HUD APPROVES $42 MILLION LOAN GUARANTEE TO NEW MEXICO FOR ECONOMIC DEVELOPMENT PROJECTS IN SMALL COMMUNITIES
ALBUQUERQUE – The U.S. Department of Housing and Urban Development today announced that it is approving a $42 million loan guarantee to the State of New Mexico. This federal loan guarantee assistance is a first for the State,which will establish a loan fund to support economic development projects in smaller, often rural communities throughout New Mexico. The State estimates that these projects will create 844 new jobs, primarily for the benefit of low- and moderate-income persons.
This is not a HUD loan. HUD’s Section 108 Loan Guarantee Assistance Program enables local governments to borrow money at reduced interest rates to promote economic development, stimulate job growth and improve public facilities. Such public ‘guarantee’ is often needed to inspire private capital contributions, to provide seed money or to simply boost confidence that private firms and individuals may need to invest in distressed areas. The security for the loan guarantee not only includes a pledge by the State of its current and future Community Development Block Grant (CDBG) funds, but also will include the pledge of assets related to the economic development projects assisted with this loan guarantee financing.
"HUD’s Loan Guarantee Program can be a powerful public investment tool to drive economic development in underserved areas," said HUD Acting Regional Administrator Mark Brezina. "The program will be a boost to community revitalization efforts and provide jobs for residents who need them most."
New Mexico’s Department of Finance and Administration, Local Government Division, will administer this initiative to eligible communities across New Mexico that meet program and financial underwriting criteria and have been reviewed by the state Community Development Council.
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