Can Section 108 Loans be used for substantial rehabilitation of a school if the school is active (that is, not a closed school being adapted for re-use)?
Date Published: May 2015
Please review The Section 108 Loan Guarantee Program regulations at Subpart M, Loan Guarantees, 24 CFR 570.700 - 570.711. Specifically, see "Eligible Activities" at 570.703 and note the first sentence states that, "Guaranteed loan funds may be used for the following activities, provided such activities meet the requirements of 570.200....," which are regulatory references to the General Policies of the Community Development Block Grant (CDBG) program. If your school is an active public school it may be an eligible activity for a public facility under 570.703 (l) to the extent eligible under 570.201(c). Please review these regulation citations.
Generally, you may consider using Section 108 loans to rehabilitate public facilities, except for buildings for the general conduct of government. However, please keep in mind that for purposes of determining eligibility of activities funded under Section 108 loans, CDBG General Policies and requirements apply. Therefore this activity is only eligible if it also meets a National Objective, as required at 570.200(a)(2). Criteria for determining whether an activity addresses one or more of these national objectives are found in §570.208.If you have additional questions regarding program compliance with Section 108 Loan Guarantee Program requirements, please contact your HUD Field Office.