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.
Guides, tools, webinars, and other resources are provided to assist grantees and program partners in designing and implementing projects and programs.
HUD will publish additional resources on how to apply for loan guarantees and release new underwriting guidelines in early 2016. To receive information about upcoming webinars and the launch of new resource materials, please join the Section 108 mailing list.