NMHC planner and grant writer Jeannie Mafnas told Variety, “We’re still looking into Sec. 108 loan with the U.S. Department of Housing and Urban Development.”
Section 108 Loan Guarantee Program is a source of financing allotted for the economic development, housing rehabilitation, public facilities rehabilitation, construction or installation for the benefit of low- to moderate-income persons, or to aid in the prevention of slums, according to the HUD website.
Mafnas said they are still unclear if they are going to proceed with the loan application.
“The board asked to do a financial analysis to see if the Section 108 loan guarantee is still feasible,” said Mafnas.
Mafnas said they would be presenting their financial analysis to the board and determine if the said loan would be feasible for the housing agency.
“Right now we are doing a detailed financial analysis,” said Mafnas.
She also told Variety that the housing agency is eligible to borrow up to five times its Community Development Block Grant program funds.
NMHC was last awarded $824,363 and previously it was $1.3 million.
In a previous board meeting, NMHC Administrator Joshua Sasamoto informed the board that the housing agency suffered a reduction in CDBG grant due the CNMI’s declining population.
He also told the board that they would be anticipating further fund grant cuts as the 2010 census was already out indicating further population decline.
Mafnas told Variety that the housing agency could borrow five times of their CDBG funds or about $4.1 million.
But Mafnas was aware that this comes with a caveat: the housing agency would need to repay this loan with future CDBG funds.
She said, “We’re still figuring out if we are going to borrow five times of our CDBG grant amount and how much time will take us for us to repay that.”
With a detailed financial analysis, Mafnas said they would try to see if the agency would be in deficit if they pursued applying for the said loan.
Asked if the amount they were planning to borrow from the Section 8 loan guarantee program would be enough to defray the cost of constructing the new school in Koblerville, Mafnas said they have yet to find out as the Public School System estimate was $8 million and they were still waiting for other estimates.
The loan, Mafnas acknowledged, was something new to the housing agency.
“It’s something new to housing [agency]. We still have to work with HUD for more guidance,” she said.
Should the NMHC proceed with obtaining the Section 108 loan, the prospect for other community projects to get funding through NMHC would be dim as NMHC would be tied down to doing the school project alone for the next three years and may put all other Community Development Block Grant projects on hold.
