"Thousands of communities throughout America will have a brighter economic future because of the legislation signed today," said Secretary Martinez. "HUD will work hand in hand with the Environmental Protection Agency to ensure neighborhoods have the greatest access to this funding, to protect the environment and to revitalize these communities."

Bush's budget request includes $25 million in funding for HUD's Brownfields Economic Development Initiative (BEDI). By combining grants with a low-cost guaranteed loan program, HUD helps state and local governments to convert abandoned or underutilized industrial sites into useful housing, commercial and industrial developments.

The seeds of one successful program in the City of Shenandoah took root last March when MidAmerica Housing Partnership (MAHP), located in Cedar Rapids, received more than $340,000 in HOME funds. The funds were awarded for a homeownership program, to be used as principal reduction mortgages (purchase money mortgages) for buyers with incomes at or below 80% of the area median income.

Roger Caudron, IFA Board Member, from Sioux City; Steven Adams, IFA Board Member, from Red Oak; Joe O'Hern, Director of the Iowa Fannie Mae Partnership Office, from Des Moines; Effie Lee Boggess, Iowa State Representative, from Clarinda; Greg Connell, Mayor of Shenandoah; Mary Schoen-Clark, President MAHP, from Cedar Rapids; and Mike Tramontina, IFA Executive Director, from Des Moines.

MAHP and the City of Shenandoah officially launched their partnership last November with a plan to build 6 units of single family housing on lots cleared by the city (this is part of an overall neighborhood revitalization effort that focuses on razing dilapidated housing in targeted neighborhoods). The City of Shenandoah also received a Local Housing Assistance Program grant from the Iowa Department of Economic Development to provide incentives to builders for infill construction. Contractors can receive up to $15,000 to be used for land acquisition, site preparation, down payment/closing cost assistance, and more. MAHP will use the HOME grant to buy the lots and pass on the savings to qualified buyers in the form of closing cost assistance. In addition to demolition and new construction, another partner, the Southwest Iowa Planning Commission, is administering an owner-occupied rehabilitation program for Shenandoah.

The Iowa Finance Authority (IFA) now offers low-cost construction loans to eligible borrowers for new construction or acquisition/rehabilitation of affordable, owner-occupied, single-family homes. The new low-interest financing program is the result of an innovative partnership between IFA and the Iowa FannieMae Partnership office. The intent is to spur affordable housing development in Iowa.

Another benefit of the IFA construction loan is that it gives MAHP the opportunity to streamline its fiscal management. Rather than juggling construction loans at several banks, the process is centralized. Local banks still play an important role, and are encouraged to develop and/or use secondary market products that provide long term, low down payment mortgages, such as Iowa First Home, Fannie Mae and Freddie Mac products.