TIF Financing Options: The Pros and Cons for Nebraska Developers

When a Nebraska developer secures a TIF Bond from their CRA, they have options for monetizing it. Understanding these options helps municipal leaders evaluate developer proposals and structure deals that deliver the best outcomes for the community.

Option 1: Hold the Bond and Collect Increment Over Time

A developer can hold the TIF Bond and receive payments as ad valorem increment is collected each year. Nebraska’s 15-year standard period (20 for extremely blighted areas) means the developer waits up to two decades for full repayment — while construction costs are front-loaded. For most developers, tying up capital in a long-duration receivable is financially inefficient, especially when construction lenders expect equity at closing.

Option 2: Borrow Against the Bond

A developer can use the TIF Bond as collateral for a loan, providing some upfront liquidity at a discount. The lender will not advance full value, interest adds cost, and the developer retains the ongoing loan relationship. Nebraska’s ad-valorem-only increment framework (no sales tax or franchise fees) may lead lenders to apply more conservative valuations compared to multi-revenue-stream states.

Option 3: Sell the Bond to Hageman Capital

Hageman Capital purchases developer-backed TIF Bonds, providing upfront cash at closing. No ongoing loan, no interest accruing, no collection uncertainty. The developer trades a 15-to-20-year receivable for day-one capital. Under proposed LB 1168, taxpayer agreements with super-priority lien security would strengthen the bond’s value and support competitive purchase pricing.

Why This Matters for Municipal Leaders

When a developer plans to sell their TIF Bond to Hageman Capital, it signals the deal has financing certainty, the structure is sound, and the project is more likely to complete on schedule — which means the increment starts flowing on time. For municipalities and CRAs, that is the best possible outcome.

Hageman Capital works with both municipalities and developers to structure Nebraska TIF Bonds for maximum value. Connect with our team to learn more.