Congresswoman Sheila Jackson Lee along with the U.S. Department of Housing and Urban Development announce $198,400 Economic Development Initiative ("EDI") Grant that will be an important tool for the city of Houston to create jobs and provide access to capital for entrepreneurs and small businesses:
"Our citizens face many challenges to maintain or improve their quality of life and the EDI/108 funding is an important resource. EDI provides grants to local governments to enhance both the security of loans guaranteed through the Section 108 Loan Program and the feasibility of the economic development and revitalization projects they finance. A portion of this Grant money will be used to renovate a school building to house the African American Archive and Cultural Center.
"EDI has been the catalyst in the expanded use of loans through the Section 108 Program, one of the most potent public investment tools that HUD offers to local governments. Because Section 108 loans represent a potential risk to local governments' Community Development Block Grant (CDBG) allocations which governments pledge against potential repayment shortfalls, the EDI program offers communities a way to decrease the level of risk to their CDBG funds.
"HUD's Economic Development Initiative helps local governments manage and reduce this risk in at least two different ways. A local government may use an EDI grant to provide additional security for the Section 108 loan (as a loan-loss reserve or debt-service, for example), thereby reducing the exposure of its CDBG funds in the event of a default in loans made locally with the 108 funds.
"Or it may use this flexible grant to simply make the project more feasible by paying some of the project costs with grant funds or by reducing the interest rate to be paid from a revolving loan fund. Increasing access to capital for entrepreneurs and small business has emerged as a key component of the job growth strategy powered by the EDI grant program."