Colonia Fund - Construction (CFC)

The Texas Community Development Block Grant Program (TxCDBG) is administered by the Texas Department of Agriculture under the authority of the U.S. Department of Housing and Urban Development (HUD). It was established following the federal Housing and Community Development Act of 1974, which consolidated several categorical development programs into a flexible block grant framework. The program was later authorized for state administration by the Omnibus Budget Reconciliation Act of 1981, enabling Texas to oversee the allocation of CDBG funds to smaller communities that do not receive direct entitlement funding from HUD. The overarching mission of TxCDBG is to strengthen communities by ensuring access to decent housing, fostering suitable living environments, and expanding economic opportunities, particularly for low- and moderate-income residents. The program operates under three federal National Objectives that every funded project must satisfy: to benefit low- and moderate-income persons, to aid in preventing or eliminating slums or blight, or to meet urgent needs that pose an immediate threat to public health and safety. In practice, most funded projects meet the first objective, requiring that at least 51 percent of beneficiaries are low- to moderate-income. The income eligibility standards are aligned with HUD’s Section 8 Housing Assistance definitions and local or statewide non-metropolitan median family income levels. Some awards also fall into urgent need categories, especially following disaster events, or address deteriorated downtown infrastructure under revitalization initiatives. Funding is distributed annually through HUD allocations to the state. These funds are made available to non-entitlement communities, which include cities with populations under 50,000 and non-metropolitan counties with fewer than 200,000 residents. Larger entitlement cities such as Dallas, Houston, and San Antonio receive funding directly from HUD and are therefore not eligible to apply through TxCDBG. The Texas Department of Agriculture publishes an annual Action Plan that codifies distribution methods, funding levels, and program criteria. Competitive funds are awarded through regionally based competitions and are managed by executed contracts between the state and local governments. The TxCDBG program supports several distinct funding categories. The Community Development Fund is the largest and targets public facility improvements, such as water and wastewater systems, drainage, street improvements, and housing activities. For the 2025–2026 cycle, applications are due December 9, 2024, with a maximum award of $750,000. Other categories include the Downtown Revitalization Program, which provides up to $1,000,000 for historic and rural downtown infrastructure improvements with a deadline in March 2025; the Colonia Fund, which supports designated colonia areas along the Texas-Mexico border with a December 9, 2024 deadline and a $1,000,000 ceiling; and the State Urgent Need Fund, which supports disaster-related infrastructure with awards up to $500,000 or $1,000,000 for multi-jurisdictional projects on an as-needed basis. Eligible applicants are limited to non-entitlement cities and counties, and funds may not be passed directly to individuals, private businesses, or nonprofits except under specific economic development arrangements. Local governments are responsible for documenting that proposed projects meet at least one national objective, and each award must follow strict federal guidelines on procurement, reporting, and environmental review. The program emphasizes projects that directly improve the quality of life for low- and moderate-income Texans, eliminate hazardous conditions, or restore essential infrastructure after disasters. The application process requires submission through the Texas Department of Agriculture’s online grants portal, with program-specific application forms and supporting documentation. Awards are reviewed and scored based on criteria such as need, impact, and program alignment. Successful applicants execute contracts with TDA and follow the TxCDBG Project Implementation Manual to ensure compliance with federal and state requirements. Questions on reporting and program compliance may be directed to CDBGReporting@TexasAgriculture.gov, while application support is available at CDBGApps@TexasAgriculture.gov. Timelines for review and notification vary by fund category, but the state generally follows an annual cycle with recurring opportunities for eligible local governments.

Ensure project clearly meets one of the three national objectives; use the CDBG Project Implementation Manual; reference the latest income eligibility documentation for beneficiary qualification.