Section 108 Loan
U.S. Department of Housing & Urban Development (HUD) Section 108 Loan
Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. Section 108 provides states and communities with a source of financing for economic development, housing rehabilitation, public facilities, and large-scale physical development projects. This makes it one of the most potent and important public investment tools that HUD offers to states and local governments. It allows them to transform a small portion of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew 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.
Section 108 loans are not risk-free, however, local governments borrowing funds guaranteed by Section 108 must pledge their current and future CDBG allocations to cover the loan amount as security for the loan. Regulations governing the Section 108 program may be found at 24 CFR 570, Subpart M, Loan Guarantees.
Ogden City Section 108 Loan
Ogden City has prepared a HUD Section 108 Loan Guarantee application for $3,340,000. The purpose of this Section 108 Loan is to assist with economic and community development activities for development of the Ogden Business Exchange (Commercial Park), located in West Ogden, Trackline EDA. Loan proceeds will be used to fund property acquisition, infrastructure improvements, environmental remediation expenses, and HUD closing costs. This loan will be repaid from property sales receipts and tax increment revenue created from development in the Trackline Economic Development Area (EDA) over a 20 year program period.
Public comments and input are paramount to ensure the public's needs are met.