depends on the school's ability to provide the required documents and the level of negotiations involved in the loan transaction.
|Mission | Members | Meetings |
Mission
The Historically Black College and Universities (HBCU) Capital Financing Advisory Board provides advice and counsel to the Secretary and the designated bonding authority as to the most effective and efficient means of implementing construction financing on African American college campuses, and advises the Congress of the United States regarding the progress made in implementing this part of the legislation. The Advisory Board shall meet with the Secretary at least twice each year to advise as to the capital needs of historically Black colleges and universities, how those needs can be met through the program authorized by this part of the legislation, and what additional steps might be taken to improve the operation and implementation of the construction financing program.
Members
- Dr. C. Reynold Verret, President
Xavier University of Louisiana
Appointed 04/20/2022
Term expires 9/30/2024
Representative of a private HBCU
- Dr. David Hall, President
University of the Virgin Islands
Appointed 04/20/2022
Term expires 9/30/2024
Representative of a public HBCU
- Dr. Dwight J. Fennell, Sr., President
Texas College
Appointed 04/20/2022
Term expires 9/30/2024
Representative of a private HBCU
- Mr. David K. Sheppard, Chief Legal Officer & Chief of Staff
Thurgood Marshall College Fund
Appointed 3/7/2019
Term expires upon tenure of position of the President of the Thurgood Marshall College Fund
- Dr. Lezli Baskerville, President & CEO
National Association for Equal Opportunity in Higher Education
Term expires upon tenure of position of President of the National Association for Equal Opportunity in Higher Education
- Mr. Lodriguez Murray, Senior Vice President for Public Policy and Government Affairs
United Negro College Fund
Appointed 11/27/2017
Term expires upon tenure of position of Dr. Michael Lomax as President of the United Negro College Fund
- Colonel Alexander Conyers (Retired), President
South Carolina State University
Appointed 4/20/2022
Term expires 9/30/2024
Representative of a public HBCU
- Dr. Quinton T. Ross, Jr., President
Alabama State University
Appointed 4/20/2022
Term expires 9/30/2024
Representative of a public HBCU
- Dr. Valerie Montgomery Rice, President & CEO
Morehouse School of Medicine
Appointed 4/20/2022
Term expires 9/30/2024
Representative of a private HBCU
- Dr. Dietra Trent, Executive Director
White House Initiative on Historically Black Colleges and Universities
Term expires upon tenure of position Executive Director of
the White House Initiative on Historically Black Colleges
and Universities
Meetings
| Date & Time & Location | |
| Date: | Monday, November 13, 2023 |
| Time: | 10:00 a.m. – 12:30 p.m., Eastern Time |
| Address: | U.S. Department of Education Lyndon Baines Johnson Building 400 Maryland Avenue SW, First Floor Washington, DC 20202 |
- Federal Register
- Agenda PDF (122K)
- Membership PDF (107K )
- November 13, 2023 Minutes - Synopsis PDF (153K)
- Director’s Report, November 2023 PDF (177K)
- Transcript PDF (891K)
| Date & Time & Location | |
| Date: | Wednesday, September 19, 2018 |
| Time: | 9:30 a.m.-12:00 p.m., Eastern Time |
| Address: | U.S. Department of Education Lyndon Baines Johnson Building 400 Maryland Avenue SW, Room 1W128 Washington, DC 20202 |
- Federal Register Notice PDF (195K)
- Agenda PDF (14K)
- Membership PDF (88K)
- Director's Report, September 2018 PDF (30K)
| Date & Time & Location | |
| Date: | Tuesday, April 3, 2018 |
| Time: | 10:00 a.m.–2:00 p.m., Central Daylight Time |
| Address: | Room 313 (Bowden Alumni Center) Sutton Learning Center Building St. Philip’s College 1801 Martin Luther King Drive San Antonio, Texas 78203 |
- Federal Register Notice
- Documents PDF (228K)
- Draft Minutes PDF (78K)
| Date & Time & Location | |
| Date: | Saturday, December 2, 2017 |
| Time: | 4:30 p.m. to 7:30 p.m., Central Standard Time |
| Address: | White Rock Rooms 1-2, Level 5 Omni Hotel 555 South Lamar Street Dallas, TX 75202 |
- Federal Register Notice
- Agenda PDF (92K)
- Membership PDF (101K)
- May 18, 2015 Minutes - Synopsis PDF (33K)
- Director's Report, December 2017 PDF (29K)
- 2015 Response to September 24, 2012, CFAB Recommendations PDF (17K)
- Transcript PDF (813K)
| Date & Time & Location | |
| Date: | Monday, May 18, 2015 |
| Time: | 10:00 a.m. to 2:00 p.m. |
| Address: | Xavier University of New Orleans The Convocation Annex 7800 Washington Avenue New Orleans, LA 70125 |
- Federal Register Notice | PDF
- Minutes of Board Meeting PDF (547K)
| Date & Time & Location | |
| Date: | Monday, September 24, 2012 |
| Time: | 10:00 a.m. to 2:00 p.m. |
| Address: | U.S. Department of Education Board Room 555 New Jersey Avenue, N.W. Washington, DC 20001 |
- Federal Register Notice
- Minutes of Board Meeting PDF (277K)
| Date & Time & Location | |
| Date: | Friday, January 20, 2012 |
| Time: | 10:00 a.m. to 1:00 p.m. |
| Address: | U.S. Department of Education Board Room 555 New Jersey Avenue, N.W. Washington, DC 20001 |
- Federal Register Notice
- Minutes of Board Meeting PDF (889K)
| Date & Time & Location | |
| Date: | Friday, July 30, 2010 |
| Time: | 10:00 a.m. to 1:00 p.m. |
| Address: | U.S. Department of Education Board Room 555 New Jersey Avenue, N.W. Washington, DC 20001 |
- Federal Register Notice
- Minutes of Board Meeting PDF (141K)
| Date & Time & Lcation | |
| Date: | Friday, December 12, 2008 |
| Time: | 9:00 a.m. to 12:30 p.m. |
| Address: | U.S. Department of Education Board Room 555 New Jersey Avenue, N.W. Washington, DC 20001 |
- Federal Register Notice
- Minutes of Board Meeting PDF (356K)
| Date & Time & Location | |
| Date: | Friday, July 11, 2008 |
| Time: | 9:00 a.m. to 11:00 a.m. |
| Address: | Wyndham Grand Resort Pelican Room 6000 Rio Mar Boulevard Rio Grande, Puerto Rico 91203 |
- Federal Register Notice
- Minutes of Board Meeting PDF (216K)
| Date & Time & Location | |
| Date: | Friday, November 30, 2007 |
| Time: | 10:00 a.m. to 2:00 p.m. |
| Address: | Clark Atlanta University Thomas W. Cole Science Research University Center First Floor Boardroom 223 James P. Brawley Drive Atlanta, Georgia 30314 |
- Federal Register Notice
- Minutes of Board Meeting PDF (248K)
| Date & Time & Location | |
| Date: | Friday, April 20, 2007 |
| Time: | 10:00 a.m. to 2:00 p.m. |
| Address: | Xavier University University Center Building 1 Drexel Drive New Orleans, Louisiana 70125 |
- Federal Register Notice
- Minutes of Board Meeting PDF (216K)
For more information on the Historically Black College and University Capital Financing Advisory Board, contact Don E. Watson, Executive Director, at (202) 453-6166.