On February 17, 2009, President Obama signed into law the $787 billion stimulus bill, The American Recovery and Reinvestment Act of 2009 (ARRA). As part of ARRA, Recovery Zone Facility Bonds (RZFB) were introduced as a groundbreaking type of tax-exempt private activity bond that would tremendously increase financing opportunities for private development projects that have historically not qualified for tax-exempt financing. The list of qualified businesses under the RZFB program is extensive - any trade or business within a designated recovery zone, excluding only a few types of businesses such as residential property, golf courses, country clubs, massage parlors, facilities dedicated to sale of alcohol or gambling, etc.

With the frozen capital markets, many developers have been presented RZFBs as the only source of financing for their stalled development projects. However, before developers devote substantial time and resources in the pursuit of RZFB financing, they need to take a hard look at this program and their own situations to determine if this financing will truly be available and workable in their local jurisdictions.