Secondary Loan Conduit Program

There is general agreement that insufficient private capital is available for environmental redevelopment. Increasing available capital will require two significant changes in current banking practices.

First, training is required to enable small and middle market bank lending officers to effectively underwrite contaminated property loans, dramatically reducing risk. The MGP conduit program will undertake the training of bank officers in order to facilitate the underwriting of brownfields loans.

Second, an active secondary market is needed to allow banks to significantly mitigate their risks by selling the loans they originate. The commercial banks, though, will be able to retain the Community Reinvestment Act credits which are vital for their ability to be periodically rechartered. MGP will provide a conduit for the sale of these loans involving environmental risk, creating a dramatic increase in available private capital.