Sometimes those employee suggestion boxes can generate compelling ideas. Here’s one from an anonymous commenter at HUD’s public feedback site: Spark urban redevelopment by insuring local TIF commitments.
“Similar to mortgage insurance provided by FHA, HUD should request Congressional authority to insure private loans made using local TIF commitments as collateral. This insurance would stimulate private lending in urban areas, promoting HUD’s interest in strong urban cores through sustainable development, improve local property tax receipts, and create jobs.
“Such an insurance program would jump-start hundreds of millions, and potentially billions, of dollars in projects that have received commitments for future pay-ins from local TIF districts, but that cannot secure upfront private funding to initiate development. An insurance program would reduce the perceived risk of such loans by private lenders and immediately free-up the necessary debt financing.
“Since this would operate as an insurance program, the outcome of promoting sustainable urban development would be accomplished without the need for new spending. In fact, this program could be a profit center similar to current FHA programs.”
So, RealPoints readers … what do you think?
2 comments
I think this would be a tremendous idea and would really spur innovative financing options in this area. We are woefully behind some of the creative financing solutions that have been employed in other parts of the country. We need to be capitalizing on our relatively strong economy and championing ideas that will work and get development going, particularly in the areas of Dallas which are the hardest to develop.
Great idea. Would be very similar to HUD insurance on 221(d) apartment loan — HUD would underwrite the city’s future tax revenue growth — which might be difficult and would be subject to a lot of “politics” and concerns over HUD financing one city or area of the country over another.
If we are going to put the U (Urban) back in HUD, this would be a great step in right direction — particularly since HUD seems to be having difficulties getting beyond financing garden style apartments in the suburbs.