Section 108 HUD Loan

Sorry this loan is really driving me crazy..... Currently we are using unexpended CDBG funds, but eventually when we run out of unexpended of expended CDBG funds , how do we pay back the loan?

I went on the HUD website:

Loan Security

The principal security for the loan guarantee is a pledge by the applicant public entity or the State (in the case of a nonentitlement public entity) of its current and future CDBG funds. Additional security will also be required to assure repayment of guaranteed obligations. The additional security requirements will be determined on a case-by-case basis, but could include assets financed by the guaranteed loan.


In other words once the unexpended CDBG funds are spent then are current CDBG fund allocations will be cut to cover the payment. We need to take a look back at how we thought we were going to pay back this loan to avoid making this mistake again.