Community Development Block Grant Investment Tools in Iowa

State and Local Consulting

In the State of Iowa, The Cloudburst Group worked with the Economic Development Authority to assess the State’s economic climate, implement appropriate programs, and enable the State to reach their economic goals and potential.

The State of Iowa was struggling to use Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) funds to full capacity. Specifically, the State’s Section 108 program, a powerful HUD investment tool which enables local governments to turn a portion of their CDBG funds into large, federally guaranteed loans for use in economic revitalization projects, was being underutilized.

The program was stagnant, and consequently, many potential jobs were not being created. The Cloudburst Group was selected by the Iowa Economic Development Authority (IEDA) to work directly with their staff to examine the existing economic development climate throughout the state and to determine if the current CDBG economic development program was relevant and effective. The Cloudburst Group used this evaluation to define new program guidelines and appropriate policies that aligned with IEDA’s economic development strategies and goals. The primary objective throughout this process was to effectively target federal resources by promoting economic development and resilience that would provide new job opportunities for low- and moderate-income citizens across the State.

As a result of The Cloudburst Group’s recommendations and work, IEDA applied for Section 108 funds as a means to build capacity to implement the Governor’s priority: stimulate new and expanded business opportunities and promote job creation. The Cloudburst Group facilitated the development of a high impact Section 108 Loan program, including a clear program summary, “Business Guide,” to aid businesses use the program, application templates, and a Policies and Procedures Manual that included thorough underwriting guidelines and risk mitigation tools customized for economic development activities appropriate in Iowa.

Challenges encountered during the technical assistance (TA) included staff turnover during the process. The Cloudburst Group addressed this difficulty by meeting with the new staff personnel to review TA already provided, soliciting comments and input from the new staff personnel, and collaborating with them to ensure progress moving forward in applying for Section 108 assistance.

IEDA successfully accomplished a redesign of its economic development program that re-invigorated their previously underutilized program. The outcomes of increased economic development activities created new jobs after IEDA’s Section 108 application was approved by HUD in the summer of 2014. This process has replication potential in other communities struggling to achieve high impact with their Section 108 Loan programs.

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