Section 108 Loan Guarantee Program: Announcement of Fee To Cover Credit Subsidy Costs for FY 2027
Key claim: HUD is raising the fee borrowers pay on Section 108 guaranteed loans from 0.58 percent to 1.05 percent for commitments awarded in fiscal year 2027, to cover the program’s credit subsidy costs if a statute requires or allows that fee.
Abstract
(Rule · Housing and Urban Development Department) This document announces the fee that HUD will collect from borrowers of loans guaranteed under HUD’s Section 108 Loan Guarantee Program (Section 108 Program) to offset the credit subsidy costs of the guaranteed loans pursuant to commitments awarded in Fiscal Year 2027 in the event HUD is required or authorized by statute to do so, notwithstanding subsection (m) of section 108 of the Housing and Community Development Act of 1974. The fee to offset credit subsidy costs is changing from 0.58 percent in Fiscal Year 2026 to 1.05 percent in Fiscal Year 2027.
Why this matters
Section 108 lets CDBG grantees borrow federally guaranteed funds for community and economic development projects, and the annual fee determines how expensive that capital is for cities, counties, and the developers they finance. Nearly doubling the fee for FY2027 raises borrowing costs for local housing, infrastructure, and economic development projects underwritten through the program, which can affect project feasibility at the margin.