About
The Section 108 Loan Guarantee Program allows communities to transform a small portion of the Community Development Block Grant (CDBG) funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects capable of revitalizing entire neighborhoods.
Public investment is often needed to inspire private economic activity in distressed areas. The benefit of the Section 108 program is that project costs can be spread over time with flexible repayment terms and lower interest rates than private funding sources.
CDBG and Section 108 Loans present wonderful opportunities to include green infrastructure and other healthy watershed projects into neighborhood enhancements and public property projects.
Section 108 projects must meet at least one of two goals in the 2010-2015 Strategic Plan:
- Goal 2B: Meet the need for quality affordable rental homes – expand the supply of affordable rental homes where they are most needed
- Goal 4A: Build inclusive and sustainable communities free from discrimination: catalyze economic development and job creation, while enhancing and preserving community assets.
Local governments borrowing Section 108 funds must pledge their current and future CDBG allocations as security for the loan. The goal is for the proposed project to have sufficient cash flow to repay the loan without any need for current or future CDBG dollars used for repayment.
Project Examples
https://www.hudexchange.info/programs/section-108/
Click on the years on the right-side of the webpage to look at projects by year.
Youngstown is using their Section 108 Loan to redevelop a 20-acre riverfront site into a public park and amphitheater. The site includes a play area, walking trails, green infrastructure for stormwater retention, event space, water features and athletic areas.