Earlier this year, Antonio R. Riley, the Midwest Regional Administrator for U.S. Housing and Urban Development (HUD) announced that the department approved a $30 million loan guarantee for Cook County “to help finance four types of sustainable developments in the county.” According to a press release from HUD, the loan will provide funding for a range of Chicago development projects, from small business projects to larger scale transit projects. HUD defined these sustainable developments specifically as:
· Transit-oriented, mostly mixed-use development within a half mile of passenger rail
· Cargo-oriented projects near freight rail lines
· Mixed-use hospitality/service sector projects near transit lines
· Business Development loans
HUD hopes that its Section 108 Loan Guarantee Assistance Program will be a “powerful tool to drive economic development” in the Chicago area. Riley indicated that the approved $30 million in funds will help for-profit businesses in Cook County to carry out a variety of economic development schemes, which will benefit low-income and moderate-income residents in the city. In fact, Riley stated that the loan “is expected to create 600 new jobs” this year.
What is Sustainable Development in Chicago?
In Cook County’s application to HUD for the funding, it explains that its Department of Planning and Development “will administer this sustainable economic development initiative” and “will provide financing assistance for the economic development projects that qualify.” Who will qualify under the scheme? The County will work together with smaller communities and their organizations to determine eligibility for sustainable development projects, and they’ll partner up to “support these job-creating, economic developments.”
In fact, the City of Chicago actually has its very own Sustainable Development Division, which is “responsible for creating and expanding public open space systems” and “developing policies and programs to advance the sustainability of the City’s building, businesses, and urban form.” This division is part of Chicago’s Department of Housing and Economic Development.
It has some long-term projects underway, which include improvements to waterfront access, initiatives to expand certain natural habitats and to improve the green quality of development sites, and programs to promote the local food industry. While many of these aren’t the specific kinds of projects that the HUD loan will help to fund, they showcase Chicago’s interest in sustainable development, whether it deals with environmental and agricultural improvements, or transit-related initiatives that will be at the forefront of the $30 million loan.
What is the Section 108 Loan Guarantee Assistance Program?
Section 108 is part of a loan guarantee provision of the Community Development Block Grant (CDBG) program. It’s intended for communities that are strapped for cash but need money for housing rehab, distressed public facilities, and other large-scale development initiaives.
Aimed at projects like those underway through Chicago’s Sustainable Development Division, the Section 108 Loan Guarantee Assistance Program helps local governments to borrow funds from private investors at interest rates that are reduced from typical loans. With these lower interest rates, cities like Chicago can use the funds to “promote economic development, stimulate job growth, and improve public facilities.” The loan program is intended to encourage private contributions and seed money to large-scale public projects in distressed areas. It is HUD’s hope that the funding provided through this program might be able to “renew entire neighborhoods.”
If you have questions about acquiring a loan to purchase a foreclosure or other property in need of rehabilitation, contact an experienced attorney today.
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