Block Grant Program (C.D.B.G.)
Frequently Asked Questions:
1. What is the Community Development Block Grant Program?
In an attempt to streamline the disbursement of Federal funds to
Municipalities led to the Community Development Block Grant (CDBG)
program in the 1970’s. The initiative sought to pool various
funds received into on “Block” payment, creating a more
efficient process on both the Federal and Municipal levels.
2. Where do the Funds come from?
Funds are from the Federal Treasury through the United States
Department of Housing and Urban Development (HUD). It is also
HUD’s responsibility to monitor the use of funds by all CDBG
recipients. Congress appropriates funds annually, an amount
which varies year to year.
3. What are the funds used for?
CDBG funds must be used to enhance the living environment of the
lower and moderate income population of the City.
4. What activities are eligible for CDBG funding?
• Maintain, Create and Rehab Affordable Housing Units;
• Fund Human Service Initiatives;
• Upgrade and Refurbish Parks & Playgrounds, Open Spaces and
Neighborhood Center; and
• Economic Development through Incubators, Micro-Enterprise
Assistance and Commercial
5. To whom are funds available?
Each recipient (person or entity), or beneficiary, of CDBG Funds
must be income eligible by HUD standards. Each proposed activity
must meet Federal criteria an must also contribute to the
meeting of national objectives. (Click HUD / CDBG Income
Guidelines for a detailed look at financial requirements)
6. What are the Eligibility requirements, Federal Criteria and
There are many! Check HUD’s web-site for a complete explanation
Criteria and Eligibility.
HUD / CDBG Income Guidelines:
CDBG Income Limits
Effective March 2009
Income Low Income
Low Income Household/Person: A household or member of a family
having an income equal to or less than 30% of the
Fitchburg-Leominster MSA Median Family Income.
Very Low Income Household/Person: A household or member of a
family having an income equal to or less than the Section 8
very-low income limit established by HUD (or 31-50% of the
Fitchburg-Leominster MSA Median Family Income).
Low/Moderate Income Household/Person: A household or member of a
family having an income equal to or less than the Section 8
low-income limit and greater than the Section 8 very low-income
limit established by HUD (or 51-80% of the Fitchburg-Leominster
MSA Median Family Income).
Fitchburg-Leominster MSA Median Family Income: $69,100
CITY OF LEOMINSTER
HOUSING REHABILITATION PROGRAM
A. INTRODUCTION AND PURPOSE
The Leominster Housing Rehabilitation Program has been
established by the City of Leominster under the auspices of the
U. S. Department of Housing and Urban Development through the
Housing and Community Development act of 1974.
The purpose of this program is to arrest deterioration in the
local housing stock by making grants and loans available to
homeowners for eligible home rehabilitation projects designed to
bring substandard housing into compliance with various state and
This manual contains a detailed description of the Leominster
Housing Rehabilitation program and constitutes the guidelines
for participation therein. Homeowners will be required to sign
an agreement with the City of Leominster prior to their
participation indicating their concurrence with all program
requirements as contained herein. Signatories to this agreement
will be legally bound by these terms and exceptions will not be
made after signatures are affixed to the agreement.
Any person requiring assistance with the details of this program
or with any aspect of its administration pursuant to an
individual rehabilitation project should contact:
Joseph Cataldo, Rehab Specialist
Office of Planning and Development
City Hall – 25 West Street
Leominster, MA 01453
Note: The Community development Block Grant Office reserves the
right to change, modify or amend the program at any time to
facilitate the administration of the program and to implement
HUD notices and monitoring findings.
Agency shall mean the Community Development Office whose
responsibility it shall be to operate the program.
Codes shall mean that body of legislation and related
regulations which relate directly to housing and includes all
federal, state and local laws relating thereto.
Contractor shall mean any recognized and/or licensed person or
firm capable of undertaking rehabilitation projects relative to
the terms of the program.
