Community Development Block Grant Program

Introduction

The Community Development Block Grant (CDBG) program provides annual grants on a formula basis to entitled cities and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons. The program is authorized under Title 1 of the Housing and Community Development Act of 1974, Public Law 93-383, as amended; 42 U.S.C.-5301 et sequens.

Nature of Program

The United States Department of Housing and Urban Development (HUD) awards grants to entitlement community grantees to carry out a wide range of community development activities directed toward revitalizing neighborhoods, economic development, and providing improved community facilities and services.

Entitlement communities develop their own programs and funding priorities. However, grantees must give maximum feasible priority to activities which benefit low- and moderate-income persons. A grantee may also carry out activities which aid in the prevention or elimination of slums or blight.

Additionally, grantees may fund activities when the grantee certifies that the activities meet other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community where other financial resources are not available to meet such needs. CDBG funds may not be used for activities which do not meet these broad national objectives.

Eligible Grantees

Eligible grantees, who are entitled to receive annual grants, are as follows:

Principal cities of Metropolitan Statistical Areas (MSAs);
Other metropolitan cities with populations of at least 50,000
Qualified urban counties with populations of at least 200,000 (excluding the population of entitled cities)

HUD determines the amount of each entitlement grant by a statutory dual formula which uses several objective measures of community needs, including the extent of poverty, population, housing overcrowding, age of housing and population growth lag in relationship to other metropolitan areas.

Eligible Activities

CDBG funds may be used for activities which include, but are not limited to:

Acquisition of real property
Activities relating to energy conservation and renewable energy resources
Construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes
Provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities
Public services, within certain limits
Rehabilitation of residential and non-residential structures
Relocation and demolition

Ineligible Activities

Generally, the following types of activities are ineligible:

Acquisition, construction, or reconstruction of buildings for the general conduct of government
Certain income payments
Construction of new housing by units of general local government
Political activities

Requirements

To receive its annual CDBG entitlement grant, a grantee must develop and submit to HUD its Consolidated Plan, (which is a jurisdiction's comprehensive planning document and application for funding under the following Community Planning and Development formula grant programs: CDBG, HOME Investment Partnerships, Housing Opportunities for Persons with AIDS (HOPWA), and Emergency Shelter Grants (ESG).

In its Consolidated Plan, the jurisdiction must identify its goals for these programs as well as for housing programs. The goals will serve as the criteria against which HUD will evaluate a jurisdiction's Plan and its performance under the Plan. Also, the Consolidated Plan must include several required certifications, including that not less than 70% of the CDBG funds received, over a one, two or three year period specified by the grantee, will be used for activities that benefit low- and moderate-income persons, and that the grantee will affirmatively further fair housing.

HUD will approve a Consolidated Plan submission unless the Plan (or a portion of it) is inconsistent with the purposes of the National Affordable Housing Act or is substantially incomplete.

Post-Approval Requirements

Following approval, the Department will make a full grant award unless the Secretary has made a determination that the grantee:

Has failed to carry out its CDBG-assisted activities in a timely manner
Has failed to carry out those activities and its certifications in accordance with the requirements and the primary objectives of Title I of the Housing and Community Development Act of 1974, as amended, and with other applicable laws
Lacks a continuing capacity to carry out its CDBG-assisted activities in a timely manner

Citizen Participation

A grantee must develop and follow a detailed plan which provides for, and encourages, citizen participation and which emphasizes participation by persons of low- or moderate-income, particularly residents of predominantly low- and moderate-income neighborhoods, slum or blighted areas, and areas in which the grantee proposes to use CDBG funds. The plan must:

Identify how the needs of non-English speaking residents will be met in the case of public hearings where a significant number of non-English speaking residents can be reasonably expected to participate
Provide citizens with reasonable and timely access to local meetings, information, and records related to the grantee's proposed and actual use of funds
Provide for public hearings to obtain citizen views and to respond to proposals and questions at all stages of the community development program, including at least the development of needs, the review of proposed activities, and review of program performance;
Provide for timely written answers to written complaints and grievances