HUD To Issue Interim Rule Tomorrow on Use of Section 108 Loans for State CDBG Program.

Tomorrow's Federal Register will have an interim rule detailing the requirements for state CDBG programs to make HUD Section 108 loans on behalf of non entitlement communities. The rule is prompted by Recovery Act legislation.

The "Public Inspection" FR version of the interim rule is HERE. (Only the formatting will change when formally published tomorrow).

Excerpt:

This interim rule implements section 222 in Division I of the Omnibus Appropriations Act, 2009, Public Law 111-8 (2009 Appropriations Act). Section 222 authorizes HUD, to the extent of Fiscal Year (FY) 2009 loan guarantee authority, to provide community development loan guarantees, under section 108 of the Housing and Community Development Act of 1974 (HCD Act), to states borrowing on behalf of local governments in nonentitlement areas (governments that do not receive annual Community Development Block Grants (CDBG) from HUD). Section 108 authorizes HUD to guarantee notes issued by such nonentitlement local governments or their designated public agencies supported by the respective state’s pledge of its CDBG funds. Prior to the enactment of section 222, HUD lacked authority to guarantee notes issued by states on their behalf. State officials interested in applying for a loan guarantee commitment pursuant to this new authority should take note that HUD’s authority to issue such
commitments will expire on September 30, 2010 (and could be fully utilized by other borrowers before that date), unless the provision continues to be included in future appropriations acts.

Originally created and posted on the Oregon Housing Blog.