Title
Section 108 Loan Guarantee Application
Action
Action:
A. Approve the City of Charlotte’s application to the U.S. Department of Housing and Urban Development’s Section 108 Loan Guarantee program, and
B. Authorize the City Manager or his designee to execute all necessary documents required by the U.S. Department of Housing and Urban Development.
Body
Staff Resource(s):
Rebecca Hefner, Housing and Neighborhood Services
Warren Wooten, Housing and Neighborhood Services
Explanation
§ The city is submitting a Section 108 Loan Guarantee application for the U.S. Department of Housing and Urban Development’s (HUD) Section 108 Loan Guarantee program.
§ The program allows recipients of Community Development Block Grants (CDBG) to borrow low-cost, long-term, federally guaranteed funds to help fund CDBG-eligible projects by using a portion of their current and future CDBG allocations as guaranteed payment.
§ The most recent city participation in the program was the collaborative public-private partnership to redevelop the former Double Oaks development into the vibrant Brightwalk community.
§ The proposed application establishes the Charlotte Community Impact Investment Fund (Fund) to finance CDBG-eligible affordable housing initiatives and economic development projects.
- Eligible projects include property acquisition, rehabilitation, infrastructure improvements, and innovative homeownership models. All projects must benefit low- and moderate- income (LMI) residents and meet all other CDBG requirements.
§ The total Fund amount applied for is $25,000,000. Funds will only be drawn down from HUD as they are awarded to project recipients.
§ Funding will be made available to development partners through future Request for Proposals (RFP) and Request for Qualifications (RFQ) processes and will be provided to help finance approved projects in the form of loans (Loans).
- Loans will be secured by collateral that exceeds the value of the loan, primarily in the form of real estate, limiting risk to the city if CDBG allocations are reduced in the future.
- Staff will evaluate proposals and present funding recommendations to Council for review and approval.
§ Repayment of Loans will be used to repay the City’s Section 108 loan obligation.
§ The Application will be submitted to HUD on or before June 30, 2025. Once the application is approved by HUD, staff anticipates the first applications within 12 months.
Background
§ On April 7, 2025, the Housing, Safety and Community Committee discussed opportunities to encourage innovative approaches to housing affordability including the creation of the Fund by leveraging the city’s CDBG allocations through the Section 108 program.
§ On April 14, 2025, City Council held a public hearing on the city’s proposal to submit the Application. Notice of the hearing was published digitally with the Charlotte Observer and LaNoticia, and the draft Application was published on the city’s website with paper copies available upon request in English and Spanish. No comments were received.
§ The proposed Fund aligns with HUD’s national objectives for expanding affordable housing and promoting job creation and retention and the city’s Consolidated and Annual Action Plans for Housing and Community Development.
§ The proposed Fund supports the goals of the Housing Charlotte Framework and Affordable Housing Funding Policy to expand and preserve affordable housing, support family self-sufficiency and increase economic mobility, and broader Council goals around affordability, mobility, and economic growth.
Attachments
Attachment(s)
Section 108 Loan Guarantee Application