CHEFA offers a pooled recycling loan program which allows the participating institutions to "recycle" bond proceeds. The bond issue is structured as a variable rate transaction, with credit enhancement provided by a letter of credit. Each loan has an amortization schedule based on the initial project while the bonds are given a longer amortization schedule (typically a bullet of 25 or 30 years). As the initial loan is amortized, payments are made into a loan repayment fund held by the trustee. If eligible projects are available within a period after the payment is made (typically a year), loans can be made to finance those projects from the principal payments in this fund. If the institution decides not to utilize these funds, they can be made available or re-loaned to another pooled loan participant. Should the remaining funds in the loan repayment fund not be used for additional capital projects, they will be transferred to the debt service fund to redeem bonds.

In order to borrow via this loan program, the institution must provide evidence of its Board's approval of the borrowing which should include a description of the project and a proposed amortization schedule. The Institution's participation in the pooled bond issue must also be approved by bond counsel. The institution must submit a financing application and participation is subject to approval by both the Authority and the letter of credit facility provider.

Bond Counsel will require that the TEFRA (public hearing) notice for the pooled recycling loan program be broad enough to include both current and future projects so that additional projects can be financed and covered by the original TEFRA approval.