HUD JOINS BANKS TO START NEW LOAN FUND TO CREATE JOBS AND ECONOMIC DEVELOPMENT IN MASSACHUSETTS

U.S. Housing and Urban Development Secretary Andrew Cuomo and Congressman John Olver of Massachusetts today announced a new $5.9 million business loan fund to promote job creation and economic development in Norfolk, Middlesex and Worcester Counties in Massachusetts.

The Mezzanine Capital Fund is expected to create 200 to 400 jobs in the counties within the next 10 years and more jobs in the years ahead as loans are repaid and made to additional businesses. Most of the jobs are expected to go to people with low and moderate incomes.

The revolving loan fund will benefit small businesses with significant growth prospects that are unable to obtain full bank financing or venture capital because they lack sufficient collateral or because of their size. The fund is being created with:

• A $2.9 million loan guarantee that HUD awarded to the Massachusetts Department of Housing and Community Development and the Town of Winchendon.

• A pledge of $3 million in loans by five Massachusetts banks. The banks are: BankBoston, Fleet Financial Group, State Street Bank and Trust Co., U.S. Trust Corp., and Boston and Eastern Bank of Lynn.

"This new loan fund will strengthen HUD's partnership with businesses and local communities in Massachusetts," Cuomo said. " It will use HUD funds as a catalyst to stimulate far greater private investment that will create more jobs and improve local economies."

"I am pleased to have advocated on behalf of the Town of Winchendon," Olver said. "This $2.9 million Section 108 Loan from the U.S. Department of Housing and Urban Development represents an engine for economic development by providing needed capital to local businesses who are creating or retaining jobs. I hope this important investment will be the beginning of many partnerships between the federal government and our local communities here in Massachusetts."

HUD Assistant Secretary for Community Planning and Development Saul Ramirez , representing Cuomo, joined Olver at a news conference in Winchendon to announce the new loan fund.

The fund is the first in Massachusetts to bring together the economic development actions of state, federal, county and local governments to achieve a broader scope of assistance to private businesses.