January 4, 2013
HUD SOUTHEAST REGIONAL ADMINISTRATOR ANNOUNCES $1.6 MILLION LOAN GUARANTEE TO PALM BEACH COUNTY
Financing assistance will be available to local businesses in distressed areas
MIAMI – U.S. Housing and Urban Development Southeast Regional Administrator Ed Jennings, Jr. announced today that HUD is approving a $1.6 million loan guarantee to Palm Beach County to provide financing assistance, through a loan fund, to existing businesses and new business development in distressed areas of the county.
"Local businessmen will benefit from access to capital that will provide the needed boost to bring or upgrade commercial activity in economically distressed areas while simultaneously creating approximately 45 much needed jobs, many of which will be held by low and moderate-income persons-- truly a win-win situation for Palm Beach," said Jennings.
HUD's loan guarantee will leverage another $2.3 million in private funding and business equity. Palm Beach County will provide financing to pay for acquisition and redevelopment of real property, construction/renovation of commercial and industrial buildings, site preparation activities, and working capital. Each loan from the loan fund will not exceed 40% of a business borrower's development costs and will be used in conjunction with a business borrower's private financing, which will provide approximately 50% of a business borrower's development costs. Each business borrower will be required to provide 10% in equity for development costs.
HUD's Section 108 Loan Guarantee Assistance Program enables local governments to borrow money from private investors at reduced interest rates to promote economic development, stimulate job growth and improve public facilities. Such public investment is often needed to inspire private contributions, to provide seed money, or to simply boost confidence that many private firms and individuals need to invest in distressed areas. It allows them to transform a small portion of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew entire neighborhoods.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on Twitter at @HUDgov or on Facebook at www.facebook.com/HUD.