The Section 108 Loan Guarantee Program provides CDBG recipients the ability to leverage their grant to access loans for economic development, housing, public facilities and infrastructure projects, including those that can enhance flood resilience.

	Supports nature-based solutions		Does not require matching funds
	Encourages public-private partnerships

Application cycle: Applications are accepted on a rolling basis. Contact your local HUD Community Planning and Development field office for application information.

Summary: HUD’s CDBG Section 108 Loan Guarantee Program allows local governments to transform a portion of their CDBG funds into low-cost, federally guaranteed loans for economic development, housing rehabilitation, public facilities, and other physical infrastructure projects, including those to increase resilience to natural disasters. While these funds are focused on entitlement communities (larger cities), small municipalities can apply for financing with the assistance of their state.

Eligible applicants: States, metropolitan cities and urban counties (e.g., CDBG entitlement recipients, and non-entitlement communities that are assisted in the submission of applications by States that administer the CDBG program).

Eligible activities: Guaranteed loan funds may be used for many of the CDBG-eligible activities, including open-space acquisition; construction, repair, replacement, or relocation of public facilities; and improvements, such as dams and levees. Funded activities must be part of a large-scale economic development, housing, or public facilities project.

• Filter — Public Private Partnerships: Borrowers have the option to re-loan funds to a private business or developer as a third-party loan.

Funding: 

• Entitlement communities can receive loan guarantees equal to five times the entitlement community’s CDBG award amount.
• Communities in non-entitlement areas that are assisted in the submission of applications by their state can receive loan guarantees equal to five times the state’s grant under the CDBG program.

Cost share: This program has no cost-share requirements.

Application process: 

• For application information, contact your local HUD Community Planning and Development field office.
• The two-part process involves an application phase and a funding phase. To apply, eligible communities can develop and submit an application for a project (or a loan fund), and the local HUD field office and Section 108 Office at HUD Headquarters concurrently review the application and make a recommendation to the Deputy Assistant Secretary for Grant Programs. During the funding phase, the community and Section 108 Office prepare the financing documents necessary to be guaranteed by HUD. Once HUD signs the loan documents and attaches its guarantee, it sends these documents to its fiscal agent, which arranges for the advanced funds to be wired to the community.