HUD 108 Loan Program

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HUD 108 Loan Program

Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. Section 108 provides communities with an efficient source of financing for housing rehabilitation, economic development, and large-scale physical development projects.

USE OF FUNDS

Acquisition of real property, rehabilitation of publicly owned real property, housing rehabilitation eligible under the CDBG program. Related relocation, clearance and site improvements. Payment of interest on the guaranteed loan and issuance costs of public offerings. Debt service reserves.

SOURCE OF FUNDS

Financed through underwritten public offerings. Financing between public offerings is provided through an interim lending facility established by HUD.

LIMITS

No commitment can be made if it would cause the total outstanding guaranteed loans to the public entities or other public entities assisted by the state to exceed and amount equal to five times the latest grant received by the state under the CDBG program.

ELIGIBILITY

Eligible applicants include:

	Metropolitan cities and urban counties, i.e., entitlement recipients under the CDBG program; and non-entitlement communities that are assisted in the submission of applications by states that administer the CDBG program.
	Proposed activities, generally, must be associated with an economic development project creating and/or retaining permanent jobs.
	The project must generally fall in SIC code 20 through 39, or consist of major warehousing or distribution centers, or other projects deemed to have significant economic development impact.
	The applicant must have a commitment from the business to create or retain jobs and make private investment. If a business has not yet been identified, then the applicant must commit to create a certain number of jobs within a specified amount of time acceptable to the state.
	Beneficiaries of Section 108 Loan Guarantee projects must be at least 51 percent low and moderate income persons.

INELIGIBLE USES

Intrastate relocation of a business, except when the relocation is caused by inadequacies in the existing location and the move will result in a greater number of jobs.

GENERAL

	Security: pledge by the applicant of current and future CDBG funds; HUD may require additional security, and will always do so if the repayment period exceeds 10 years.
	Repayment period: maximum of 20 years.
	In addition to evaluation criteria in accordance with the Section 108
	Finally, the following will also be considered:

Section 108 dollars per permanent jobs.

Actual number of jobs to be created or retained.

Potential for spin-off benefits.

$100 Million of New Venture Capital
Alabama Improvement District Financing
AMEA Capital Fund
Baldwin County EMC Revolving Loan Fund
BCEDA MICRO LOAN PROGRAM
BCEDA REVOLVING LOAN FUND
CAPCO
HUD 108 Loan Program
Industrial Revenue Bonds
Linked Deposit Low Interest Program
Rural Business Enterprise Grants and Loans
SARPC Revolving Loan Fund
SBA 504
SBA 7A
USDA Rural Development Loans
USDA Rural Utility Service