HUD Section 108 Loan Guarantee Program

To promote growth in both emerging and maturing industries as well as small business start-ups and expansions.

Applicant Eligibility

Applicants for this program must demonstrate a financing gap to access this program. The applicant must demonstrate the ability to manage anticipated debt service and indicate a financial institution willing to finance the project, subject only to the guarantee.

Eligible Activities

• Acquisition of real property.
• Construction, reconstruction or installation of public facilities.
• Debt service reserves.
• Economic development activities eligible under the United States Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program.
• Housing rehabilitation eligible under CDBG.
• Rehabilitation of publicly owned real property.
• Related relocation, clearance and site improvements.

Funding

This innovative $29 million program, funded by HUD and the CDBG program, is administered by the City of Worcester's Executive Office of Economic Development. The Section 108 Loan Guarantee program assists projects that conventional lenders may consider too risky to support. The maximum Section 108 Loan Guarantee amount is 80% of the conventional loan to value amount (including bank financing), or the minimum amount required to make the project move forward. The program does not provide equity financing and cannot provide a 100% guarantee.

HUD Eligibility Requirements

In order to be eligible for CDBG funding, each applicant must qualify as meeting one of the following national objectives of the CDBG program:

• Benefiting low- and moderate-income persons.
• Meeting an urgent need.
• Prevention or elimination of slum or blight.

Additional Information

For more information and to apply, contact:

Peter Dunn
Chief Development Officer
508-799-1400
dunnp@worcesterma.gov