40166 Federal Register / Vol. 63, No. 143 / Monday, July 27, 1998 / Notices

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.

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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