Grantee shall mean any Leominster resident who becomes
authorized for or receives a rehabilitation grant under the
Program shall mean the Leominster Housing Rehabilitation
Property shall mean any structure to which program funds are
being applied for the purpose of rehabilitation under the terms
of the program.
Violation shall mean any departure from federal, state or local
codes or laws presently in effect in the City of Leominster.
C. GENERAL PROGRAM DESCRIPTION
The Leominster Housing Rehabilitation program has been
established to render financial assistance to Leominster
residents of low/moderate income (as defined by HUD) for the
rehabilitation of dwelling units (one to nine units). Ten units
or more, Davis Bacon wages shall be applied. Applicants will be
processed on a first come first served basis.
C.1. PROGRAM ELEMENTS
This rehabilitation program is composed of several elements
designated to ameliorate specific substandard conditions. These
1. General rehabilitation
2. Energy conservation activities
3. Elimination of architectural barriers
4. Historic preservation
C.2. ELIGIBLE STRUCTURES
To be eligible for the program, structures must be substandard
as determined by inspections made by program staff.
“Substandard” as defined for the purpose of this program is a
structure exhibiting significant deviation from the Housing
Quality standards of the section 8 Existing Program (882.109).
The following criteria will be used to determine whether a
structure will be eligible for assistance under the program.
Based on section 8 standards, a substandard condition exists
a) There are serious deficiencies representing an immediate
threat to the health or safety of the occupants.
b) Serious deterioration to individual components of the
structure has occurred due to poor design, poor workmanship, or
premature failure of materials.
c) Periodic maintenance to individual components of the
structure, or the structure as a whole, has been deferred to the
extent that if left further unattended, serious conditions will
d) The building systems (plumbing, heating, electrical) are
antiquated to the extent that they are generally accepted to be
no longer the standard and may constitute a health or safety
hazard or an unrealistic financial hardship on the structure’s
If there are no conditions present that fall under the above
mentioned criteria, the structure and therefore the property
owner, is ineligible. Further, if otherwise eligible conditions
exist but the cost of bringing these conditions up to acceptable
standards is less than $750, the property owner is ineligible.
It is not the intention of the program to eliminate further
maintenance costs to a property owner and/or making general
property improvements to the structure. Property owners must
recognize periodic maintenance as unavoidable.
The Community Development Director reserves the right to make
case by case determinations regarding the eligibility of
individuals and structures for the purpose of housing
C.3. ELIGIBLE APPLICANTS
Eligibility for participation in this program requires that
1. Have clear title to the property
2. Have not received federal assistance for housing
rehabilitation within the last 60 months from the date of
3. Meet gross family income limits as established by HUD
a) very low income – long term deferred payment, no interest
b) low income – 3% interest loan.
c) Moderate income 3% interest loan
d) elderly (age 62 or over) – long term deferred payment, no
C.4. ELIGIBLE ACTIVITIES
Rehabilitation projects eligible under this program include a
wide variety of items not all of which are included on the
following list which is intended to be illustrative only:
1. Repair or replacement of water and sewerage systems and their
2. Repair or replacement of heating systems and their
3. Repair or replacement of electrical systems and their
4. Replacement of defective plumbing, including defective sinks,
tubs and toilet facilities;
5. Eradication of all serious insect and rodent infestation;
6. Eradication of lead paint where chance of ingestation by
children is likely;
7. Repair of all seriously deteriorated floors, walls and
8. Repair or replacement of structurally defective porches,
roofs, gutters, chimneys and foundations;
9. Installation of energy conservation items such as storm
windows and doors, insulation, weather stripping, etc;
10. Repair of exterior walls so the structure may be kept water
tight and free from chronic dampness, weather tight and in good
repair. Depending on condition, this may include painting.
“Elderly family” means a family whose head or spouse or whose
sole member is at least sixty-two years of age, or a disabled
person as defined below or handicapped persons living together,
or one or more such persons living with another person who is
determined to be essential to his or her case as well being.
