Section 498-16-3 - ECONOMIC DEVELOPMENTA. DEVELOPMENT FUND The Development Fund (DF) Program provides funding to local governments which in turn assist businesses to create jobs for low and moderate income persons.
1. Threshold Criteria: (a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive DF funds. County governments may apply on behalf of unorganized territories.(b) 51% of the jobs created or retained as a result of DF expenditures proposed by the applicant are provided to persons of low and moderate income;(c) the cost per job created or retained with DF funds shall not exceed $35,000.(d) complete the required DF application materials.2. Special Program Requirements: DF proposals must comply with the following: (a) Necessary and Appropriate: A DF loan to a for-profit business must be for projects that are necessary and appropriate. The application must describe the need for DF assistance, reasonableness of the amount requested, the repayment plan, and assurance that the assistance provided is commensurate with the community benefits that will accrue from the project. Documentation must be provided that the project cannot proceed without DF participation.(b) Financing Plan: The DF application should present a financing plan for a project in which the DF loan comprises the lesser of $100,000 or 40% of total project cost. Project activities and use of funds to calculate the non-DF financing must represent a new investment or a new project. The financing necessary to support at least 60% of the total project cost must be documented by binding commitment letters submitted with the application. Project activities or uses of funds used to calculate the non-DF financing also must represent new investment.(c) DF Loan: The DF is provided as a grant to a unit of local government. The local government must use designated grant monies as a loan to the business or the developer identified in the DF application. The loan must be provided under the terms stated in a DF Letter of Conditions and the contract between DECD and the local government.(d) Repayment Terms: Justification for the repayment terms relate to filling the financing gap, identifying the rate of return allowed through the repayment terms, or specifying the locational cost differentiations and the benefit derived from the assistance.3. Selection Process: The DF project will be evaluated as a viable business proposal. The following will be considered: (a) Strategy Priority: The Development Fund program will give priority to business activities that support the state's economic development strategy. The Development Fund will, whenever possible, be targeted towards economic sectors identified in the strategy.(b) Chance of Success: The project demonstrates that a market exists for its product or service, the cost of the product or service is competitive in current market conditions, the cash flow projections are adequate to support operating expenses and indebtedness, and management has the capacity to carry out the business or development plan. The project must be complete in that there are no unidentified activities or project costs necessary to implement the project.(c) Financial Plan: The financing for the project is in place and legally binding commitments have been submitted; the proposal has an appropriate leverage ratio of private and public dollars and is structured to meet cash flow projections; and the project pro forma has been reviewed by an independent qualified financial professional. The financing plan must be complete in that there are no unidentified uses of funds necessary to complete the project.(d) Equity: The proposed loan recipient has made an equity commitment to the project, preferably through a cash injection. Other substantial participation may substitute for a cash equity injection with appropriate explanation regarding equity participation.(e) DF Loan repayment: Terms of the loan repayment are to reflect what is necessary to allow a project to be implemented while providing the maximum and most expeditious return of CDBG DF monies for reuse.(f) Security: The proposed loan recipient presents collateral appropriate to secure the DF Loan and indicates willingness to enter into security agreements.(g) Benefit: The DF proposal will be evaluated on the basis of the community and economic benefits that will result from the project.(h) Cost: The number of permanent jobs created or retained as per DF project dollars will be compared with current and past DF projects. The increase in local tax dollars resulting form the project will be evaluated. Overall project cost effectiveness also will be considered.(i) Low and Moderate Income Benefit: Benefit to LMI persons will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from Joint Training Partnership Act and Job Service will also be reviewed.