Few Takers So Far For Low-Interest Renovation Bonds

By Joetta L. Sack

Washington

When the tiny Roff school district in southeastern Oklahoma upgraded the interiors of its five school buildings and added high-tech equipment, school leaders soon realized that their efforts would be wasted if they didn't replace the buildings' leaky roofs as well.

But no money was left over from a recent $500,000 bond, and state law prohibited the school board from even asking its impoverished community to approve another one. So the 350-student district looked to a little-known source of additional funding: the federal government's Qualified Zone Academy Bonds.

Under the 3-year-old program, qualified districts in impoverished areas have opportunities to secure interest-free or low-interest loans to help them make repairs and upgrade their technology. The Department of Education distributes money to all the states that choose to participate in the form of tax credits; states can then use those credits to secure loans for...