Community Development Block Grants/State's Program

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

Purpose of this program:

The primary objective of this program is the development of viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income. Each activity funded must meet one of the program's National Objectives by: Benefiting low and moderate income families; aiding in the prevention or elimination of slums or blight; or meeting 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.

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.

Who is eligible to apply...

Only State governments may receive funds from HUD under this program. Funds are allocated to each state based on a statutory formula. States must distribute the funds to units of general local government in nonentitlement areas.

Eligible Applicant Categories:
Eligible Functional Categories:
Credentials/Documentation

The State must certify that with respect to nonentitlement areas the State will: (1) engage in planning for community development activities; (2) provide technical assistance;(3) consult with local officials from nonentitlement areas in determining methods for distributing funds, and (4) each unit of general local government to receive funds must identify its housing and community development needs, the needs of low and moderate income persons, and the activities to be undertaken to meet such needs. The State must submit a Consolidated Plan and annual action plan, which contains its method of distributing CDBG funds. The State must also certify that (1) it has met the statutory citizen participation requirements, (2) it will conduct its grant in conformance with the Civil Rights Act of 1964 and the Fair Housing Act, (3) all activities will meet one of the three national objectives described under "OBJECTIVES", and (4) it will comply with the other provisions of Title I and all applicable laws. This program is covered under OMB Circular No. A-87 or comparable cost principles established by the States.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.

How to apply...

Application Procedure:

Each state must submit a Consolidated Plan, an annual action plan and certifications to HUD. The Consolidated Plan and annual action plan cover four major formula-distribution HUD community development programs, including CDBG. The annual action plan must contain the method by which the State will distribute its CDBG funds.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

HUD will provide funds after the State submits its Consolidated Plan, annual action plan and Certifications.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.

Deadlines and process...

Deadlines

Consolidated Plans may be submitted between November 15 and August 16 of each fiscal year in which the State will administer funds.

Note: When available, this section indicates the deadlines for applications to the funding agency which will be stated in terms of the date(s) or between what dates the application should be received. When not available, applicants should contact the funding agency for deadline information.

Range of Approval/Disapproval Time

HUD will review plan submissions for completeness and consistency with the purposes of the Act, within 45 days of receipt from a State.

Preapplication Coordination

This program is excluded from coverage under 24 CFR Part 85 and E.O. 12372.

Note: This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units prior to the submission of a formal application to the federal funding agency.

Appeals

The procedure is described in regulations (24 CFR Part 570 Subpart I).

Note: In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).

Renewals

Not applicable.

Note: In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.

Who can benefit...

The principal beneficiaries of CDBG funds are low and moderate income persons. For non-metropolitan areas, low and moderate income is generally defined as 80 percent of the median income for non-metropolitan areas of the State, adjusted for family size. For metropolitan areas, low- and moderate-income is generally defined as a member of a family having an income equal to or less than the Section 8 low-income limit established by HUD.

Beneficiaries
About this section:

This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.

What types of assistance...

Formula Grants

Allocations of money to States or their subdivisions in accordance with distribution formulas prescribed by law or administrative regulation, for activities of a continuing nature not confined to a specific project.

How much financial aid...

Range and Average of Financial Assistance

State grant amounts are determined by formula. Of the 50 grants awarded under the State CDBG program in FY 2003, the average (mean) grant amount was $25,919,440. Grant amounts ranged from $2,205,000 to $85,267,000.

Note: This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.

Obligations

FY 03 $1,295,972,000; FY 04 est $1,293,365,000; and FY 05 est $1,291,277,000. (NOTE: Amounts reported reflect allocation of new budget authority rather than obligation amounts.)

Note: The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.

Account Identification

86-0162-0-1-451.

Note: Note: This 11-digit budget account identification code represents the account which funds a particular program. This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.

Examples of funded projects...

Projects are selected by States.

About this section

This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.

Program accomplishments...

Accomplishments reported by states in fiscal year 2003 provided 81,957 housing benefits for nonentitlement communities, and created or retained 345,404 jobs.

Criteria for selecting proposals...