(j) Community and Economic Development: The primary and secondary impacts of the DF project on the community's plans for future economic development will be evaluated. The review will also examine the ripple effect of the proposal on the community as a whole.4. Approval Process:(a) Application: Applications shall be submitted by the first Thursday of each month. DECD staff will review the applications to determine if the threshold criteria have been met. A credit analysis will be conducted by DECD or its designee for each proposal. Following staff analysis, applications will be evaluated by a review committee. As a review body, the DF Committee will make recommendations to the Director of the Office of Business Development . The DF Committee is appointed by the Director and consists of a representative of local government, a certified public accountant, an attorney, a representative of private financing, a business person, and two at-large appointees.(b) DF Committee Recommendations: The DF Committee will review staff reports and make recommendations to the Director for awards. The Committee will have four general options to recommend on any individual project. The options are:(i) approval of requested amount and terms;(ii) approval of requested amount but under different terms;(iii) rejection with staff recommendation for complete/partial resubmission; and(c) Quarterly Allocation: The allocation will be limited to $300,000 per quarter, plus any unobligated portion of allocations of previous quarters. This limit can be waived by the Director of OBD. The Director also reserves the right to reject any or all applications in any quarter.B. REGIONAL ASSISTANCE FUND The Regional Assistance Fund (RAF) Program provides financial resources to local governments or regional organizations which can use the RAF assistance as leverage to obtain funds under the Economic Development Administration (EDA) Economic Adjustment Assistance Program (Title IX) and the EDA Public Works Program (Title I) or the Rural Economic Community Development (RECD), Rural Business Enterprise (RBE) Grant and the Intermediary Relending Program (IRP) and/or other Federal, State, and private programs. The purpose of the RAF is to bring additional money into the State and therefore RAF cannot be used as match with the State's Small Cities CDBG program or conventional lending institutions.
1. Threshold Criteria:(a) Eligible Applicants: All units of general local government in Maine, including plantations and Counties, are eligible to apply for and receive a RAF grant. County governments may also apply on behalf of unorganized territories. Groups of local governments may apply for a multi-jurisdictional or joint RAF project. Multi-jurisdictional applications require designation of one local government as the lead applicant and consent for that designation by each participating local government.(b) 51% of the jobs created or retained as a result of CDBG expenditures proposed by the RAF applicant are provided to persons of low and moderate income;(c) be designated by the appropriate organization providing matching funds eligible to receive funds; and(d) complete the required RAF application materials.2. Special Program Requirements: RAF proposals also must comply with the following: (a) RAF Funds: Provided an initial RAF application is successful, a grant contract will be executed between DECD and the local government to reserve RAF funds for the applicant, and a RAF Letter of Conditions will be included in the contract to describe the terms that will govern the release of funds from the reserve. The local government must use the designated RAF funds as a match to leverage additional funds.(b) Limit on Amount of RAF assistance: Each economic development district will be eligible for one RAF grant per year. Additional grants within districts will be made at the discretion of the Director of Office of Business Development (OBD). The RAF application must present a plan in which the RAF funding comprises the lesser of $200,000 or up to 100% of the matching funds required from the local government. The local government must also demonstrate that it is not possible to get funding from any other source for the portion of matching funds sought from the RAF.(c) Program Income Plan: Thresholds regarding interest rates or repayment terms for RAF assistance to revolving loan funds have not been established. Justification for the repayment terms relate to filling the financing gap, identifying the rate of return allowed through the repayment terms, or specifying the locational cost differentiations and the benefit derived from the assistance. To meet matching requirements, program income generated from RAF funds may be retained by the local grantee or by the local grantee's assignee with the approval of DECD.(d) Community Financial Commitment: Wherever appropriate the community must demonstrate a vested financial interest in the development project, ranging up to 33% of CDBG funds3. Selection Process: The RAF project will be evaluated as a viable CDBG proposal. The following considerations will be the focus of the Impact factor. (a) Financial Plan: The financing need for the project will be based on an assessment of its financial resources. The proposal must have an appropriate leverage ratio of private and public dollars.(b) Benefit: The RAF proposal will be evaluated on the basis of the community and economic benefits that will result from the project.