BEDI Quick Facts

Information by State  Print version

Amount Allocated:

$32 million in 2007, maximum cap of $2 million per award

Application Due Date:

Eligible Applicants:

CDBG entitlement communities and non-entitlement communities eligible to receive loan guarantees*

Section 108 Application:

A request for new Section 108 loan guarantee authority must accompany each BEDI application. BEDI and Section 108 funds must be used in conjunction with the same economic development project.

Eligible Activities and CDBG National Objectives:

Each activity assisted with Section 108 loan guarantees and BEDI funds must meet one of the CDBG Program's three National Objectives:

	Benefit low and moderate income persons.
	Prevent or eliminate slums or blight.
	Address imminent threats and urgent community needs.

Uses of BEDI Grant Funds:

	Land Writedowns
	Site remediation Costs
	Funding reserves
	Over-Collateralizing the Section 108 Loan
	Direct Enhancement of the Security of the Section 108 Loan
	Provisions of Financing to For-Profit Businesses at a Below market Interest Rate

Limitations on Grant Amounts:

	Minimum BEDI to Section 108 ratio is 1:1
	Maximum grant amount is $2 million

Rating Factors:

	Capacity of Applicant and Relevant Organizational Experience
	Distress/Extent of the Problem
	Soundness of Approach
	Leveraging Resources/Financial Need
	Achieving Results and Program Evaluation

Empowerment Zones, Enterprise Communities and Showcase Communities:

*Non-entitlement communities, including those in Hawaii, may apply for and receive grants under the BEDI programs. In order to be considered for funding, however, a non-entitlement community must secure from the applicable state entity (or HUD, in the case of Hawaii), a pledge of Community Development Block Grant (CDBG) funds as partial security for the loan guarantee.

Program Description

Brownfields Economic Development Initiative (BEDI) grants enhance the security or improve the viability of a project financed with new Section 108 guaranteed loan authority. Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. Section 108 provides communities with a source of financing for economic development, housing rehabilitation, public facilities and large scale physical development projects. BEDI funds may be used for any eligible activities under the Section 108 Loan Guarantee program.

The purpose of BEDI funds is to minimize the potential loss of future CDBG allocations used to secure Section 108 loan guarantees:

1. By strengthening the economic feasibility of the projects financed with Section 108 funds (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 combination of these or other risk mitigation techniques.

HUD intends BEDI and Section 108 funds to finance projects and activities that will provide near-term results and measurable economic benefits, such as job creation and increases in the local tax base. BEDI funds can support a wide variety of activities. For example, a local government may use BEDI fund to address site remediation costs, or a local government may use a combination of Section 108 and BEDI funds to acquire a brownfield property and convey the site to a private sector party at a discounted price from its purchase price. The redevelopment focus for BEDI-assisted projects is prompted by the need to provide additional security for the Section 108 loan guarantee beyond the pledge of CDBG funds.

There are certain limitations on the use of BEDI grants and Section 108 funds. BEDI funds may not immediately repay the principle of a loan guaranteed under Section 108. BEDI funds shall not be used to provide public or private sector entities with funding to remediate contamination caused by their actions. Applicants may not propose sites listed or proposed for listing on EPA's National Priority List (NPL); sites subject to unilateral administrative orders, court orders, administrative on consent, or judicial consent decrees issued or entered under CERCLA, and facilities that are subject to the jurisdiction, custody or control of the federal government. Further, applicants are cautioned against proposing projects on sites where the nature and degree of environmental contamination is not well-quantified or are the subject of on-going litigation or environmental enforcement action.

HUD encourages local communities to integrate projects proposed for assistance under HUD's BEDI and Section 108 program with other federal, state and local brownfields redevelopment efforts.

For a BEDI application kit and/or guidebook to all HUD programs, please contact the SuperNOFA Information Center at 1-800-HUD-8929. Persons with hearing or speech impairments may call the Center's TTY number at 1-800-HUD-2209. Questions regarding the BEDI program may be directed to David Kaminsky in HUD's Office of Economic Development at (202) 402-4612.