How Does TIP Work?

TIP bridges the gap between infrastructure spending and reimbursement by leveraging future MUD receivables through a non-recourse, tax-exempt financing.

What is a MUD?

Municipal Utility Districts (MUDs)—and similar types of special districts—are used to help finance the cost of public infrastructure for new communities across Texas. These districts typically fund improvements such as water, sewer, and road systems.

MUDs are established under Chapters 49 and 54 of the Texas Water Code and are created either by the Texas Commission on Environmental Quality (TCEQ) or through special legislation passed by the Texas Legislature.

As development is completed and certified, MUDs may issue tax-exempt bonds, with the proceeds used to reimburse developers for eligible public improvements. Today, there are thousands of MUDs operating across Texas—and millions of Texans live in them.

The Traditional MUD Reimbursement Process

  1. MUD enters into a reimbursement agreement with the developer for eligible infrastructure.
  2. Once infrastructure is complete, the developer is reimbursed from MUD bond issuances over time in compliance with TCEQ rules.
  3. The developer may assign future reimbursements to help secure financing to pay for public infrastructure.
Traditional MUD Financing Chart with Texas Infrastructure Program bonds

What is TIP?

The Texas Infrastructure Program (TIP) helps bridge the gap between when capital is needed to fund infrastructure and when the MUD can afford to reimburse developers, allowing for non-recourse, early stage, tax-exempt financing to support development today.

  1. Developer assigns future reimbursement rights to repay TIP.
  2. TIP provides funding today based on projected build-out and expected MUD bond issuances.
  3. TIP financing is repaid using reimbursement proceeds of the MUD bond issuances.
  4. Once TIP has been paid in full, the remaining reimbursements revert back to the developer.
MUD Receivable Financing Chart with Texas Infrastructure Program bonds

Why Developers Choose TIP

Speed – TIP has a vetted and tested transaction process that provides efficient and transparent execution.

Experience – The TIP team has completed 30+ transactions totaling over $1.5B in principal.

Funding Options – TIP has the ability to fund construction of eligible public improvements or reimburse for costs already in the ground.

Fully Non-Recourse – Only MUD bond proceeds secure the financing.

Custom Structuring – Every transaction is tailored to your project and financing goals.

Get in TouchCase Studies

Key Milestones of the Texas Infrastructure Program

Prior to TIP, MUD receivables were sold to lenders and private investors.

2021

Prior to TIP, MUD receivables were sold to lenders and private investors.

2021

1st municipal security secured solely by MUD receivables.

Prairie Ridge, Ellis County

Q2 2021

1st municipal security secured solely by MUD receivables.

Prairie Ridge, Ellis County

Q2 2021

1st municipal security secured solely by MUD receivables that funded construction.

Walden Pond, Kaufman County

Q1 2023

1st municipal security secured solely by MUD receivables that funded construction.

Walden Pond, Kaufman County

Q1 2023

Piper Sandler & Co. acts as underwriter for 1st tax-exempt municipal security secured solely by MUD receivables.

Lariat, Williamson County

Q2 2023

Piper Sandler & Co. acts as underwriter for 1st tax-exempt municipal security secured solely by MUD receivables.

Lariat, Williamson County

Q2 2023

1st current interest, tax-exempt municipal security secured solely by MUD receivables.

Hartland Ranch, Caldwell County

Q3 2023

1st current interest, tax-exempt municipal security secured solely by MUD receivables.

Hartland Ranch, Caldwell County

Q3 2023

1st TIP financing is paid off.

Goodland, formerly known as Prairie Ridge, Ellis County

Q4 2023

1st TIP financing is paid off.

Goodland, formerly known as Prairie Ridge, Ellis County

Q4 2023

PFA selects TIP as its exclusive program partner for MUD Receivable financings.

Q1 2024

PFA selects TIP as its exclusive program partner for MUD Receivable financings.

Q1 2024

Piper Sandler & Co. becomes the exclusive underwriter for the TIP program.

Q1 2024

Piper Sandler & Co. becomes the exclusive underwriter for the TIP program.

Q1 2024

Piper Sandler & Co. acts as underwriter for 1st $100+ million tax-exempt municipal security secured solely by MUD receivables.

Astro Texas, Multiple Counties

Q1 2024

Piper Sandler & Co. acts as underwriter for 1st $100+ million tax-exempt municipal security secured solely by MUD receivables.

Astro Texas, Multiple Counties

Q1 2024

1st MUD refinancing of a MUD receivable & the largest MUD receivable transaction to date.

Astro Texas, Multiple Counties

Q1 2025

1st MUD refinancing of a MUD receivable & the largest MUD receivable transaction to date.

Astro Texas, Multiple Counties

Q1 2025

Key Milestones in the Texas Infrastructure Program

Prior to TIP, MUD receivables were sold to lenders and private investors.

2021

1st municipal security secured solely by MUD receivables.

Prairie Ridge, Ellis County

Q2 2021

1st municipal security secured solely by MUD receivables that funded construction.

Walden Pond, Kaufman County

Q1 2023

Piper Sandler & Co. acts as underwriter for 1st tax-exempt municipal security secured solely by MUD receivables.

Lariat, Williamson County

Q2 2023

1st current interest, tax-exempt municipal security secured solely by MUD receivables.

Hartland Ranch, Caldwell County

Q3 2023

1st TIP financing is paid off.

Goodland, formerly known as Prairie Ridge, Ellis County

Q4 2023

PFA selects TIP as its exclusive program partner for MUD Receivable financings.

Q1 2024

Piper Sandler & Co. becomes the exclusive underwriter for the TIP program.

Q1 2024

Piper Sandler & Co. acts as underwriter for 1st $100+ million tax-exempt municipal security secured solely by MUD receivables.

Astro Texas, Multiple Counties

Q1 2024

1st MUD refinancing of a MUD receivable & the largest MUD receivable transaction to date.

Astro Texas, Multiple Counties

Q1 2025

Texas Infrastructure Program icon in red