(c) Cost: The number of permanent jobs created or retained as per RAF project dollars will be reviewed on a case by case basis. The increase in local tax dollars resulting from the project will be evaluated. Overall project cost effectiveness also will be considered.(d) Low and Moderate Income Benefit: Benefit to low and moderate income persons and families will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from Job Training Partnership Act and Job Service will also be reviewed.(e) Community and Economic Development: The primary and secondary impacts of the RAF project on the community's plans for future economic development will be evaluated. This review will also examine the ripple affect of the proposal on the community as a whole.(f) Local Commitment: The commitment of local funds to the project.4. Approval Process:(a) Application: Once the applicant has submitted a pre-application to the appropriate agency and is working toward a full application, it may submit a RAF pre-application to DECD. DECD staff will review the RAF pre-applications on a first come basis to determine if the threshold criteria and special program requirements have been met. If so and when the application process has been successfully completed, the applicant will be invited to continue into the project development phase where the CDBG part of their project will be more fully developed. An analysis will be conducted by DECD or its designee for each proposal.(b) Staff Recommendations: Following the project development analysis, staff will make one of the following three recommendations to the Director of the OBD for awards: (i) approval of requested amount with requested or different terms:(ii) approval of lesser amount with requested or different terms; or,(c) Allocation: The RAF allocation will be $1,000,000. RAF proposals that meet all criteria may be awarded funds until the amount of funds available in the program has been committed. Having committed all funds in the program, OCD reserves the right not to accept any further applications.C. MICRO-LOAN PROGRAM The Micro-Loan Program (ML) provides communities with funds to assist existing and new businesses to create and/or retain jobs for low and moderate income persons.
Communities are encouraged to enter into partnerships to request Micro-Loan assistance when demand is sufficient on a multi-jurisdictional basis and communities would be better served through a regionally administered loan program.
1. Threshold Criteria and Certifications: The State will distribute Micro Loan Program funds through an annual grant application selection process.(a) Eligible Activities: Eligible activities include the establishment of a local commercial loan program for the purpose of assisting for-profit and non-profit businesses.(b) Project Benefit: As a result of Micro-Loan expenditures, 51% of the jobs created or retained by each business assisted must be made available to or taken by persons from households that qualify as low and moderate income (LMI).2. Special Program Requirements: (a) Past Performance: In order to be eligible to apply for the 1997 Micro-Loan program, communities that received CDBG grants in or prior to 1993 must have closed their grants by December 1, 1996. Communities that received CDBG grants in 1994 must have conditionally closed their grants by December 1, 1996. Communities that received CDBG grants in 1995 must have obligated 50% of their benefit activity funds by December 1, 1996. Exceptions: Applicants must submit a request for a waiver of this special requirement under the following circumstances: 1) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature or2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed.
(b) Maximum Micro-Loan Grant Amount: $100,000. An additional $12,500 may be awarded to grantees to provide technical assistance to loan applicants. Funds not loaned out within 12 months of contract start date will be disencumbered.(c) Necessary and Appropriate: All loans made from the Micro-Loan Program to for-profit and non-profit businesses must be for projects that are necessary and appropriate as defined by HUD. Documentation must be provided that the project cannot proceed without Micro-Loan participation.(d) Financing Plan: Micro-Loans are limited to a maximum of $25,000 per loan. Micro-Loans may provide 100% of the financing for loans up to $15,000. Micro-Loans exceeding $15,000 require a dollar-for-dollar match for the portion of the loan exceeding $15,000. Project activities and use of funds to calculate the non Micro-Loan financing must represent a new investment or a new project.3. Selection Process: The selection process will consist of two phases: an application phase (Phase I) and a project development phase (Phase II). Phase I Application: The maximum length of an application is six pages. The application deadline is March 21, 1997.
Each application will be rated in relation to all other Micro-loan applications. A minimum of 70 points from the Problem Statement, Proposed Solution and Citizen Participation sections will be required for an application to be considered for funding. A Distress score will be added to this result to determine the proposed application score.
