Section 108 Loan Guarantee Program

The City of Philadelphia invested $7.5 million in Section 108 funds in the Piazza at Schmidt’s Commons, the redevelopment of an 8.2 acre vacant parcel in the City’s Northern Liberties neighborhood into a commercial and residential destination. This development had a dramatic effect, leading to a $1 billion increase in the aggregate market value of real estate in the neighborhood, stimulating the citywide economy, and creating jobs.

The Section 108 Loan Guarantee Program (Section 108) provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and other physical development projects, including improvements to increase their resilience against natural disasters. This flexibility makes it one of the most potent and important public investment tools that HUD offers to state and local governments.

Section 108 offers state and local governments the ability to transform a small portion of their Community Development Block Grant (CDBG) funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects capable of revitalizing entire neighborhoods. Such public investment is often needed to inspire private economic activity, providing the initial resources or simply the confidence that private firms and individuals may need to invest in distressed areas.

Loans typically range from $500,000 to $140 million, depending on the scale of the project or program. Under Section 108, project costs can be spread over time with flexible repayment terms, and borrowers can take advantage of lower interest rates than could be obtained from private financing sources.

Learn about Section 108 Loan Guarantee Program

View the Current Availability of Section 108 Financing to see how much borrowing capacity your State or community has under the program

Featured Resources

Section 108
Underwriting Guidelines
for Income- Producing
Projects

 

The Section 108 Underwriting Guidelines for Income-Producing Projects assists Section 108 recipients in underwriting third party loans that finance the development of income producing properties.

Program Design and Application Process

 

The Program Design and Application Process webinar describes how Section 108 can serve as an important financing tool in targeting reinvestment for economic development, public facilities and improvements, and housing rehabilitation.