Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities

U.S. Government Accountability Office

Community Development Block Grant (CDBG) Section 108 Loan Guarantee

Administering Agency/Entity Department of Housing and Urban Development
Short Description Provides communities with financing for community development (activities such as housing rehabilitation, economic development, and large-scale physical development projects). Metropolitan cities and urban counties that receive entitlement grants may apply directly to HUD for loan guarantee assistance. Nonentitlement communities under the state CDBG program may also apply, but must have a pledge of their state’s CDBG funds from the appropriate agency. Insular areas and nonentitlement communities in Hawaii may also apply directly to HUD for loan guarantee assistance. 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. Loan commitments are often paired with Economic Development Initiative or Brownfield Economic Development Initiative grants, which can be used to pay predevelopment costs of a Section 108-funded project.
Primary Purpose Supports housing and other activities
Type of Housing Supported Both
Type of Assistance Loan guarantee
Fiscal Year 2010 Obligations Obligations for CDBG Section 108 Loan Guarantee in fiscal year 2010 were $4 million; some amount of the obligations may be attributable to activities related to housing. Obligations represent the expected credit subsidy costs for loan commitments made in fiscal year 2010. These estimates are revised in subsequent years and the ultimate cost will not be known until the loans have matured.

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