(a) Problem Statement (35 points): (i) Scope of Problem: (17.5 points) - Description of the economic base and business trend problems of the community and the impact on job opportunities.(ii) Magnitude of Problem: (17.5 points) - Description of the need for funds and how that need was identified.(b) Proposed Solution (35 points): (i) Scope of Solution: (17.5 points) - Description how funds will be used to solve the identified problems.(ii) Capacity: (17.5 points) - Description of the capacity of the applicant to conduct a Micro-Loan Program and identification of accomplishments in administering loan programs or completing similar responsibilities.(c) Citizen Participation (20 points): (i) Business Involvement: (10 points) - Description of how the business community participated in the application process.(ii) General Citizen Involvement: (10 points) - Description of how the need for, and priority of, a Micro-Loan program was defined by the general citizenry in the application process.(d) Distress (10 points): OCD will derive a community's distress score from the following two areas:(i) Unemployment: Rate (3.5 points) - The community's most recent annual unemployment rate will be divided by 10 and the result multiplied by 3.5. Communities with a unemployment rate greater than 10% will receive the total points allowed.(ii) Unemployment: Absolute Numbers (3.5 points) - Applicant communities will be listed from highest to lowest in terms of numbers of unemployed persons. The list will be divided into three equal segments and assigned points accordingly (high, 1.5; middle 1.0; and low 0.5). Unequal divisions will be rounded up.(iii) LMI: Percentage (1.5 points) - The community's most recent LMI percentage will be divided by 51 and the result multiplied by 3.5. Communities with an LMI population greater than 51% will receive the total points allowed.(iv) LMI: Absolute Numbers (1.5 points) - Applicant communities will be listed from highest to lowest in terms of numbers of LMI households. The list will be divided into three equal segments and assigned points accordingly (high, 1.5; middle 1.0; and low 0.5). Unequal divisions will be rounded up.D. ECONOMIC DEVELOPMENT INFRASTRUCTURE PROGRAM The Economic Development Infrastructure (EDI) Program provides Maine communities with funds to develop or rehabilitate public infrastructure to support existing and new non-retail businesses can create or retain jobs for low and moderate income individuals.
1. Threshold Criteria and Certifications: The State will distribute Economic Development Infrastructure Program funds through an annual grant application selection process held three times annually. (a) Eligible Activities: Eligible activities include acquisition, relocation, demolition, clearance, construction, reconstruction, installation, and rehabilitation associated with public infrastructure projects such as water and sewer facilities, flood and drainage improvements, publicly-owned commercial/industrial buildings, parking, streets, curbs, gutters, sidewalks, etc. which are necessary to create or retain jobs in the non-retail private sector for low and moderate income persons.(b) Cost per Job: In no case will the cost per job created or retained with EDI funds exceed $35,000.(c) Project Benefit: 51% of the jobs created or retained as a result of EDI expenditures must be made available to or taken by persons of low and moderate income.(d) Local Match: All communities applying for EDI funds must provide a local match equivalent to 20 percent of the total grant award.2. Special Program Requirements: EDI Program applicants must also comply with the following:(a) Past Performance: In order to be eligible to apply for the 1997 Economic Development Infrastructure program, communities that received CDBG grants in or prior to 1993 must have closed their grants by December 1, 1996. Communities that received CDBG grants in 1994 must have conditionally closed their grants by December 1, 1996. Communities that received CDBG grants in 1995 must have obligated 50% of their benefit activity funds by December 1, 1996. Exceptions: Applicants must submit a request for a waiver of this special requirement under the following circumstances: 1) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature or2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed.
(b) Maximum Economic Development Infrastructure Grant Amount: $400,000.(c) EDI Projects in Support of Retail Businesses: OCD will accept EDI Program applications in support of retail businesses only under limited conditions.(i) The retail business represents the provision of new products and services previously unavailable in the community;(ii) The development or expansion of the retail business represents a net economic gain for the community and the region. Applicant communities seeking EDI funds in support of a retail business or businesses are required to submit a completed Retail Business Certification contained in the 1997 EDI Application Package. This document certifies that the development represents a net overall gain for the regional economy and not a shift from existing established businesses to a new or expanded one; and(iii) 50% or greater of the jobs created by the retail business must be full time jobs. (40 hr./week).(d) Agreement to Participate: The applicant must submit a completed Agreement to Participate. This agreement must be on the form provided in the 1997 EDI application Package and be submitted with the application.(e) Statement of Job Retention: In cases where job retention is to be a result of EDI assistance, a completed Statement of Job Retention must accompany the Agreement to Participate. This statement must be on the form provided in the 1997 EDI application package.3. Selection Process: The selection process will consist of two phases: an application phase (Phase I), and a project development phase (Phase II). Phase I Application: The maximum length of an application is 8 pages. The application deadlines are: February 21, May 9, and July 18, 1997.
