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The Section 108 program operates the loan guarantee portion of the Community Development Block Grant (CDBG) program. Specifically, Section 108 allows CDBG grantees to transform a portion of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew entire neighborhoods. This article presents findings from an analysis of Section 108 projects funded in fiscal years 2002–2007, including financing details, funded activities, and project outcomes. The study is designed to answer the following three core issues: (1) What types of projects are being funded, and what is the nature of those projects? (2) How are Section 108 projects funded, and how are they repaid? (3) What outcomes did the investments produce? In sum, the study team found that Section 108 is an important tool for community development because it allows jurisdictions to pursue larger projects with outcomes that cannot be funded through annual CDBG grants; yet, the complexity and size of Section 108 projects mean that local capacity and support are vital to the successful planning and completion of these projects.
Acknowledgments
The authors gratefully acknowledge the many important contributions that others made to this study. We would like to thank the individuals who responded to the survey or agreed to be interviewed. We appreciate the assistance we received from Paul Webster, the director, and Hugh Allen, the deputy director of the Financial Management Division, as well as their staff, who provided much of the needed information for the study. We would also like to thank the HUD Community Planning and Development field-office staff members and grantees in Philadelphia, Oklahoma City, Seattle, San Diego, and Boston who generously helped us understand their approach to management and program implementation. We thank Judson James, Kevin Neary, and Carol Star of the Office of Policy Development and Research for guidance, feedback, and assistance on all aspects of this study. Finally, we want to acknowledge the individuals who contributed to an earlier report about the Section 108 program: Ryan Sullivan, Martin Abravanel, Kassie Bertumen, Nancy Pindus, Chris Walker, and Roger Frankoff.