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Board hears options for using $3 million in loan funds; HUD guidance limits some uses of CDBG money
Summary
Board members were told the county has about $3 million in federal loan funds and that federal CDBG rules and HUD guidance constrain permissible uses; staff proposed focusing funds on projects meeting HUD national objectives such as infrastructure benefiting low- and moderate-income residents.
A staff report at the Greene County annual meeting said the county has roughly $3,000,000 in federal loan funds available to lend and that many outstanding loans will mature within two years, returning capital to the loan pool.
The report said the county has been exploring options for using Community Development Block Grant (CDBG) funds more actively because demand for reimbursable loans is currently low. “For the county's federal funds that we get to loan out, we have 3,000,000,” a staff member said, and noted that most loans will be repaid within two years.
Staff told the board that state agency guidance and U.S. Department of Housing and Urban Development (HUD) rules constrain how CDBG funds may be used. Staff summarized the guidance bluntly: “HUD guidance is very much like head in the sand. Just, you know, don't break the rules,” and said the county must design uses that satisfy HUD national objectives. The staff example given was using the funds for infrastructure line extensions tied to housing projects that would benefit low- and moderate-income individuals.
Board members discussed that using CDBG loan funds for small business loans may not meet HUD national objectives and therefore would be risky without a clear national-objective justification. Staff proposed developing a fund-balance spreadsheet and discussing program design at future meetings so the board can identify qualifying projects — for example, infrastructure or job-creation projects in highly impoverished areas that meet federal objectives.
No formal action to change CDBG program rules or reallocate funds was taken at the meeting. Staff said it will continue to work with state agencies and bring proposals to the board when ready.
