HUD's Office of Community Planning and

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CDBG ED Project Decision Process 1. Determine eligibility 2. Check that it is not ineligible 3. Make sure a national objective will be met 4. Ensure compliance with other specific requirements • Examples . . . – Public benefit test (Special ED & some infrastructure) – Project Underwriting (assistance to a for-pr<strong>of</strong>it) 28
Qualifying ED Activities 29
Page 2 and 3: Welcome • HUD’s Office of Commu
Page 4 and 5: Learning Objectives • Be familiar
Page 6 and 7: Agenda (cont) • Day 3 • Infrast
Page 8 and 9: ECONOMIC DEVELOPMENT STRATEGIES (TO
Page 10 and 11: Overview of Economic Development
Page 12 and 13: The Process Economic Analysis Evalu
Page 14 and 15: Economic Analysis • Assess qualit
Page 16 and 17: Strategy Options CDBG 108 Other Fed
Page 18 and 19: Implementation • Describe goals
Page 20 and 21: Summary: ED Strategies • Economic
Page 22 and 23: Topics • CDBG history background
Page 24 and 25: Primary Purpose • Develop viable
Page 26 and 27: “Companion” Programs to CDBG
Page 30 and 31: Typical CDBG-Funded ED Activities
Page 32 and 33: Eligible Activities • Wide variet
Page 34 and 35: Eligible Activities - ED Projects T
Page 36 and 37: Special Econ. Development • Comme
Page 38 and 39: Commercial Rehab • Limited types
Page 40 and 41: Special Activities by CBDOs • Typ
Page 42 and 43: Planning and Capacity Building •
Page 44 and 45: ACTIVITY: DETERMINING PROJECT ELIGI
Page 46 and 47: National Objectives 570.208 All CDB
Page 48 and 49: LMI: Area Benefit • Activity that
Page 50 and 51: Documenting Area Benefit • Bounda
Page 52 and 53: Job Training, Placement, or Support
Page 54 and 55: LMI: Housing Activities • Permane
Page 56 and 57: LMI: Job Creation & Retention • A
Page 58 and 59: Job Retention with LMI Benefit •
Page 60 and 61: Counting Jobs • Each business tra
Page 62 and 63: Counting Jobs • Count all jobs cr
Page 64 and 65: Documenting Job Creation • When
Page 66 and 67: Determining Income Status - Written
Page 68 and 69: Slum & Blight: Area Basis • Activ
Page 70 and 71: Slum & Blight: Spot Basis • Activ
Page 72 and 73: Urgent Need • Activities that all
Page 74 and 75: ACTIVITY: MEETING NATIONAL OBJECTIV
Page 76 and 77: Limitations on Job Relocation • J
Page 78 and 79:
Faith-Based Organizations • Final
Page 80 and 81:
570.209 Public Benefit Standards
Page 82 and 83:
Test at Two levels • Individual S
Page 84 and 85:
Aggregate Standards • Create/reta
Page 86 and 87:
Projects Automatically Fail Individ
Page 88 and 89:
Summary: CDBG Foundation • Three
Page 90 and 91:
REVITALIZATION STRATEGY AREAS (TOOL
Page 92 and 93:
Revitalization Strategies • Writt
Page 94 and 95:
• Area must be: - Contiguous - Pr
Page 96 and 97:
Assessment • Describe economic co
Page 98 and 99:
Benchmarks • Must describe measur
Page 100 and 101:
Review & Approval • Submitted wit
Page 102 and 103:
SMALL BUSINESS DEVELOPMENT (TOOLKIT
Page 104 and 105:
SMALL BUSINESS DEVELOPMENT 104
Page 106 and 107:
What Is a Small Business? • Not u
Page 108 and 109:
Technical Assistance • Business c
Page 110 and 111:
Typical Training & TA Providers •
Page 112 and 113:
Financial Assistance • Types of A
Page 114 and 115:
MICROENTERPRISE ASSISTANCE 114
Page 116 and 117:
Microenterprise Assistance • Fina
Page 118 and 119:
National Objective • Limited Clie
Page 120 and 121:
Key Steps In Setting Up Program •
Page 122 and 123:
Key Steps • Design TA and trainin
Page 124 and 125:
BUSINESS INCUBATORS 124
Page 126 and 127:
Benefits of Incubators • Help red
Page 128 and 129:
Financial Burden • Incubator is a
Page 130 and 131:
Funding Incubator Construction •
Page 132 and 133:
Evaluating Incubator Applications
Page 134 and 135:
Summary: Incubators • TA is impor
Page 136 and 137:
JOB TRAINING & OTHER PUBLIC SERVICE
Page 138 and 139:
What Is Job Training? • Help unem
Page 140 and 141:
Other ED Public Services • To sup
Page 142 and 143:
Who Can Undertake Training? • Gra
Page 144 and 145:
National Objective • Training as
Page 146 and 147:
Key Steps • Conduct a needs asses
Page 148 and 149:
Summary: Job Training • Job train
Page 150 and 151:
LARGE-SCALE COMMERCIAL DEVELOPMENTS
Page 152 and 153:
What Are Large-Scale Commercial Dev
Page 154 and 155:
CDBG Roles • Financing to busines
Page 156 and 157:
Special ED Activities • Acquisiti
Page 158 and 159:
National Objective • Job creation
Page 160 and 161:
Key Steps in Design • Determine i
Page 162 and 163:
INFRASTRUCTURE (TOOLKIT CH 7) 162
Page 164 and 165:
What Is Infrastructure? • Non-hou
Page 166 and 167:
Privately Owned Utilities • Cover
Page 168 and 169:
Ineligible Infrastructure Activitie
Page 170 and 171:
Special Assessments (cont) • If a
Page 172 and 173:
Special Assessments Are Not • Not
Page 174 and 175:
National Objective (cont) • Low/M
Page 176 and 177:
Key Steps • Decide if want to tar
Page 178 and 179:
Summary: Infrastructure • Public
Page 180 and 181:
Topics • Financing options • Re
Page 182 and 183:
Methods of Financing • Grants •
Page 184 and 185:
Equity • Contribution of cash or
Page 186 and 187:
Debt Options • Direct loans - Sub
Page 188 and 189:
Contingent Payment Loans • “Def
Page 190 and 191:
REVOLVING LOAN FUNDS 190
Page 192 and 193:
Typical Borrowers • Existing busi
Page 194 and 195:
Steps: Market & Client Scan • Con
Page 196 and 197:
Step: Select Administrative Entity
Page 198 and 199:
CDFIs 198
Page 200 and 201:
Definition of a CDFI • Specialize
Page 202 and 203:
CDFIs & CDBG • Job creation/reten
Page 204 and 205:
UNDERWRITING (TOOLKIT CH 9) 204
Page 206 and 207:
Underwriting Defined • Underwriti
Page 208 and 209:
HUD Appropriateness Criteria • Tw
Page 210 and 211:
Risks: Inflated costs Understated c
Page 212 and 213:
Necessity of Public Funding • Sho
Page 214 and 215:
Reasonable Return & Terms • Loan
Page 216 and 217:
Public Benefit Test • Applies to
Page 218 and 219:
Public Benefits: Aggregate Portfoli
Page 220 and 221:
Two Primary Types of ED Lending •
Page 222 and 223:
Underwriting Business Loans • Abi
Page 224 and 225:
Debt Coverage Ratio Guidelines •
Page 226 and 227:
What Is Value? Fair market value Li
Page 228 and 229:
General Guidelines: LTV • Commerc
Page 230 and 231:
Commitment • Commitment by owners
Page 232 and 233:
Management • Must be experienced
Page 234 and 235:
Small Startups • Likely to have a
Page 236 and 237:
Underwriting Real Estate Loans •
Page 238 and 239:
Collateral • Use Loan-to-Value Ra
Page 240 and 241:
Experience • Be certain developme
Page 242 and 243:
Summary of Appropriateness • Good
Page 244 and 245:
History of Appropriateness Criteria
Page 246 and 247:
Risks: Inflated costs Understated c
Page 248 and 249:
Gap Analysis • Financing gap •
Page 250 and 251:
Rate of Return + Reasonable cost -
Page 252 and 253:
Project Feasibility & Return • Te
Page 254 and 255:
Summary: Underwriting • CDBG has:
Page 256 and 257:
SECTION 108 (TOOLKIT CH 10) 256
Page 258 and 259:
SECTION 108 OVERVIEW 258
Page 260 and 261:
How much can communities borrow?
Page 262 and 263:
Advantages of 108 • Leverage - Ac
Page 264 and 265:
Eligible Activities • Acquisition
Page 266 and 267:
Program Requirements • National o
Page 268 and 269:
Section 108 Guarantee HUD Guarantee
Page 270 and 271:
Players & Roles • Community • H
Page 272 and 273:
Risks of Using Section 108 • Loan
Page 274 and 275:
Risk Management • Avoid construct
Page 276 and 277:
• Covers early payment Defeasance
Page 278 and 279:
Overview of Process • Screen proj
Page 280 and 281:
Application Types • Generic Appli
Page 282 and 283:
Citizen Participation • Provide a
Page 284 and 285:
HUD Review • Review by area offic
Page 286 and 287:
Disbursing & Servicing • Custodia
Page 288 and 289:
RELATED INITIATIVES 288
Page 290 and 291:
Brownfields & BEDI • Brownfields:
Page 292 and 293:
PROGRAM ADMINISTRATION (TOOLKIT CH
Page 294 and 295:
PROGRAM DESIGN & ADMINISTRATION 294
Page 296 and 297:
Typical Roles in ED Programs • In
Page 298 and 299:
Policies & Procedures • Recommend
Page 300 and 301:
Marketing • Develop a rollout str
Page 302 and 303:
Program-Wide Records • Consolidat
Page 304 and 305:
Financial Records • Bank records,
Page 306 and 307:
Subrecipient • Subrecipient appli
Page 308 and 309:
HUD REPORTING 308
Page 310 and 311:
Objectives • Suitable living envi
Page 312 and 313:
Indicators & Reporting • Grantees
Page 314 and 315:
Job Reporting (cont) • For job re
Page 316 and 317:
Businesses Assisted Reporting (cont
Page 318 and 319:
MEASURING ED PROGRAM SUCCESS 318
Page 320 and 321:
Monitoring • Grantees are respons
Page 322 and 323:
Monitoring Actions • Technical As
Page 324 and 325:
Summary: Administration • CDBG ED
Page 326:
Wrap Up • Final questions • Eva
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HUD's Office of Community Planning and

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