HUD Section 108 Loan Guarantee: Compliance Requirements

Borrower must track all Section 108 loan expenditures and program accomplishments in HUD's Integrated Disbursement and Information System (IDIS) and report outcomes similar to other CDBG activities.

Deadline: Throughout loan period; data entered at activity setup and updated annually during performance period

Source: Notice CPD-17-04; HUD Exchange Section 108 program guidance

Borrower must include Section 108 accomplishments in the annual Consolidated Annual Performance and Evaluation Report (CAPER), including loan amount, amount advanced, total CDBG investment, jobs estimated/created/retained, and housing units assisted.

Deadline: By CAPER submission deadline each program year

Source: HUD Section 108 Program Eligibility Requirements; 24 CFR 570 CDBG regulations

For activities with commitments made after November 30, 2020, borrower must report Section 3 labor hours (including zero hours) in IDIS for every program year the activity remains open, including total labor hours, apprenticeship hours, and trainees.

Deadline: Section 3 data must be entered before activity can be marked complete in IDIS; annually for open activities

Source: CPD Notice on Section 3 compliance; 24 CFR 75.25(a); 24 CFR part 135

Borrower must pay the Section 108 loan guarantee fee (set annually through appropriations) upon disbursement of loan proceeds. Fee may be paid with CDBG funds, Section 108 proceeds, or other funds.

Deadline: Upon disbursement of the first loan advance

Source: 24 CFR 570.705(g); HUD Section 108 financing guidance

Borrower must submit a drawdown voucher request to the HUD Section 108 office for each loan advance; HUD approves the draw and funds are wired to borrower's account.

Deadline: Funds advanced the Wednesday following HUD approval of advance request

Source: HUD Exchange Section 108 program guidance on disbursement process

Borrower must comply with all applicable CDBG and federal procurement rules (24 CFR Part 570 and 2 CFR Part 200) when procuring goods, services, or construction with Section 108 funds, including competitive bidding requirements.

Deadline: Prior to each procurement action

Source: 24 CFR 570 CDBG Procurement standards; 2 CFR Part 200.320 et seq. (Uniform Guidance procurement standards)

Borrower must submit and maintain required loan contract documentation including bank agreements, monthly bank statements, and security documents to demonstrate compliance with loan contract provisions.

Deadline: Continuously maintained; required upon HUD request or annual monitoring review

Source: HUD OIG audit findings and recommendations; HUD Section 108 loan contract requirements

Borrower must ensure all Section 108-financed activities meet a CDBG national objective (benefit to low/moderate-income persons, elimination of slums/blight, or urgent community development need) and comply with CDBG program rules for eligible activities.

Deadline: National objective must be documented at project approval; compliance monitored throughout loan period

Source: 24 CFR 570.704 and 570.705; CDBG statute Section 108; HUD Section 108 application requirements