Title 34—Education--Volume 1
PART 225—CREDIT ENHANCEMENT FOR CHARTER SCHOOL FACILITIES PROGRAM
§ 225.1   What is the Credit Enhancement for Charter School Facilities Program?
(a) The Credit Enhancement for Charter School Facilities Program provides grants to eligible entities to assist charter schools in obtaining facilities.
(b) Grantees use these grants to do the following:
(1) Assist charter schools in obtaining loans, bonds, and other debt instruments for the purpose of obtaining, constructing, and renovating facilities.
(2) Assist charter schools in obtaining leases of facilities.
(3) Assist charter schools with the predevelopment costs required to assess sites for the purpose of acquiring (by purchase, lease, donation, or otherwise) an interest (including an interest held by a third party for the benefit of a charter school) in improved or unimproved real property or constructing new facilities, or renovating, repairing, or altering existing facilities, and that are necessary to commence or continue the operation of a charter school.
(c) Grantees may demonstrate innovative credit enhancement initiatives while meeting the program purposes under paragraph (b) of this section.
(d) For the purposes of these regulations, the Credit Enhancement for Charter School Facilities Program includes grants made under the Charter School Facilities Financing Demonstration Grant Program.
§ 225.2   Who is eligible to receive a grant?
The following are eligible to receive a grant under this part:
(a) A public entity, such as a State or local governmental entity;
(b) A private nonprofit entity; or
(c) A consortium of entities described in paragraphs (a) and (b) of this section.
§ 225.3   What regulations apply to the Credit Enhancement for Charter School Facilities Program?
The following regulations apply to the Credit Enhancement for Charter School Facilities Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) [Reserved]
(6) 34 CFR part 81 (General Educational Provisions Act—Enforcement).
(7) 34 CFR part 82 (New Restrictions on Lobbying).
(8) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Grants)).
(9) [Reserved]
(10) 34 CFR part 97 (Protection of Human Subjects).
(11) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing).
(12) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 225.
(c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in 2 CFR part 3474 and OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in 2 CFR part 3485.
§ 225.4   What definitions apply to the Credit Enhancement for Charter School Facilities Program?
(a) Definitions in the Act. The following term used in this part is defined in section 4310(2) of the Elementary and

Secondary Education Act of 1965, as amended by the Every

Student Succeeds Act:
(b) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR 77.1:
§ 225.10   How does the Secretary evaluate an application?
(a) The Secretary evaluates an application on the basis of the criteria in § 225.11.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
§ 225.11   What selection criteria does the Secretary use in evaluating an application for a Credit Enhancement for Charter School Facilities grant?
The Secretary uses the following criteria to evaluate an application for a Credit Enhancement for Charter School Facilities grant:
(a) Quality of project design and significance. (35 points) In determining the quality of project design and significance, the Secretary considers—
(1) The extent to which the grant proposal would provide financing to charter schools at better rates and terms than they can receive absent assistance through the program;
(2) The extent to which the project goals, objectives, and timeline are clearly specified, measurable, and appropriate for the purpose of the program;
(3) The extent to which the project implementation plan and activities, including the partnerships established, are likely to achieve measurable objectives that further the purposes of the program;
(4) The extent to which the project is likely to produce results that are replicable;
(5) The extent to which the project will use appropriate criteria for selecting charter schools for assistance and for determining the type and amount of assistance to be given;
(6) The extent to which the proposed activities will leverage private or public-sector funding and increase the number and variety of charter schools assisted in meeting their facilities needs more than would be accomplished absent the program;
(7) The extent to which the project will serve charter schools in States with strong charter laws, consistent with the criteria for such laws in section 4303(g)(2) of the Elementary and Secondary Education Act of 1965; and
(8) The extent to which the requested grant amount and the project costs are reasonable in relation to the objectives, design, and potential significance of the project.
(b) Quality of project services. (15 points) In determining the quality of the project services, the Secretary considers—
(1) The extent to which the services to be provided by the project reflect the identified needs of the charter schools to be served;
(2) The extent to which charter schools and chartering agencies were involved in the design of, and demonstrate support for, the project;
(3) The extent to which the technical assistance and other services to be provided by the proposed grant project involve the use of cost-effective strategies for increasing charter schools' access to facilities financing, including the reasonableness of fees and lending terms; and
(4) The extent to which the services to be provided by the proposed grant project are focused on assisting charter schools with a likelihood of success and the greatest demonstrated need for assistance under the program.
(c) Capacity. (35 points) In determining an applicant's business and organizational capacity to carry out the project, the Secretary considers—
(1) The amount and quality of experience of the applicant in carrying out the activities it proposes to undertake in its application, such as enhancing the credit on debt issuances, guaranteeing leases, and facilitating financing;
(2) The applicant's financial stability;
(3) The ability of the applicant to protect against unwarranted risk in its loan underwriting, portfolio monitoring, and financial management;
(4) The applicant's expertise in education to evaluate the likelihood of success of a charter school;
(5) The ability of the applicant to prevent conflicts of interest, including conflicts of interest by employees and members of the board of directors in a decision-making role;
(6) If the applicant has co-applicants (consortium members), partners, or other grant project participants, the specific resources to be contributed by each co-applicant (consortium member), partner, or other grant project participant to the implementation and success of the grant project;
(7) For State governmental entities, the extent to which steps have been or will be taken to ensure that charter schools within the State receive the funding needed to obtain adequate facilities; and
(8) For previous grantees under the charter school facilities programs, their performance in implementing these grants.
(d) Quality of project personnel. (15 points) In determining the quality of project personnel, the Secretary considers—
(1) The qualifications of project personnel, including relevant training and experience, of the project manager and other members of the project team, including consultants or subcontractors; and
(2) The staffing plan for the grant project.
§ 225.12   What funding priority may the Secretary use in making a grant award?
(a) The Secretary may award up to 15 additional points under a competitive priority related to the capacity of charter schools to offer public school choice in those communities with the greatest need for this choice based on—
(1) The extent to which the applicant would target services to geographic areas in which a large proportion or number of public schools have been identified for comprehensive support and improvement or targeted support and improvement under the ESEA, as amended by the Every Student Succeeds Act;
(2) The extent to which the applicant would target services to geographic areas in which a large proportion of students perform below proficient on State academic assessments; and
(3) The extent to which the applicant would target services to communities with large proportions of students from low-income families.
(b) The Secretary may elect to—
(1) Use this competitive priority only in certain years; and
(2) Consider the points awarded under this priority only for proposals that exhibit sufficient quality to warrant funding under the selection criteria in § 225.11.
§ 225.20   When may a grantee draw down funds?
(a) A grantee may draw down funds after it has signed a performance agreement acceptable to the Department of Education and the grantee.
(b) A grantee may draw down and spend a limited amount of funds prior to reaching an acceptable performance agreement provided that the grantee requests to draw down and spend a specific amount of funds and the Department of Education approves the request in writing.
§ 225.21   What are some examples of impermissible uses of reserve account funds?
(a) Grantees must not use reserve account funds to—
(1) Directly pay for a charter school's construction, renovation, repair, or acquisition; or
(2) Provide a down payment on facilities in order to secure loans for charter schools. A grantee may, however, use funds to guarantee a loan for the portion of the loan that would otherwise have to be funded with a down payment.
(b) In the event of a default of payment to lenders or contractors by a charter school whose loan or lease is guaranteed by reserve account funds, a grantee may use these funds to cover defaulted payments that are referenced under paragraph (a)(1) of this section.