(206) 220-5356 (work)
(804) 363-7018 (cell)
|FOR IMMEDIATE RELEASE|
November 30, 2012
HUD OKAYS $1.8 MILLION LOAN FUND TO PROMOTE REVITALIZATION OF DOWNTOWN OLYMPIA
Loans approved by City Council will encourage investment in mixed retail & commercial development of under-utilized and vacant properties and housing for low-income residents
OLYMPIA - The U.S. Department of Housing and Urban Development today announced that HUD has okayed a $1,765, 000 loan guarantee to the City of Olympia that will enable it to establish a Economic & Community Development Loan Fund that will, the City explains, "focus" assistance on the "economic revitalization of its downtown."
HUD is providing the loan guarantee under its Section 108 Loan Guarantee Assistance program which enables local governments to borrow money from private investors at reduced interest rates. In return, local governments pledge current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. Over the years, Section 108 guarantees generally have generated $4 of private investment for every $1 in Section 108 guarantee.
"HUD's Loan Guarantee Program can be a powerful public investment tool to drive economic development in underserved areas," said HUD Secretary Shaun Donovan. "The program will be a boost to the City's revitalization efforts and provide jobs for Olympia residents who need them most."
"Over the years HUD's Section 108 program has proven an effective tool for attracting private investment to community revitalization efforts of the sort Olympia envisions for its downtown," said Mary McBride, HUD's Northwest Regional Administrator. "We are pleased to be able to support Olympia's community and economic revitalization efforts."
A three-person team from the City's Community Services Department will administer the new Fund with underwriting assistance provided by the National Development Council. All loan activities will require City Council approval. Both for- and not-for-profit organizations may seek assistance.
The City says the Fund will give priority to loans that promote commercial or retail revitalization of existing vacant buildings, redevelop an underutilized mall property, promote mixed-use commercial and retail use of vacant or underutilized parcels near a major transit facility, make public improvements for targeted businesses that can provide expanded job opportunities to low and moderate income persons, support light industry related to the production of goods or services for local distribution and subsidize the acquisition and rehabilitation of existing and aged public housing for seniors and very -low income persons
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 housing or 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.
Section 108 loans are not risk-free, however; local governments borrowing funds secured by this loan guarantee program must pledge a portion their current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. The loan must be re-paid within 20 years.
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 @HUDgov, on facebook, or sign up for news alerts on HUD's News Listserv.