Each application will be rated in relation to all others. The total points from the Problem Statement, Proposed Solution, Citizen Participation, Numerical Analysis and Commitment sections will be determined for each application. A Distress score will be added to this result to determine the application score. A rank order will be established with the highest ranking application receiving first consideration and continuing until the allocation for each EDI funding round is exhausted. The Office of Community Development reserves the right to fund only those applications deemed to be in the best interests of the State of Maine and the Community Development Block Grant Program. Applications will not be funded out of rank order except in instances where a preceding application is deemed ineligible.
(a) Problem Statement (20 points): (i) Scope of Problem: (10 points) Problems facing a specific business(es) in relation to job creation or retention activities and overall financial viability.(ii) Impact on Community and Region: (5 points) - Explain how these problems negatively impact local and regional employment and overall economic conditions.(iii) Need for Funds: (5 points) - Reasons why the community is unable to finance the proposed project on its own, or with assistance from other sources, including the affected business.(b) Proposed Solution (20 points): (i) Project Description: (10 points) - Construction activities that the applicant will undertake using EDI funds to resolve the problem(s) presented in the Problem Statement.(ii) Effect on Assisted Business: (5 points) - Effect EDI assistance and completion of the project as a whole will have on the ability of the business(es) to remain competitive, and create/retain quality LMI jobs.(iii) Project Timeline and Feasibility: (5 points) - Description of the assurances of success of the project(c) Numerical Analysis of Significance of Project to Community and Region (20 points): Numerical tables to demonstrate the significance of the proposed project as it relates to job creation/retention and the effect on the labor market area and local economy. Point values will be determined by comparing the information presented in the application for each category below with set scoring criteria established by the OCD.(i) Number of jobs Created/Retained: (5 points)(ii) Percentage of Full Time Jobs: (5 points)(iii) EDI Dollars Per Job Created: (5 points)(iv) Quality of LMI Jobs Created: (5 points)(d) Citizen Participation (10 points): (i) Public Hearing Process : (5 points) - Documentation of the public hearing held in the applicant's municipality specific to this EDI application.(ii) Business/Local Involvement: (5 points) - Description of the involvement that the general citizenry, municipal leaders and businesses have had in increasing citizen awareness and developing the EDI application.(e) Commitment (25 points):(i) Confirmation of LMI Jobs to be Created/Retained: (10 points) - Firm documentation as to the number and type of jobs to be created or retained as a result of EDI financing.(ii) Project Funds Table and Source Documentation: (10 points) - A listing of all private and public funds firmly committed to this EDI project and binding documentation that these funds are secured.(iii) Environmental and Permitting: (5 points) - What has been accomplished and future actions necessary for successful EDI project implementation.(f) Unemployment Factor (3 points): OCD will derive a community's unemployment factor score from the following areas:(i) Unemployment Rate: (2 points) - A score determined by taking the community's most recent annual unemployment rate, dividing it by 10%, and multiplying the result by 2. Communities with a most recent annual unemployment rate greater than 10% will receive the total points allowed.(ii) Unemployment Numbers: (1 points) - applicants will be ranked from highest to lowest by number of unemployed persons. The rank order will be divided into three equal segments and assigned points accordingly (high 1; middle 0.5; and low 0.25). Unequal divisions will be rounded up.(g) Priority Points (2 points): EDI projects in support of natural resource based industries and value added products derived from natural resource based industries will receive two additional points.E. BUSINESS ASSISTANCE PROGRAM The Business Assistance (BA) program provides funds to local governments which in turn loan or grant these funds to businesses to create or retain jobs for low and moderate income persons. The Business Assistance program will provide either loans, grants or a combination of each to meet the infrastructure and real property needs of businesses. The objective of the program is to assist economic initiatives and development opportunities that will have a significant impact on a local or regional economy.