“Handicapped Person” means a person having a physical or mental
1. is expected to be of long- continued and indefinite duration
2. substantially impedes his or her ability to live
3. is of such a nature that such ability could be improved by
more suitable housing conditions.
“Disabled Person” means a person who is under a disability as
defined in section 102 (b) (5) of the developmental Disabilities
services and facilities Construction amendments of 1970 (42
U.S.C. 60001 (7).” Section 223 of the social security act
defines disability as:
A. Inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than 12 months; or
B. In the case of an individual who has attained the age of 55
and is blind (within the meaning of ‘blindness” as defined by
section 416(I) (1) of this title, inability by reason of such
blindness to engage in substantial gainful activity requiring
skills or abilities comparable to those of any gainful activity
in which he has previously engaged with some regularity and over
a substantial period of time.
C.5. DETERMINATION OF GROSS FAMILY INCOME
The following sources of income are counted in computing annual
family earnings under the Leominster Housing Rehabilitation
1. gross amount, before payroll deductions, of wages and
salaries, overtime pay, fees, commissions, tips and bonuses;
2. net income from operation of a business or profession or from
rental of real property;
3. interest and dividends;
4. full amount of periodic payments received from social
security, annuities, insurance policies, retirement fund,
pensions, disability or death benefits, and other similar types
of periodic receipts;
5. payments in lieu of earnings, such as unemployment and
disability compensation and severance pay;
6. periodic and determinable allowances, such as alimony and
child support payments, as well as regular contributions or
gifts from persons not residing in the home;
7. public assistance payments (welfare, AFDC, etc.)
In computing gross family income deductions of $300 per minor
(under the age of 18) as well as for “exceptional medical
expenses” (exceed 25% of gross family income) will be allowed.
D. PROGRAM MANAGEMENT
D.1. COMMENCEMENT OF WORK
Before any rehabilitation work under this program is authorized
to commence, certain procedures shall be followed. Thee are:
1. At least two (2) bids must be submitted by contractors for
the work described in the work write-up. Single bids may be
allowed if it can be documented that a reasonable attempt was
made to secure more than one bid but more than one bid was not
forthcoming. In this event single bids will be analyzed by
program staff for consistency with the office estimate;
2. Upon selection of a contractor for the work proposed, the
owner and the contractor must enter into an agreement containing
standard terms and conditions established for this program; and
3. The owner and the City of Leominster shall enter into an
agreement stating that both parties agree to the terms of the
program as set forth in this manual, and that all aspects of the
program shall be conducted accordingly.
When these three (3) conditions have been met, a “Notice to
Proceed’ will be executed by the
Rehabilitation specialist authorizing work to begin forthwith.
D.2. BID REQUIREMENTS – CONTRACTOR SELECTION
The Rehabilitation specialist shall obtain, in conjunction with
the applicant, a minimum of two (2) sealed bids from contractors
for the work to be performed through this program. Bids may be
solicited from the office list of contractors or from additional
sources, including contractors requested by the applicant.
Selection of the contractor to perform the rehabilitation work
will be the discretion of the applicant unless ample evidence
exists to indicate that work proposed by that contractor would
not be in the best interest of the owner and/or the program.
This determination shall be made by program staff in
consultation with the applicant. Agency approval of all bids
shall be required before work financed under this program
begins. It should be noted, however, that the amount of the
grant received by the applicant shall be based on the low bid
obtained and that any cost in excess of that amount shall be the
responsibility of the applicant.
The program staff reserves the right to reject a contractor if
he does not have or agree to obtain proper license or insurance,
or if he has previously performed unsatisfactorily in the
program, or if the Rehabilitation specialist feels that he has
too many unfinished contracts.
D.3. PROJECT INSPECTIONS
Determinations of eligibility shall be made upon processing
individual applications for funding under this program.
