What is CDBG?

Part 2: Community Development Block Grant (CDBG Program)

What is CDBG?

Authorized under Title I of the Housing and Community Development Act of 1974 (HCDA), as amended, the Community Development Block Grant (CDBG) is an annual grant to localities and states to assist in the development of viable communities. These viable communities are achieved by providing the following, principally for persons of low- and moderate-income:

  • Decent housing;
  • A suitable living environment; and
  • Expanded economic opportunities.

“Principally” means that, at a minimum, 70 percent of the CDBG funds expended by a state or entitlement grantee should be used to benefit low- and moderate-income people. This 70 percent can be measured over the course of a one-, two- or three-year time period, selected by the grantee.

Every year, each city in a metropolitan area with at least 50,000 people, principal cities (designated by OMB) of metropolitan areas, and each county with more than 200,000 in population (excluding metropolitan cities therein) receive CDBG funds. These cities and urban counties are called “entitlement grantees”—they are entitled to CDBG by virtue of their size. Each state also receives a CDBG grant. The CDBG grant amounts are determined by the higher of two formulas:

  • U.S. Census data based on overcrowded housing, population, and poverty; or
  • U.S. Census data based on age of housing, population growth lag, and poverty.

Entitlement communities receive the largest portion of CDBG funding (70 percent) and states receive the other 30 percent. Each state receives CDBG to pass along to its smaller towns and rural counties (non-entitlement communities), which usually compete with one another for the funds. Every state has its own procedures for operating the CDBG Program.

The CDBG regulations can be found at 24 CFR Part 570. Information about the Entitlement Program and its regulations are found at: https://www.hud.gov/offices/cpd/communitydevelopment/programs/entitlement/index.cfm.

Under the State CDBG Program, states follow the HCDA as supplemented by the State CDBG regulations, as applicable. In exercising its obligation to review a state’s performance under the program, HUD gives maximum feasible deference to the state’s interpretation of these statutory and regulatory requirements. HUD will accept the state’s interpretations, provided these are not clearly inconsistent with the Act or the regulation.

Information about the State CDBG Program and its regulations can be found at the following website: https://www.hud.gov/offices/cpd/ communitydevelopment/ programs/stateadmin/index.cfm.

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