For the 5% private activity bond criterion, loans must be:

The criterion for private activity bonds, particularly regarding the 5% threshold, implies a standard for determining whether certain loans can be classified under this bond category. To qualify, loans must have an interest rate set at exactly 5% or exceed that amount, which aligns with the need to maintain a minimum interest rate threshold for financing purposes. The $5 million figure is often noted as a cap for certain types of private activity bond exemptions, making the combination of the 5% interest rate and the minimum loan amount significant in relation to compliance with federal regulations.

This understanding is crucial as it reinforces the regulatory framework governing private activity bonds, ensuring that they serve their intended purpose of facilitating necessary public infrastructure and development projects while still adhering to established financial limits.