The Community Development Block Grant (CDBG) Program was established by the U.S. Congress in 1974 and is administered by the Department of Housing and Urban Development (HUD). Its primary goal is to develop viable urban communities by providing decent housing, fostering a suitable living environment, and expanding economic opportunities for low- and moderate-income individuals. The program operates under three National Objectives: benefiting low- and moderate-income persons, preventing or eliminating slums or blight, and addressing urgent community needs. Every activity funded by the program must align with at least one of these objectives, except for costs related to the administration of the program.
The program aligns with the Town’s Consolidated Plan, which establishes funding priorities over a five-year period. The current priority goals include providing housing for people experiencing homelessness, housing for low- and moderate-income households, integrated housing for people with service needs, and supporting community and economic development services. Projects funded through the program must contribute to one or more of these priority areas.
Eligible uses of CDBG funds include real property acquisition, rehabilitation of residential and commercial properties, demolition, public facilities and improvements, economic development activities, and public services. Specific eligible activities include property acquisition, relocation assistance, rehabilitation services, public infrastructure improvements such as sidewalks and parks, and business assistance programs. However, CDBG funds cannot be used for political activities, certain income payments, the construction of new housing, or expenses related to government buildings.
Funding caps are applied to certain activities within the CDBG program. Specifically, a maximum of 15% of the CDBG funding can be allocated to public services in a given program year, and a maximum of 20% can be used for program administration. The performance agreement for CDBG funding lasts for one program year, and organizations must work with the Town to amend their contract if funds are not fully expended within that time. Failure to use funds in a timely manner may result in HUD reclaiming the unspent funds and reducing future allocations.
The terms of funding for rehabilitation projects vary depending on the amount awarded. Additional details on financing terms can be found in the Affordable Housing Funding Guide provided by the Town. More information about the CDBG program can be accessed through the Federal CDBG website and the Town’s CDBG website.
