[Congressional Record Volume 140, Number 35 (Thursday, March 24, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      MULTIFAMILY HOUSING PROPERTY DISPOSITION REFORM ACT OF 1994

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                               speech of

                          HON. THOMAS J. RIDGE

                            of pennsylvania

                    in the house of representatives

                         Monday, March 21, 1994

  Mr. RIDGE. Mr. Speaker, I want to thank the leadership of the Banking 
Committee for including in this legislation my bill, the Community 
Enterprise Revitalization Amendments Act of 1994. This bill, H.R. 3793, 
makes changes to HUD's Section 108 Loan Guarantee Program to increase 
further the flexibility this program will offer to cities and counties.
  Section 108 has been an interest of mine for some years now. What the 
program does is allow those eligible for CDGB funding to receive HUD-
guaranteed loans for projects that could not tap directly into a CDBG 
grant. What makes the program work is that should the loan repayment 
not stay current, the locality's future CDBG moneys are turned back to 
HUD to cover the loan. Not only does this protect the taxpayer, but it 
forces local governments and project sponsors to work together to 
identify all means of making the loan good, so as not to lose the CDBG 
revenue stream. To date there have not been any defaults on section 108 
guarantees.
  Notably, section 108 guarantee authority remains woefully underused. 
Partly this is due to a lack of information, but partly it is due to 
the fact that we need to make the program more flexible for small 
cities such as my home of Erie. What my bill does is allow localities 
to turn back to HUD unused urban development action grant [UDAG] funds, 
many of which are too small to leverage projects by themselves, so that 
a portion of the old UDAG grants can be used to enhance the security of 
a new section 108 loan. This change will put limited dollars to work 
more efficiently.
  The bill also allows section 108 loan guarantees to back public 
facilities such as day care and Head Start, which will help meet 
expanding demand in this sector. In particular, many distressed 
communities need day care so parents can get up and go to work instead 
of waiting at home for a welfare check. We're only helping people to 
help themselves, in other words.
  Finally, the bill allows HUD to make changes in the financial markets 
so section 108 loans will be more attractive to investors. This 
authority is common to other housing and economic development programs 
already in place in HUD and quasi-public agencies.
  Mr. Speaker, I support this bipartisan housing bill, and look forward 
to implementing the section 108 changes and the other programs in H.R. 
4067.

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