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Community development financing is available through grants, loans, and municipal bonds, often set up by governments and private businesses. Funding is awarded to community development groups for projects such as housing and urban development, with loans also available for large-scale projects. Municipal bonds are issued by government-run groups for community building and improvement efforts.
Community development (CD) financing is primarily through grants, loans, and the issuance of municipal bonds. In many cases, funding made available for community development programs has been deliberately set aside for the purpose of granting and lending. In order to access these types of community development funding, however, a formal application usually must be submitted through a loan process or grant application.
Plans to support communities are usually supported by community development groups focused on things like economic development and community policy making. Governments and private businesses that have an interest in supporting these community planning efforts often set up special funds for this very purpose. Some are set up as grant programs, while others are offered as loans.
Community development funding is often awarded directly by a government to an area’s official community development group. In turn, the group sometimes establishes its own grant fund and invites those interested in supporting the CD Group’s goals to apply for a portion of those funds to facilitate special programs for things like housing and urban development. Organizations such as schools and social institutions often apply for these types of grants to better serve the communities in which they are located.
Loans can also be granted directly by businesses operating in a community. Most of the companies that offer community development financing are large corporations that have set up special funds for charitable donations in a particular area. This type of funding is often disbursed directly to pre-screened non-profit organizations or may be offered to a group in an effort to establish a community policy that benefits the company’s core client base.
Loans are another method of financing community development. Sometimes banks and lenders make loans to individual community development programs. Often this type of community development funding is used to facilitate large projects, such as the renovation of a civic center or the construction of a new highway system. Projects of this scale are often funded by multiple grant and loan programs to ensure sufficient capital to support timely completion.
Municipal tie-ups are also sometimes created for community development funding of large-scale projects. These are only issued by government-run community development groups. Investors buy a municipal bond with the expectation that it will mature into a bond within a specified time period after which it will be repaid. During that time, however, this type of community development funding is used by a group to carry out a community’s building and improvement efforts.
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