Frequently Asked Questions

Find answers to the most common questions about the Texas Infrastructure Program (TIP) and TIP Bonds.

What types of special districts can developers leverage to utilize this tool?

Though Municipal Utility Districts (MUDs), Municipal Management Districts (MMDs), Water Control and Improvement Districts (WCIDs), Water Improvement Districts (WIDs), and Fresh Water Supply Districts (FWSDs) are the most common, developers are able to leverage all chapter 49 and 54 districts to use this tool.

How does TIP impact the traditional MUD process?

It doesn’t! TIP financings have no impact on the traditional MUD issuance process, consultant teams, or TCEQ rules.

What is the recourse for TIP bonds?

There is no recourse to the land or developer. The only collateral for TIP bonds are the future MUD reimbursements.

How long does a TIP financing take to close?

After the diligence process is complete, most TIP financings close within approximately 75 days, at which point funds are made available.

Is there a financing size requirement for TIP?

No, there is not a size requirement for TIP financings.

However, there are efficiencies in transaction costs as financing grows in size.

What are the typical borrowing costs for TIP, including transaction fees?

When considering the interest rate, transaction fees, and reserves (if necessary), the typical borrowing cost for TIP bonds ranges between 7 – 11%.

Who buys TIP bonds?

Mutual funds and other high-yield municipal investors are the typical buyers of TIP bonds.

How do I get started on a TIP financing?

Reach out to our team to discuss your project and financing goals.