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Q. We are considering financing via a lease 100% of the cost of buses to a transit authority that has received approval of a 5307 formula grant related to this capital outlay. Can the formula grant funds be pledged to us by the authority as a source of repayment?
A. Generally, a grantee cannot commit funds to a third party without FTA approval. The transit agency should seek pre-approval from the appropriate FTA Regional Office. Note: This Q/A was posted the month of: 03-2009.
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