diff --git a/app/core/config.py b/app/config.py
similarity index 93%
rename from app/core/config.py
rename to app/config.py
index 681d4c3..c370680 100644
--- a/app/core/config.py
+++ b/app/config.py
@@ -4,7 +4,7 @@ from pydantic_settings import BaseSettings
 
 
 class Settings(BaseSettings):
-    """Application settings following 12-factor app principles."""
+    env: str = Field(default='DEV', alias="ENV")
 
     # Server settings
     host: str = Field(default="0.0.0.0", alias="HOST")
diff --git a/app/core/__init__.py b/app/core/__init__.py
deleted file mode 100644
index e69de29..0000000
diff --git a/app/core/database.py b/app/database.py
similarity index 97%
rename from app/core/database.py
rename to app/database.py
index e192901..465171e 100644
--- a/app/core/database.py
+++ b/app/database.py
@@ -5,7 +5,7 @@ from sqlalchemy import MetaData, create_engine
 from sqlalchemy.ext.asyncio import AsyncSession, async_sessionmaker, create_async_engine
 from sqlalchemy.orm import DeclarativeBase, Session, sessionmaker
 
-from app.core.config import settings
+from app.config import settings
 
 
 class Base(DeclarativeBase):
diff --git a/app/logging.py b/app/logging.py
new file mode 100644
index 0000000..c54770d
--- /dev/null
+++ b/app/logging.py
@@ -0,0 +1,42 @@
+"""Logging configuration with structured logging."""
+import logging
+import sys
+
+import structlog
+
+from app.config import settings
+
+
+def configure_logging() -> None:
+    """Configure structured logging."""
+
+    structlog.configure(
+        processors=[
+            structlog.stdlib.filter_by_level,
+            structlog.stdlib.add_logger_name,
+            structlog.stdlib.add_log_level,
+            structlog.stdlib.PositionalArgumentsFormatter(),
+            structlog.processors.TimeStamper(fmt="iso"),
+            structlog.processors.StackInfoRenderer(),
+            structlog.processors.format_exc_info,
+            structlog.processors.UnicodeDecoder(),
+            structlog.processors.JSONRenderer(
+            ) if not settings.debug else structlog.dev.ConsoleRenderer(),
+        ],
+        context_class=dict,
+        logger_factory=structlog.stdlib.LoggerFactory(),
+        wrapper_class=structlog.stdlib.BoundLogger,
+        cache_logger_on_first_use=True,
+    )
+
+    # Configure standard logging
+    logging.basicConfig(
+        format="%(message)s",
+        stream=sys.stdout,
+        level=getattr(logging, settings.log_level.upper()),
+    )
+
+
+def get_logger(name: str) -> structlog.BoundLogger:
+    """Get a configured logger instance."""
+    return structlog.get_logger(name)  # type:ignore[no-any-return]
diff --git a/app/middleware.py b/app/middleware.py
new file mode 100644
index 0000000..0ab17e2
--- /dev/null
+++ b/app/middleware.py
@@ -0,0 +1,36 @@
+from typing import Callable
+
+from fastapi import Request, Response
+from slowapi import Limiter, _rate_limit_exceeded_handler
+from slowapi.errors import RateLimitExceeded
+from slowapi.middleware import SlowAPIMiddleware
+from slowapi.util import get_remote_address
+
+from app.config import settings
+from app.logging import get_logger
+
+logger = get_logger(__name__)
+
+# Rate limiter
+limiter = Limiter(key_func=get_remote_address)
+
+
+async def logging_middleware(request: Request, call_next: Callable) -> Response:
+    """Log all requests and responses."""
+    logger.debug(
+        "Request received",
+        method=request.method,
+        url=str(request.url),
+        client_ip=get_remote_address(request)
+    )
+
+    response = await call_next(request)
+
+    logger.debug(
+        "Response sent",
+        status_code=response.status_code,
+        method=request.method,
+        url=str(request.url)
+    )
+
+    return response
diff --git a/app/resources/health.py b/app/resources/health.py
index 39f7062..1fdf6c8 100644
--- a/app/resources/health.py
+++ b/app/resources/health.py
@@ -1,7 +1,7 @@
 """Health check endpoints."""
 from fastapi import APIRouter
 
-from app.core.database import DatabaseService
+from app.database import DatabaseService
 
 router = APIRouter()
 
diff --git a/main.py b/main.py
index 43a13ce..cba66d7 100644
--- a/main.py
+++ b/main.py
@@ -1,17 +1,38 @@
 """
 Main entry point for the Loan Operations API.
 """
-import uvicorn
-from fastapi import FastAPI
-from fastapi.middleware.cors import CORSMiddleware
+import sentry_sdk
+from ddtrace import patch_all
+from fastapi import APIRouter, FastAPI
+from sentry_sdk.integrations.fastapi import FastApiIntegration
 
-from app.core.config import settings
+from app.config import settings
+from app.logging import configure_logging, get_logger
+from app.middleware import logging_middleware
 from app.resources import health
 
 
 def create_app() -> FastAPI:
     """Create and configure the FastAPI application."""
     
+    # Configure monitoring
+    if settings.sentry_dsn:
+        sentry_sdk.init(
+            dsn=settings.sentry_dsn,
+            integrations=[FastApiIntegration()],
+            traces_sample_rate=1.0,
+            environment=settings.dd_env,
+        )
+    
+    if settings.dd_service:
+        # Configure Datadog tracing
+        patch_all()
+    
+    # Configure logging
+    configure_logging()
+    logger = get_logger(__name__)
+    
+    # Create FastAPI app
     app = FastAPI(
         title="Loan Operations API",
         description="SBA Loan Operations API",
@@ -28,7 +49,9 @@ def create_app() -> FastAPI:
 
 def main() -> None:
     """Run the application."""
-    
+
+    import uvicorn
+
     uvicorn.run(
         app,
         host=settings.host,