FEDERAL AGENCY:

OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

AUTHORIZATION:

Housing and Community Development Act of 1974, Section 108 as amended.

To provide communities with a source of financing for economic development, housing rehabilitation, public facilities, and large scale physical development projects.

TYPES OF ASSISTANCE:

Guaranteed/Insured Loans. Place Cursor Here for Definition

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   Eligible Applicants include: metropolitan cities and urban counties, i.e., CDBG entitlement recipients; non-entitlement communities that are assisted in their submission of applications by States that administer the CDBG program; and non-entitlement communities eligible to receive CDBG funds under the HUD- Administered Small Cities CDBG program. Furthermore, the public entity may be the borrower or it may designate a public agency to be the borrower.

Beneficiary Eligibility:   The principal beneficiaries are low and moderate income persons.

Credentials/Documentation:   Costs will be determined in accordance with OMB Circular No. A-87 for State and local governments.

Pre-application Coordination:   Pre-application requirements are found in 24 CFR Section 570.704. Pre-submission 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.

Application Procedure:   Application requirements are found in 24 CFR Section 570.704.

Award Procedure:   Upon approval of an application, HUD will issue to the worthy 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:   None; applications can be submitted at any time.

Range of Approval/Disapproval Time:   None.

Appeals:   None.

Renewals:   Not Applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   Section 108 has no matching requirement. Maximum commitment amounts are limited as follows: Entitlement Public Entities - an entitlement public entity may apply for up to five times the public entity's latest (approved) CDBG entitlement amount, minus any outstanding Section 108 commitments and/or principal balances on Section 108 loans; State assisted public entities - a non-entitlement public entity may apply for up to five times the latest (approved) CDBG amount received by its State, minus any outstanding Section 108 commitments and/or principal balances on Section 108 loans for which the State has pledged its CDBG funds as security; and Non-entitlement public entities eligible under the HUD administered Small Cities Program - for a public entity in Hawaii, the maximum commitment amount is five times the public entity's latest grant under Subpart F of 24 CFR Part 570, minus any outstanding Section 108 commitments and/or principal balances on Section 108 loans.

Length and Time Phasing of Assistance:   The maximum repayment period for a Section 108 loan is twenty years. Repayment schedules and forms are negotiable.

POST ASSISTANCE REQUIREMENTS:

Reports:   The reporting requirements for Section 108 are the same as the reporting requirements for the CDBG program.

Audits:   In accordance with the provisions of OMB Circular No. A- 133, "Audits of State and Local governments and Non-Profit Organizations," nonfederal entities that expend financial assistance of $300,000 or more in Federal awards will have a single or a program- specific audit conducted for that year. Nonfederal entities that expend less than $300,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.

Records:   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:

Account Identification:   86-0198-0-1-451.

Obligations:   (Loan limitation) FY 01 $1,258,225,800; FY 02 est $608,696,800; and FY 03 est $275,000,000.

Range and Average of Financial Assistance:   $225,000 to $13,000,000; Average: $3,020,000.

For fiscal year 2001, 69 commitments are estimated to have generated 26,629 jobs. Fiscal year 2002 estimate: 75 commitments issued and 25,000 new/retained jobs generated during each year.

REGULATIONS, GUIDELINES, AND LITERATURE:

24 CFR 570 Subpart M.

INFORMATION CONTACTS:

Regional or Local Office:   Contact appropriate HUD Field Office listed in Appendix IV of the Catalog.

Headquarters Office:   Financial Management Division, Community Planning and Development, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410.

Web Site Address:   http://www.hud.gov/progdesc/cpdindx.html

EXAMPLES OF FUNDED PROJECTS:

A wide-range of community and economic development projects includes public facilities, housing rehabilitation projects, and economic development loan funds.

CRITERIA FOR SELECTING PROPOSALS:

Applications are reviewed against criteria set forth at 24 CFR S 570.704.