Estimated project costs would then be determined through site
inspections and work write-ups. The acceptance of a bid for
rehabilitation work shall indicate the actual project cost and
the program grant shall be based upon this amount plus approved
Progress payments may be made if requested by a contractor but
shall be approved at the discretion of program staff only after
an interim inspection has been conducted which indicates that
the work covered by this progress payment has been adequately
completed. Progress payments shall only be approved at 25%
completion and/or 50% completion. Under normal circumstances the
program portion will be approved for payment only upon
completion and approval of the approved work. Under no
circumstances will advance payments prior to the start of
construction be authorized.
D.4. PROJECT INSPECTIONS
Over the duration of rehabilitation projects conducted under
this program, at least three 93) project inspections will be
1. An initial inspection will be conducted upon submission of an
application funding under this program. A work write-up and cost
estimate will be developed following this inspection by project
2. At least one interim or progress inspection will be conducted
during the course of project construction to assure that proper
materials are being used and that the quality of work is
3. One final inspection will be conducted upon project
completion to verify completeness and ascertain the adequacy
(quality) of workmanship.
Additional inspections may be conducted on any project at any
time depending upon circumstances associated with each project.
Payments for labor and/or materials will be made contingent on
adequate work performed and materials used.
Upon completion of individual projects under this program,
retainage in the amount of 15% of the total project cost will be
withheld for a period of fifteen (150 days. The contractor will
be remunerated for this amount after the stipulated time if
during that period no defects in the work become evident,
retainage shall be withheld until such time as adequate
corrections are made.
E. GENERAL CONDITIONS
The following general conditions will apply uniformly over the
duration of the program. However, the City of Leominster
reserves the right to make program amendments as necessary to
expedite the operation of the program.
E.1. RENTAL AND RESAVE OF REHABBED UNITS
Because the primary purpose of this program is to benefit
low/moderate income residents while maintaining the existing
housing stock, the use of this program strictly for capitol
gains purposes is discouraged. Pursuant to this policy,
adherence to certain guidelines will be required of all
participants in this rehabilitation program. These are as
1. The owner(s) of any rental units rehabilitated under this
program shall agree not to raise rental rates for a period of 24
months from the date of signing the Agreement between owner and
the Community development Office. This requirement may be waived
by the Community Development Director where the owner(s) can
show proof of an increase in costs which would justify the
proposed increase other than the costs of rehabilitation. In any
case, increases would not become effective while an existing
lease if in force.
2. If a structure which has received assistance under this
program is sold or the title transferred, or refinanced, the
owner/seller shall refund to the City of Leominster 100% of the
total amount of such program funding received.
E.2. REPAYMENT OF PROGRAM FUNDS
The owner understands and agrees that if the rehabbed building
is sold, or the title transferred or refinanced, the total
amount of the grant received shall be refunded to the City of
Leominster. The owner understands and agrees that their property
will be registered at the Registry of Deeds and a lien put on
the property. This agreement shall be binding upon, insure to
the benefit of the parties hereto, their heirs, successors and
E.3. MULTIFAMILY DWELLINGS
The owner understands and agrees that property insurance
coverage for the total grant amount shall be purchased by the
owner , whereas the City of Leominster shall be the beneficiary
on the policy. This policy shall be maintained in place every
year for the length of the contract. Failure to maintain
coverage of such insurance shall be a violation of said contract
and will result in “Repayment” of program funds. It shall be the
responsibility of the owner to produce an updated policy to the
City of Leominster yearly.
PROGRAM BENEFIT LIMITS
CDBG Housing Rehabilitation Program designed goal - $18,000 per
unit per single family; $7,000 per unit for multi-families from
one to nine. Ten or more units, Davis Bacon ages shall be
Based on the availability of funds and the severity of the
violations, the determination for dollar amount is left up to
the City of Leominster.
The owner is aware of state and Federal fair Housing Laws and
will not discriminate against any person because of race, color,
religion, national origin, sex, familial status (children in
household) and mental or physically handicapped in the sale or
rental of housing; or the provision of real estate brokerage