All States are eligible if they meet the requirements outlined in Credentials/Documentation. States are responsible for determining the methods of distribution of funds to their units of general local government in nonentitlement areas.

Assistance considerations...

Length and Time Phasing of Assistance

Assistance is provided to States on an annual basis. Individual States may impose time limitations on the implementation of grants to recipients.

Formula and Matching Requirements

Allocations to States are based on U.S. Census data using a dual formula prescribed under Section 106 of the Act. Allocations for each State are based on an amount equaling the greater of the amounts calculated under the two formulas. The factors involved in the first formula are population, extent of poverty and extent of overcrowding, weighted 0.25, 0.50, and 0.25, respectively. The factors involved in the second formula are population, poverty, and age of housing, weighted 0.20, 0.30, and 0.50, respectively. The statistical factors used for fund allocation are (1) total resident population for all places in the nation (2) number of persons with incomes below the poverty level; (3) number of housing units with 1.01 or more persons per room; and (4) age of housing (number of year-round housing units built in 1939 or earlier). The statistical factors for each State are adjusted to reflect only the non-entitled area; that is, the State area excluding metropolitan cities and urban counties. The amount of non-entitlement funds allocated to a State is not affected by whether the State or HUD administers the fund in that State. There is no matching requirement for the allocation of funds under the formula. Address questions concerning the formula to the Systems Development and Evaluation Division Rm. 7224, Community Planning and Development, 451 7th Street, SW. Washington, DC 20410. Telephone: (202) 708-0790.

Note:
A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.

Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.

In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.

Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.

Post assistance requirements...

Reports

Annual performance report covering all programs included in the Consolidated Plan.

Note: This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.

Audits

In accordance with the provisions of OMB Circular No. A-133, "Audits of State and Local Governments and Non-Profit Organizations", nonfederal entities that expend $500,000 or more in a year shall have a single audit conducted for that year in accordance with the provisions of the circular.

Note: This section discusses audits required by the Federal agency. The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133. These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year, as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period, rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).

Records

Records must demonstrate that the State has met the requirements of Title I of the Act.

Note: This section indicates the record retention requirements and the type of records the Federal agency may require. Not included are the normally imposed requirements of the General Accounting Office. For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C. For other programs, record retention is governed by the funding agency's requirements.

Regulations...

Authorization

Housing and Community Development Act of 1974, Title I, as amended; Public Law 93-383; 88 Stat. 633; 42 U.S.C. 5301-5321.

Note: This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).

Regulations, Guidelines, And Literature

24 CFR Part 570, 24 CFR Part 91, 24 CFR Part 58.

Contact information...

Web Sites
Regional Or Local Office

Contact the appropriate HUD Field Office listed in Additional Contact Information - FMR Help. Or on the Internet, see: http://www.hud.gov/local/index.cfm.

Note: This section lists the agency contact person, address and telephone number of the Federal Regional or Local Office(s) to be contacted for detailed information regarding a program such as: (1) current availability of funds and the likelihood of receiving assistance within a given period; (2) pre-application and application forms required; (3) whether a pre-application conference is recommended; (4) assistance available in preparation of applications; (5) whether funding decisions are made at the headquarters, regional or local level; (6) application renewal procedures (including continuations and supplementals) or appeal procedures for rejected applications; and (7) recently published program guidelines and material. However, for most federal programs, this section will instruct the reader to consult the so-called Appendix IV of the Catalog due to the large volume of Regional and Local Office Contacts for most agencies. This information is provided in Additional Contact Information (see below).

Headquarters Office

State and Small Cities Division, Office of Block Grant Assistance, Community Planning and Development, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. Telephone: (202) 708-1322; e-mail: Steve_Johnson@hud.gov.

Note: This section lists names and addresses of the office at the headquarters level with direct operational responsibility for managing a program. A telephone number is provided in cases where a Regional or Local Office is not normally able to answer detailed inquiries concerning a program. Also listed are the name(s) and telephone number(s) of the information contact person(s) who can provide additional program information to applicants.

Additional Contact Information (Appendix IV)

Due to the large volume of regional and local office contacts for most agencies, full contact information is also provided separately here in a PDF format: