FORT WORTH – The U.S. Department of Housing and Urban Development today announced that it is approving an $8 million loan guarantee to the City of Austin to establish a family business loan program that will make small business and micro loans to third-party, family owned business borrowers in the disadvantaged Saltillo neighborhood.
HUD’s Section 108 Loan Guarantee Assistance Program enables local governments to borrow money 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 the confidence private firms and individuals may need to invest in distressed areas.
“HUD’s Loan Guarantee Program can be a powerful public investment tool to drive economic development in underserved areas,” said HUD Secretary Shaun Donovan. “The program will be a boost to the City’s revitalization efforts and provide jobs for residents who need them most.”
The City will use its Section 108 Loan Guarantee financing to leverage private financing from lenders participating in the Federal Home Loan Bank (FHLB) and Small Business Administration (SBA) 504 loan programs. The program will seek to expand the capacity for commercial lending in the Saltillo neighborhood by providing financing for a variety of economic development activities. These activities are expected to create an estimated 160 permanent new full-time equivalent jobs, primarily for the benefit of low- and moderate-income persons, support the revitalization of areas within the Saltillo neighborhood and increase the tax base for the City.
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 or on facebook at www.facebook.com/HUD.