|HUD Region V No. 12-095
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November 19, 2012
HUD MIDWEST REGIONAL ADMINISTRATOR ANNOUNCES $39 MILLION LOAN GUARANTEE TO INDIANAPOLIS
Department of Metropolitan Development to establish community and economic loan pool
CHICAGO - U.S. Housing and Urban Development Midwest Regional Administrator Antonio R. Riley announced today that HUD is approving a $39 million loan guarantee to the City of Indianapolis to establish a Community and Economic Development Loan Pool. The City's Department of Metropolitan Development (DMD) will originate loans to provide financing to support economic development, housing rehabilitation, public facility rehabilitation, construction and installation of equipment which will benefit persons of low- and moderate-income.
"HUD's Loan Guarantee Program can be a powerful tool to drive economic development in underserved areas. The city of Indianapolis will create jobs, support economic development and rehabilitate housing and facilities with this money," said Riley.
The City estimates that its Community and Economic Development Loans for business development, including working capital loans will create approximately 470 new full time equivalent jobs. The City anticipates making small business loans in targeted areas in the City, including its HUD approved Neighborhood Revitalization Strategy Area. At least 51 percent of the jobs created through the City's loan program will be made available to low- and moderate-income persons.
DMD expects to re-lend its Section 108 guaranteed loan proceeds to qualified third parties engaged in one of three broad categories: business, development and expansion, including light industrial development, working capital, and housing development. The City anticipates that some of its loans will also be used for providing financing for mixed use developments, e.g. retail and residential uses combined in multi-floor buildings and some light industrial development.
To implement CEDLP's lending procedures and process, DMD will establish an internal review team and an outside financial institution to underwrite the application and provide loan servicing.
HUD's Section 108 Loan Guarantee Assistance Program enables local governments to borrow money from private investors at reduced interest rates to promote economic development, stimulate job growth and improve public facilities. Such public investment is often needed to inspire private contributions, to provide seed money, or to simply boost confidence that many private firms and individuals need to invest in distressed areas. It allows them to transform a small portion of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects that can renew entire neighborhoods.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.