Section 108 Loan Guarantee Program

Study of hud s section 108 loan guarantee program author.

Section 108 loan guarantee program. The section 108 loan guarantee program offers local governments a source of financing for economic development large scale public facility projects and public infrastructure. Under this section hud offers communities a source of financing for certain community development activities such as housing rehabilitation economic development and large scale physical development projects. The section 108 program is the loan guarantee component of the community development block grant cdbg program and is authorized by section 108 42 u s c.

Section 108 enables states and local governments participating in the community development block grant cdbg program to obtain federally guaranteed loans to fund large economic development projects and undertake revitalization activities. Section 108 financing provides an avenue for communities to undertake larger more costly projects where they may have limited resources to invest in upfront. Under pennsylvania s initiative to use section 108 the loans are guaranteed by the commonwealth committing the use of future cdbg funds to pay off the loan in case of default.

The cdbg loan guarantee program section 108 program is an economic and community development financing tool authorized under section 108 of title i of the housing and community development act of 1974 as amended. Section 108 is the loan guarantee provision of the community development block grant cdbg program. This document announces the fee that hud will collect from borrowers of loans guaranteed under hud s section 108 loan guarantee program section 108 program to offset the credit subsidy costs of the guaranteed loans pursuant to commitments awarded in fiscal year 2020.

The section 108 loan guarantee program section 108 provides community development block grant cdbg recipients with the ability to leverage their annual grant allocation to access low cost flexible financing for economic development housing public facility and infrastructure projects. The section 108 loan guarantee program provides states and local governments access to low interest financing for a variety of projects including affordable housing developments public facilities and infrastructure improvements and commercial industrial developments. 5308 of the housing and community development act of 1974 as amended hcd act.

Communities can use section 108 guaranteed loans to either finance specific projects or to launch loan funds to finance multiple projects over several years. Department of housing and urban development.