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HUD Archives: News Releases
SECRETARY CUOMO WELCOMES PRESIDENT CLINTON’S PLAN FOR NEW $400 MILLION COMMUNITY EMPOWERMENT FUND
WASHINGTON – Housing and Urban Development Secretary Andrew Cuomo welcomed the announcement by President Clinton today that the President’s 1999 Federal Budget will propose $400 million for a new HUD Community Empowerment Fund to help economically distressed communities create and retain an estimated 280,000 jobs.
The Community Empowerment Fund would distribute $400 million in grants to states and local governments, which in turn would use the money to leverage an estimated $2 billion in private sector loans to businesses. The investment from the Community Empowerment Fund would be used to buy down interest rates on the private sector loans and to guarantee repayment of the loans. As a result, businesses in low-income communities would gain access to long-term, low-interest loans that are now unavailable.
The new initiative is designed to bring more jobs to areas of high poverty and unemployment and help create jobs for families trying to move from welfare to work, Cuomo said. Just 13 percent of the 14 million jobs created around the nation in the past five years are in central cities.
"President Clinton knows that the best way to fight poverty, revitalize our communities and strengthen our economy is to work in partnership with the private sector to create jobs and help American businesses grow," Cuomo said. "This new investment in America’s future will pay dividends for employers, for communities, and for people willing to work hard to build better lives for their families. It uses limited federal dollars as a powerful catalyst to stimulate far greater private investment in communities with the greatest need for economic growth."
The combined federal and private sector investment would go toward activities such as: revolving loan funds for business expansion and modernization; start-up funds for new small and medium-size businesses; preserving and expanding industrial facilities; neighborhood-based commercial revitalization efforts; and regional economic strategies.
The Community Empowerment Fund would improve and combine two existing HUD programs – the Economic Development Initiative and the Section 108 Loan Guarantee Fund – to promote economic development in distressed communities and bring economic opportunity to their residents. HUD has $38 million in the current year’s budget for competitive Economic Development Initiative grants – less than 10 percent of the funding the President is seeking for Community Empowerment Fund grants next year.
Examples of the past success of HUD’s Economic Development Initiative and Section 108 Loan Guarantee Funds include:
Content Archived: January 20, 2009