Community Development Block Grant (CDBG)

Important Information

Introduction

Established by Congress in 1974, the Community Development Block Grant (CDBG) program has become one of the longest continuously operated Federal domestic programs administered by the Department of Housing and Urban Development (HUD). The CDBG Program provides annual grants, allocated on a formula basis, to entitlement cities and counties to develop viable urban communities by providing decent housing in a suitable living environment and expanding economic opportunities for low- and moderate-income persons.

The hallmark of the CDBG program is its flexible use by entitlement grantees (cities and counties), providing communities with financial resources to address a wide range of unique local community development needs.

Nature of the Program

HUD awards grants to designated entitlement community grantees to carry out a wide range of community development activities focused on revitalizing neighborhoods, economic development, and providing improved community facilities and services.

Entitlement communities develop their own programs and funding priorities unique to their local needs. Grantees, however, must give maximum feasible priority to activities that benefit low- and moderate-income persons. A grantee may also carry out activities that help prevent or eliminate slums or blight. However, CDBG entitlement funds may not be used for activities that do not meet these broad national objectives.

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

Eligible Activities

Community Development Block Grant funds may be used for activities that include the:

  • Acquisition of real property
  • Relocation and demolition
  • Rehabilitation of residential and non-residential structures
  • Construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes
  • Public services, not to exceed 15% of the entitlement grant
  • Activities relating to energy conservation and renewable energy resources
  • Provision of assistance to for-profit businesses to carry out economic development and job creation and retention activities

Ineligible Activities

Generally, CDBG funds may not be used for activities that include the:

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

Requirements

To receive its annual CDBG entitlement grant, the City - and all grantees - must develop and submit to HUD a five-year Housing and Community Development Consolidated Plan. This document is a grantee's comprehensive planning document, and application, for funding under the following Community Planning and Development formula grant programs: CDBG and the HOME Investment and Partnerships Program (HOME). In the Consolidated Plan, the grantee must identify its overall goals and its strategies for achieving those goals. The stated goals serve as the criteria against which HUD will evaluate the grantee's Consolidated Plan, each of the Annual Action Plans, and its performance under the Consolidated Plan.