Application Notes:

Applications are accepted on a rolling basis.

Prior to submitting an application, public entities are advised to contact the program staff, using the information provided in the Contact section, for guidance on preparing an application.

Applications must be submitted to the appropriate local field office listed online at www.hud.gov.

Applications must include:

• Description of proposed activities in the context of the applicant’s community development objectives, as included in its U.S. Department of Housing and Urban Development (HUD) Consolidated Plan
• Requested loan amount
• Certifications
• Project-specific application information (if applicable):
  • Project information
  • Form of assistance
  • Information on organizational arrangements
  • Information for financial underwriting
  • Information for program requirements
• Loan fund application information (if applicable):
  • Description of loan fund
  • Loan portfolio information
  • Underwriting process information/organizational arrangements
  • Underwriting criteria
  • Information for program requirements

Applicants are required to conduct pre-submission and citizen participation activities prior to submitting an application. Refer to page 8 of the NOFA file for additional information.

Refer to the NOFA, Guide, and ApplicationTool files for additional application information.

Match Notes:

There are no stated matching requirements for this program.

A loan guarantee fee will be determined annually in the appropriation process. The fee will be a percentage of the loan amount, and may be paid with Community Development Block Grant (CDBG) funds, loan guarantee proceeds from this program, or other funds. The fee must be paid upon disbursement of the loan proceeds.

An advance fee of $70 will be charged per advance, and will be deducted automatically from every advance. The fee covers all reasonable expenses and disbursements made by the fiscal agent.

The principal security for the loan guarantee must be a pledge by the applicant public entity, or the state in the case of a non-entitlement public entity, of its current and future CDBG funds, as detailed on page 5 of the NOFA file.

Funding Notes:

An unspecified amount of funding is available to support loans through this program. The maximum loan amount will be calculated as follows:

• Entitlement public entities: up to five times the public entity's latest approved CDBG entitlement amount, minus any outstanding Section 108 commitments and/or principal balances on Section 108 loans
• State-assisted public entities/non-entitlement public entities: up to five times the latest approved CDBG amount received by its state, minus any outstanding Section 108 commitments and/or principal balances on Section 108 loans for which the state has pledged its CDBG funds as security
• Non-entitlement public entities eligible under the funding agency's Small Cities Program: generally up to five times the latest approved CDBG amount received by the state, minus any outstanding Section 108 commitments and/or principal balances on Section 108 loans for which the state has pledged its CDBG funds as security

The maximum repayment period for a loan is 20 years. The funding agency has the ability to structure the principal amortization to match the needs of the project and borrower, including periods of interest-only payments.

Interest rates charged on variable borrowing will be priced at the three-month Treasury Auction Bill rate, plus 35 basis points. Current rates can be found online at www.treasurydirect.gov/auctions/upcoming.

Fixed/permanent financing is linked to yields on U.S. Treasury obligations of similar maturity to the principal amount. A small additional basis point spread, depending on maturity, will be added to the Treasury yield to determine the actual rate.

The applicant's cost of administering a loan may be allocated to the CDBG administration cap of 20 percent, or the costs may be included as an activity delivery cost in carrying out the project.

Funds may not be used for:

• Duplicating funds available from the Federal Emergency Management Agency (FEMA), the Small Business Administration (SBA), or the U.S. Army Corps of Engineers (USACE)
• Projects that are not CDBG-eligible, including those listed on page 4 of the NOFA file
• The formation and operation of small businesses, including incubators and microenterprises