Objective and General Information
The purpose of PIDA is to stimulate the construction of industrial building and/or development projects to increase employment in Pennsylvania with the focus on job creation.
Type of Financing
PIDA provides long term, low interest second mortgage financing for new construction, acquisition or expansion. PIDA loans are made to local non-profit industrial development corporations which, in turn, lend funds for the project. The local agency is responsible for servicing the loans for PIDA and for insuring that all state conditions are met. PIDA participation and interest rates are governed by the local unemployment rate. PIDA funds can be used for industrial development including land and building and industrial parks. Neither working capital nor machinery and equipment may be funded by PIDA. However, machinery and equipment may be funded through the Revenue Bond and Mortgage Program in conjunction with a PIDA project. PIDA will not finance acquisition of land without building; "bricks and mortar" are necessary. One new permanent job is required at the site within three years for each $25,000 of PIDA funding. If this target is not reached, the interest rate may increase to 12-1/2%.
Eligibility
PIDA loans are available to manufacturers, wholesale/distributors, or for office projects in which the PIDA-funded office will be the national or regional headquarters for the occupying company. PIDA projects are typically owner-occupied, although developers may apply for investment properties under certain circumstances. Mercantile, commercial and retail projects are ineligible.
Interest Rate and Term of Loan
PIDA loans carry a 15-year fixed rate term and require that the first mortgage holder match their term. PIDA will fund 40% of the project cost, up to $1,250,000 or $1,750,000 for projects in Enterprise Zones or KOZs). Interest rates are based on the local unemployment rate:
Interest Rate
| Washington County |
4.75% |
| Westmoreland County |
4.75% |
| Allegheny County |
4.00% |
| Fayette County |
3.00% |
| Keystone Opportunity Zones (KOZ & KOEZ) |
3.00% |
| Advanced Technology Designated Projects |
3.00% |
Fees
Charges by Middle Monongahela Industrial Development Association, Inc. include a non-refundable $2,000 application fee as well as an annual service fee. One percent of the PIDA loan is charged (minimum $500) by PIDA when their commitment letter is accepted. Other costs include legal and bank fees.