1. Threshold Criteria: The state will distribute Business Assistance Program funds through an annual grant application selection process.(a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive BA funds. County governments may only apply on behalf of unorganized territories;(b) 51% of the jobs created or retained as a result of BA expenditures must be provided to persons of low and moderate income;(c) the cost per job created or retained with BA funds shall not exceed $35,000.2. Special Program Requirements: (a) Necessary and Appropriate: A BA loan or grant to a business must be for projects that are necessary and appropriate. The application must describe the need for assistance, reasonableness of the amount requested, the repayment plan, and assurance that the assistance provided is commensurate with the community benefits that will accrue from the project. Documentation must be provided that the project cannot proceed without BA assistance.(b) Financing Plan: The application should present a complete financing plan for a project. The financing necessary to support the total project cost must be documented by binding commitment letters submitted with the application. Project activities or uses of funds used to calculate any non-CDBG financing must represent new investment.(c) Funds: The Business Assistance funds are provided as a grant to a unit of local government. The local government will use these funds as either a loan or grant to the business identified in the BA application. The loan or grant must be provided under the terms stated in a Business Assistance Letter of Conditions and the contract between DECD and the local government.(d) Repayment Terms: Terms must be based on the business' maximum capacity for principle and interest payments as documented in their proformas and reviewed by FAME as appropriate to remain profitable.(e) Maximum Business Development Grant Amount: $300,000(f) Exclusions: Communities will be eligible to receive either Economic Development Infrastructure (EDI) or Business Assistance funds, but not both for the same project.3. Eligible Activities Eligible activities to be carried out with BA funds include: acquisition, reconstruction, rehabilitation or installation of commercial or industrial buildings, structures, fixtures and real property improvements.
4. Selection Process: The BA project will be evaluated as a viable business proposal. The following will be considered:(a) Strategy Priority: The Business Assistance program will give priority to business activities that support the state's economic development strategy. The Business Assistance Program, whenever possible, will be targeted towards economic sectors identified in the strategy.(b) Chance of Success: The project demonstrates that a market exists for its product or service, the cost of the product or service is competitive in current market conditions, the cash flow projections are adequate to support operating expenses and indebtedness, and management has the capacity to carry out the business or development plan. The project must be complete in that there are no unidentified activities or project costs necessary to implement the project.(c) Financial Plan: The financing for the project is in place and legally binding commitments have been submitted; the proposal has an appropriate leverage ratio of private and public dollars and is structured to meet cash flow projections; and the project pro forma has been reviewed by an independent qualified financial professional. The financing plan must be complete.(d) Equity: The proposed loan/grant recipient has made an equity commitment to the project, preferably through a cash injection. Other substantial participation may substitute for a cash equity injection with appropriate explanation regarding equity participation.(e) BA Loan repayment: Terms of the loan repayment are to reflect what is necessary to allow a project to be implemented while providing the maximum and most expeditious return of CDBG BA monies for reuse.(f) Security: The proposed loan recipient presents collateral appropriate to secure the BA loan and indicates willingness to enter into security agreements.(g) Public Benefit: The BA proposal will be evaluated on the basis of the community and economic benefits that will result from the project.(h) Cost: The number of permanent jobs created or retained per BA project dollars and the increase in local tax dollars resulting form the project will be evaluated. Overall project cost effectiveness also will be considered.(i) Low and Moderate Income Benefit: Benefit to LMI persons will be evaluated. The integration of job training programs, job advancement opportunities, education and training programs, and referral services from Joint Training Partnership Act and Job Service will also be reviewed.(j) Community and Economic Development: The primary and secondary impacts of the project on the community's plans for future economic development will be evaluated. The review will also examine the ripple effect of the proposal on the community as a whole.(k) Community Financial Commitment: The community must demonstrate a vested financial interest in the development project. The program's goal is obtain community participation ranging up to 33% of CDBG funds.5. Approval Process: (a) Application: Applications may be submitted at any time. DECD staff will review the applications to determine if the threshold criteria have been met. A credit analysis will be conducted by DECD or its designee for each proposal. Following staff analysis, applications will be evaluated by a review committee appointed by the Director of the Office of Business Development.(b) Review Committee Recommendations: The review committee will evaluate staff reports and make recommendations to the Director of OBD for awards.F. INTERIM FINANCE PROGRAM The Interim Finance Program (IFP) utilizes funds not disbursed in the State's Letter of Credit for grants to communities to assist businesses or developers create housing and job opportunities for low and moderate income people through short-term loans.
