Section 108 Loan Guarantee Program


The Section 108 Loan Guarantee Program (Section 108) provides a source of low-cost, long-term financing for a large array of economic and community development projects, including economic development, housing, public facilities, infrastructure and physical development projects, as well as improvements to increase their resilience against natural disasters. This flexibility of applications makes it one of the most potent and important public investment tools that HUD offers to states and local governments.


CDBG rules and requirements apply in determining eligibility. Projects and activities must either principally benefit low- and moderate income (LMI) persons, aid in the elimination or prevention of slums and blight, or meet urgent needs of the community.

 Eligible public entity applicants:

Metropolitan cities and urban counties
Non-entitlement communities that are assisted in the submission of applications by States that administer the CDBG Program
Non-entitlement communities eligible to receive CDBG funds under the HUD-administered Small Cities CDBG Program (i.e. Hawaii). The public entity may be the borrower, or it may designate a public agency as the borrower

Eligible Section 108 Projects:

Acquisition of real property
Rehabilitation of publicly owned real property
Housing rehabilitation eligible under CDBG
Construction, reconstruction, or installation of public facilities (including street, sidewalk, and other site improvements)
Related relocation, clearance, and site improvements
Loan to for-profit businesses for economic development purposes
Payment of interest on the guaranteed loan and issuance costs of public offerings
Debt service reserves
Finance fees
Public works and site improvements in colonias
In limited circumstances, affordable housing construction

Role In Creative Placemaking

The program allows local units of government to leverage portions of their CDBG funds into federally guaranteed loans large enough to pursue physical and economic revitalization projects capable of redeveloping entire neighborhoods. The 2018-2022 HUD Strategic Plan outlines two important goals where the use of Section 108 can help communities meet them:

Goal 2B: Meet the Need for Quality Affordable Rental Homes: Expand the supply of affordable rental homes where they are most needed

Goal 4A: Build Inclusive and Sustainable Communities Free from Discrimination: Catalyze economic development and job creation, while enhancing and preserving community assets

These goals may incorporate creative elements or contribute to a larger creative placemaking effort.




Reading, PA, environmental remediation and redevelopment of the factory into a multi-purpose arts center

Springfield, MA, redevelopment of the historic Paramount Theater to create a performing arts center

Role in Creative Placemaking

This section represents our attempt to capture how this specific funding opportunity might fit into a placemaking initiative.


Who can apply? Eligibility is often limited, but in partnership with other entities you may identify an access point, such as subgrant opportunities. This information can help you determine which potential partners in your community might be able to access the funds.

Previous Projects/Grantees

These examples show how these funds have been used for creative or placemaking endeavors in the past, the types of organizations that have successfully accessed the funds and/or the types of activities for which the funds can be used.

Max Award

Maximum funding amounts can vary from year to year. We have provided the most recent information available. Where available, we also include a median or a range in cases in which the maximum is not typical of an average award.

Match Requirement

Most federal programs require some form of cost sharing. This is expressed differently for different agencies and programs. Sometimes a direct 1:1 match is specified. Other times, the application will state the maximum percentage of a project cost that the funding award can cover. We include this information, where available, in order to give you a sense of what to expect when applying for a particular funding program.


Most federal funding programs will require financial and progress reports at least annually, along with a final report. We consider this to be a "moderate" compliance burden. Where a higher degree of data collection and reporting is indicated, we convey that information with a "substantial" rating.