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Community Development Block Grants_Section 108 Loan Guarantees

Section 108
Number: 14.248
Agency: Department of Housing and Urban Development
Office: Office of Community Planning and Development

Program Information 

Program Number/Title (010):
14.248 Community Development Block Grants_Section 108 Loan Guarantees
Federal Agency (030):
Office of Community Planning and Development, Department of Housing and Urban Development
Authorization (040):
Housing and Community Development Act of 1974, as amended, Title 24, Part 570, Section Subpart M.
Objectives (050):
To provide communities with a source of financing for economic development, housing rehabilitation, public facilities, and large scale physical development projects.
Types of Assistance (060):
Uses and Use Restrictions (070):
For purposes of determining eligibility, the Community Development Block Grant (CDBG) rules and requirements apply. As with the CDBG program, all projects and activities must either principally benefit low- and moderate-income persons, aid in the elimination or prevention of slums and blight, or meet urgent needs of the community. The guaranteed loan funds are subject to restrictions that are imposed under annual appropriations bills. The assistance is also subject to restrictions that preclude the direct or indirect guarantee of tax-exempt financing. Section 108 recipients may use the guaranteed loan funds to make loans to third parties (e.g., businesses when appropriate to carry out an economic development project). Such loans generally must match the terms of the Section 108 loan to the recipient.
Eligibility Requirements (080)
Applicant Eligibility (081):
Eligible Applicants include: metropolitan cities and urban counties, i.e., CDBG entitlement recipients; nonentitlement communities that are assisted in their submission of applications by States that administer the CDBG program; nonentitlement communities eligible to receive CDBG funds under the HUD-Administered Small Cities CDBG program; and Insular Areas (American Samoa, Guam, Northern Mariana Islands, and the Virgin Islands). The public entity may be the borrower or it may designate a public agency to be the borrower. Furthermore, HUD's FY 2014 appropriations act continues HUD's authority to provide loan guarantees to States borrowing on behalf of local governments in nonentitlement areas.
Beneficiary Eligibility (082):
The principal beneficiaries are low and moderate income persons.
Credentials/Documentation (083):
Costs will be determined in accordance with OMB Circular No. A-87 for State and local governments. OMB Circular No. A-87 applies to this program.
Application and Award Process (090)
Preapplication Coordination (091):
Preapplication Coordination: Preapplication requirements are found in 24 CFR Section 570.704. Presubmission requirements are similar to those applicable for the Community Development Block Grants program. Proposed activities must be consistent with a unit of local government's Consolidated Plan submitted for HUD's Community Planning and Development Programs. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.
Application Procedures (092):
OMB Circular No. A-102 applies to this program. OMB Circular No. A-110 applies to this program. Application requirements are found in 24 CFR Section 570.704.
Award Procedure (093):
Upon approval of an application, HUD will issue to the applicant an offer of commitment to guarantee notes or other obligations issued by the applicant or its public agency designee. The commitment will be subject to compliance with applicable requirements and such conditions as HUD may specify in the commitment document. Furthermore, borrowers are required to pledge current and future CDBG funds as security for the loan guarantee. HUD also requires that the loan guarantee be secured with other collateral.
Deadlines (094):
Not Applicable.
Range of Approval/Disapproval Time (095):
From 60 to 90 days. Approximately 75 days from submission of complete application to appropriate HUD Field Office.
Appeals (096):
Not Applicable.
Renewals (097):
Assistance Consideration (100)
Formula and Matching Requirements (101):
This program has no statutory formula.
This program has no matching requirements.
MOE requirements are not applicable to this program.
Length and Time Phasing of Assistance (102):
The maximum repayment period for a Section 108 loan is twenty years. Repayment schedules and forms are negotiable. Restriction on time permitted to spend guaranteed loan funds is specified in contract executed by HUD and the borrower. See the following for information on how assistance is awarded/released: Loans funds are advanced under promissory notes or other obligations guaranteed by HUD.
Post Assistance Requirements (110)
Reports (111):
Consolidated Annual Performance Evaluation Report. Recipients are required to submit reports on cash balances, receipts, and disbursements of guaranteed loan funds and pledged amounts. No progress reports are required. Consolidated Performance Annual Performance Evaluation Report. Grantee must report performance outcomes.
Audits (112):
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.
Records (113):
The record keeping requirements of Subpart J of 24 CFR Part 570 apply to entitlement public entities receiving grants under Subpart F of 24 CFR Part 570. The record keeping requirements of Subpart I of 24 CFR Part 570 apply to State-assisted public entities.
Financial Information (120)
Obligations (122):
(Guaranteed/Insured Loans) FY 13 $230,895,000; FY 14 est $150,000,000; and FY 15 est $500,000,000
Range and Average of Financial Assistance (123):
In FY 2013 commitments were issued in amounts ranging from $1,000,000 to $42,200,000.
Program Accomplishments (130):
Fiscal Year 2013: 4,446. Fiscal Year 2014: 5,000 jobs. Fiscal Year 2015: 5,000.
Regulations, Guidelines, and Literature (140):
24 CFR 570 Subpart M.
Information Contacts (150)
Regional or Local Office (151) :
See Regional Agency Offices. Contact appropriate HUD Field Office listed in Appendix IV of the Catalog.
Headquarters Office (152):
Paul D. Webster, 451 7th Street, SW Room 7180, Washington, District of Columbia 20410 Email: Phone: (202) 708-1871 Fax: (202) 708-1798.
Website Address (153):
Examples of Funded Projects (170):
Not Applicable.
Criteria for Selecting Proposals (180):
Applications are reviewed against criteria set forth at 24 CFR 570.704.