The U.S. Department of Housing and Urban Development (HUD) today announced a $34 million loan guarantee for Cincinnati, Ohio for the Affordable Housing Loan Fund Project to spur the creation of more affordable housing.
This upfront source of financing, awarded through HUD’s Section 108 Loan Guarantee Program (Section 108) program, is the lynchpin of the city’s strategy to leverage public and private resources to deliver more affordable housing units in the market. To maximize market impacts and leverage expertise, the city undertook development of new financing tools and programming in partnership with the local non-profit organization Cincinnati Development Fund (CDF), which is a local Community Development Financial Institution (CDFI) and Community Development Entity (CDE), to execute program initiatives supported by the loan pool. In turn, the city will be better able to drive private investment, add housing units throughout the city, eliminate concentrations of poverty, and allow developers to take on projects with greater financing risks in marginalized neighborhoods.
“Communities all over the country need more capital to develop and preserve affordable housing. This loan guarantee will catalyze reinvestment of private dollars into the city to address this need,” said Marion McFadden, Principal Deputy Assistant Secretary, Office of Community Planning and Development at HUD. “I commend Mayor Pureval and his team for maximizing the resources available for affordable housing.”
The Section 108 program provides Community Development Block Grant (CDBG) recipients with the ability to leverage their annual grant allocation to access low-cost, flexible financing for economic development, housing, public facility, and infrastructure projects. This project will benefit low- and moderate-income persons by providing permanent residential structures, which will be primarily occupied by low- and moderate-income households.
The Section 108 program allows local governments to leverage five times their current CDBG award into federally guaranteed loans large enough to pursue physical and economic revitalization projects capable of redeveloping entire neighborhoods. Public investment, such as Section 108 loans, can spur private economic activity, providing the resources or the confidence that private firms and individuals may need to invest in distressed areas. Read more about HUD’s Section 108 Loan Guarantee Program.
As the need for economic recovery and community development continues, HUD’s Section 108 program serves as a critical source of federal financing that helps to move projects forward and build strong, sustainable, inclusive communities
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