Sectarian Borrowers

CECFA is permitted to finance certain projects for sectarian educational and cultural institutions. Prior to 2004, CECFA’s enabling legislation prohibited CECFA from issuing bonds for educational and cultural institutions that were primarily engaged in religious or sectarian activities. The Colorado General Assembly amended the CECFA statute in 2003 and 2004 to delete the language containing those prohibitions.

Since 2004 CECFA has financed many facilities operated by religious groups. However, the facilities to be financed cannot be used predominantly for religious worship or sectarian instruction. For example, general purpose classrooms can usually be financed; sanctuaries cannot. Bond counsel makes the determination whether the facility qualifies for tax-exempt financing. In addition, specific covenants are required in the bond documents to address the absence of definitive federal law on this topic. (See Section D 4 and the final section of the Financing Guidelines document)

If you would like to discuss issues that might arise in connection with a sectarian financing, please contact the Executive Director at 303-297-7332.

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