(Sign up for GlobeSt.com’s NEW Student Housing Leader Email.)

WASHINGTON, DC-Wesley Theological Seminary plans to break ground on what will be the first student housing project at the seminary’s main campus in more than 40 years. The school secured $19.6 million in tax-exempt financing from TD Bank. It also is refinancing $9.4 million in debt. Jones Lang LaSalle’s John Gibb and Patti Restrepo represented Wesley in the deal.

The new student housing project will be built at 4500 Massachusetts Ave. The refinancing is related to debt on housing at Mount Vernon Square and campus infrastructure improvements. The tax-exempt financing was issued through the District of Columbia Revenue Bond Program. Venable served as bond counsel for the tax-exempt financing, and Arent Fox served as the borrower’s counsel.

Demand for this kind of debt is very high, Gibb tells GlobeSt.com. “Banks are very eager to purchase it,” he says, and the strong appetite meant that JLL was able to secure competitive terms for the seminary. Banks are careful to evaluate the deals, though, Restrepo adds. “In this case, the project makes sense—in an area like Washington, DC, schools have to be competitive with their housing accommodations.”

Tax-exempt financing is growing in popularity for student housing finance. To cite a few examples: Education Realty Trust recently broke ground on a $53.6-million third-party student-housing project on the Mansfield University campus in Mansfield, PA, after securing tax-exempt financing with the USDA and First Commonwealth Financial Corp.; Build NYC Resource Corp. approved approximately $37 million in tax-exempt financing earlier this year for four projects in New York City; and the Illinois Finance Authority provided financing on behalf of Loyola University of Chicago and Lake Forest College. This deal included the sale of $150 million in taxable bonds and the refunding of tax-exempt debt.