[Federal Register Volume 63, Number 143 (Monday, July 27, 1998)]
[Notices]
[Page 40166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20103]



[[Page 40165]]

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Part III





Department of Housing and Urban Development





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Super Notice of Funding Availability (SuperNOFA) for Economic 
Development and Empowerment Programs; Economic Development Initiative 
(EDI) Program Funding; Announcement of Intention to Establish Future 
Community Development Block Grant Risk Reduction Pool Demonstration 
Using EDI Funds; Notice

  Federal Register / Vol. 63, No. 143 / Monday, July 27, 1998 /  
Notices  

[[Page 40166]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4363-N-03]


Super Notice of Funding Availability (SuperNOFA) for Economic 
Development and Empowerment Programs; Economic Development Initiative 
(EDI) Program Funding; Announcement of Intention to Establish Future 
Community Development Block Grant Risk Reduction Pool Demonstration 
Using EDI Funds

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice of Funding Availability; Supplemental notice.

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SUMMARY: The purposes of this notice are to: (1) announce HUD's 
intention to establish a Community Development Block Grant (CDBG) Risk 
Reduction Pool demonstration, as first discussed in the Economic 
Development Initiative (EDI) Program Section of SuperNOFA II, published 
on April 30, 1998; (2) notify the public that HUD intends to use $10 
million of the $38 million in FY 1998 funds available for the EDI 
Program to fund the CDBG Risk Reduction Pool demonstration. As a 
result, $28 million will be available for FY 1998 EDI grants under 
SuperNOFA II. HUD will issue a future notice that describes the details 
of the CDBG Risk Reduction Pool demonstration.

Application Due Date

    The application due date for EDI Program applicants is unchanged. 
Completed applications (one original and two copies) must be submitted 
no later than 12:00 midnight, Eastern time, on July 30, 1998 to the 
addresses listed in the EDI program section of HUD's Super Notice of 
Funding Availability for Economic Development and Empowerment Programs 
(SuperNOFA II), published in the Federal Register on April 30, 1998 (63 
FR 23876), and in accordance with the procedures of SuperNOFA II. 
Additionally, all other information concerning the EDI Program, as 
provided in SuperNOFA II published on April 30, 1998, remains unchanged 
except for the reduction in available funding for the FY 1998 EDI 
Program.

FOR FURTHER INFORMATION CONTACT: Stan Gimont or Paul Webster, Financial 
Management Division, Office of Block Grant Assistance, Department of 
Housing and Urban Development, 451 Seventh Street, SW, Room 7178, 
Washington, DC 20410; telephone (202) 708-1871 (this is not a toll-free 
number). Persons with speech or hearing impairments may access this 
number via TTY by calling the Federal Information Relay Service at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:

Economic Development Initiative Program

    The Economic Development Initiative (EDI) program was enacted in 
1994 and is intended to complement and enhance the Section 108 Loan 
Guarantee program. The purpose of EDI grant funds is to further 
minimize the potential loss of future CDBG allocations:
    (1) By strengthening the economic feasibility of the projects 
financed with Section 108 funds (and thereby increasing the probability 
that the project will generate enough cash to repay the guaranteed 
loan);
    (2) By directly enhancing the security of the guaranteed loan; or
    (3) Through a combination of these or other risk mitigation 
techniques.

SuperNOFA II

    On April 30, 1998, HUD published its Super Notice of Funding 
Availability for Economic Development and Empowerment Programs 
(SuperNOFA II) (63 FR 23876). SuperNOFA II set forth the consolidated 
program requirements and application process for ten (10) of HUD's 
Economic Development and Empowerment Programs, including the EDI 
Program.
    SuperNOFA II announced the availability of approximately $38 
million to fund EDI grants. The EDI Program section of SuperNOFA II 
advised that HUD was considering using $10 million of the available $38 
million in EDI funds for a CDBG Risk Reduction Pool demonstration. The 
EDI Program section provided that, in the event HUD intended to proceed 
with the risk pool demonstration, $28 million would be available for 
EDI grants under SuperNOFA II. The EDI Program section of SuperNOFA II 
also advised that HUD would publish a supplemental Federal Register 
notice announcing its decision to fund a CDBG Risk Reduction Pool 
demonstration.

CDBG Risk Reduction Pool Demonstration

    HUD will issue a future notice that describes the details of the 
CDBG Risk Reduction Pool demonstration. The notice is expected to be 
issued at the beginning of calendar year 1999. As discussed in the EDI 
Program Section of SuperNOFA II, the risk pool mechanism will be an EDI 
program enhancement designed to reduce the risk that CDBG funds will 
have to be used to repay Section 108 loans that finance economic 
development projects. The CDBG Risk Reduction Pool will allow public 
entities to pool economic development loans and related reserves. The 
CDBG Risk Reduction Pool will also assist public entities in satisfying 
the collateral requirements for Section 108 loans. The pool's reserves 
and incremental cash flows will provide an additional credit 
enhancement for the Section 108 loan and thereby help satisfy Section 
108 additional collateral requirements.

    Dated: July 22, 1998.
Saul N. Ramirez, Jr.,
Assistant Secretary for Community Planning and Development.
[FR Doc. 98-20103 Filed 7-23-98; 1:14 pm]
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