1. Threshold Criteria: (a) Eligible Applicants: All units of general local government in Maine, including plantations, are eligible to apply for and receive IFP funds. County governments may apply on behalf of unorganized territories. Groups of local governments may apply for multi-jurisdictional or joint projects. Multi-jurisdictional applications require designation of one local government as the legal applicant and consent for that designation by each participating local government.(b) Ineligible Applicants: Entitlement communities of Portland, Bangor, Lewiston and Auburn, are not eligible to receive IFP funds. Except as described in 1(a) above, County governments are not eligible applicants.(c) The proposed activities must meet the low and moderate income objective as described below:(i) at least 51% of the jobs created by IFP expenditures must be provided to low and moderate income persons,(ii) at least 51% of the housing units created by IFP expenditures must be occupied by low and moderate income households, or(iii) the IFP expenditures reduce the development costs for new multi-family, non-elderly housing construction where not less than 20% of the units will be occupied by low and moderate income households at affordable rents and the proportion of the total cost of developing the project to be borne by the IFP funds is no greater than the proportion of units in the project that will be occupied by low and moderate income households.(d) Complete the required IFP application materials.(e) The application amount must be between $500,000 and $5,000,000. The Commissioner of DECD may waive the $500,000 minimum requirement if OCD determines it is in the best interest of the State and if OCD incurs no additional administrative costs as a result of the smaller award.2. Special Program Requirements: IFP applicants must also comply with the following: (a) Need for Financing: There must be a demonstrated need for an IFP loan in order for the project to be funded. The need may be based upon either a gap in available funding for the project or on a determination that the costs of financing so adversely affect the project's rate of return that the project would not be undertaken without additional assistance. IFP grantees must demonstrate the proposed rate and term have been set to ensure the assistance provided is the minimum needed and the proposed assistance is necessary and appropriate to carry out an economic development project.(b) Commitment of Non-CDBG Funds: The business being assisted must demonstrate that all non-CDBG financing, both permanent and interim, necessary for the project's completion has been secured.(c) Community Benefit: The project must result in a substantial benefit to the community: job creation/retention, tax revenue increases, new housing opportunities, or public facility improvements relative to the public dollar investment.(d) Irrevocable Letter of Credit: The business being assisted by the IFP grantee must secure an unconditional, irrevocable letter of credit for the full amount of the Interim Financing Loan (principal plus accrued interest to term) from a lending institution acceptable to DECD which will be assigned to the State. The State may accept a FAME guarantee in lieu of an irrevocable letter of credit.3. Selection Process: IFP grants will be made on a first come basis. Projects that meet requirements may be awarded IFP grants until the amount of funds available in the State's letter of credit has been committed. Following full commitment of the IFP, the State will maintain a waiting list of eligible projects to be funded. If projected funds will not be available for a minimum of six months, the State reserves the right not to accept any additional applications.4. Approval Process: Through its Technical Assistance Providers, direct mailings, and other marketing methods, the State will advertise the availability of funds within the IFP. Communities interested in applying will: notify the State of their intent to apply, identify the proposed loan recipient and provide an application describing the project. Following the acceptance of a complete application by the State, the DECD or its designee will conduct a financial analysis of the project. DECD will determine if the IFP grant/loan is needed, if all non-CDBG permanent and interim funds are committed, and if an irrevocable letter of credit is in place. The DECD staff will recommend the loan terms and interest rates to the Director of the OCD. The State will review all other program requirements. If these requirements are met, the Commissioner of the DECD will make a grant award based on the project meeting all program requirements.19-498 C.M.R. ch. 16, § 3