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Community Development Block Grants/State's Program

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

Possible uses and use restrictions...

Thirty percent of funds available for distribution under each annual appropriation for the Community Development Block Grant (CDBG) program is allocated among the States for use in areas which are not a metropolitan city or part of an urban county (nonentitlement areas). All States except Hawaii have elected to administer these CDBG funds for areas that do not receive CDBG entitlement grants (14.218). HUD awards the formula grants to these States under the CDBG/State Program. In Hawaii, HUD awards the state?s share of these funds to three counties under the CDBG/Small Cities Program (14.219). States must distribute CDBG funds to units of general local government (counties, towns, etc.) in nonentitlement areas. States develop their own programs and funding priorities. Units of general local government then carry out community development activities funded by the State. Eligible activities are directed toward neighborhood revitalization, economic development, or provision of improved community facilities and services. Specific activities that can be carried out with block grant funds include: Acquisition, rehabilitation or construction of certain public works facilities and improvements, such as streets, water and sewer facilities, neighborhood centers, recreation facilities, and other public works; demolition and clearance; rehabilitation of public and private buildings including housing; code enforcement; relocation payments and assistance; administrative expenses; economic development; planning activities; certain public services with some restrictions. The projected use of funds must be developed to ensure that all activities will meet one of the three national objectives described under "OBJECTIVES". Communities receiving CDBG funds from a state may select subgrantees to carry out approved projects. Such subgrantees may include: Neighborhood-based nonprofit organizations; local development corporations; Small Business Investment Companies; or other nonprofit organizations serving the development needs of nonentitlement areas. Grant recipients may provide assistance to for-profit entities when the recipient determines that the provision of such assistance is appropriate to carry out an economic development project. Communities are restricted from constructing or rehabilitating public facilities for the general conduct of government and from making housing allowances or other income maintenance-type payments. Each State may use a limited portion of its grant, subject to a matching requirement, to administer the program. Each State may also use a limited portion of its grant, with no matching requirement, to provide technical assistance to local governments and nonprofit program recipients. The aggregate use of CDBG funds must ensure that not less than 70 percent of the funds received benefit persons of low and moderate income.