Loan amounts range from $50,000 to $5,000,000 for new or existing businesses looking to make substantial economic revitalization projects.

HUD Section 108 Loan Guarantee Program

Mission

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 be denied conventional financing to access this program, providing credit enhancement to secure traditional bank loans. 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

• Economic development activities eligible under the United States Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program


• Acquisition of real property


• Rehabilitation of publicly owned real property


• Housing rehabilitation eligible under CDBG


• Construction, reconstruction, or installation of public facilities


• Related relocation, clearance, and site improvements


• Debt service reserves

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

Funding

This innovative $29 million program, funded by HUD and the CDBG program, is administered by the City of Worcester's Economic Development Division. The Section 108 Loan Guarantee program assists projects that conventional lenders may consider as too high a risk to move forward. 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 go forward. The program does not provide equity financing and cannot provide a 100% guarantee.

Contact Person

Paul Morano, Jr., Business Assistance Director, 508-799-1400, x264, moranop@worcesterma.gov.