Nonprofit To Save $200,000 On Facility Nova Services Benefits From Move To Tax-Exempt Bonds

A Spokane nonprofit organization providing job training and job placement services for people with disabilities has saved thousands of dollars on its new Spokane Valley facility thanks to tax-exempt financing by a state commission better known for its financing of low-income housing.

Nova Services moved into its 19,920-square-foot facility last year, but it converted its taxable loan to a tax-exempt bond this month through a program with the Washington State Housing Finance Commission.

The loan, refinanced through the commission and Washington Trust Bank, will save Nova Services about $200,000 over the life of the mortgage, said Linda Brennan, Nova Services executive director.

“We would have been paying a larger monthly payment - possibly $1,000 more a month (without the tax-exempt bonds), which for a nonprofit organization is substantial,” said Brennan.

Nova Services has a $1.5 million annual budget and serves as many as 110 people a day.

Nona Snell, a senior finance associate for the Housing Finance Commission, said many nonprofit organizations overlook the commission’s ability to provide tax-exempt bonds for construction of new or remodeling of existing facilities because of the word “housing” in its title.

“We also, by legislation, can issue bonds for nonprofit organizations - 501(c)(3)s more specifically,” she said.

To be eligible, nonprofit organizations must be able to secure a bank loan and must use the tax-exempt financing for facilities providing secular services.

The bank issues a loan to the organization, then the commission sells the tax-exempt bonds. Other Spokane projects that have benefited from the program include the Carlyle Personal Care Center and Lindaman Nonprofit Center.