Community Development Block Grant (CDBG) Program

The FY27 Community Development Block Grant (CDBG) offered by the City of Iowa City provides targeted funding to support public facility improvements and the acquisition of affordable rental housing that benefits low- and moderate-income residents. The program is funded by the U.S. Department of Housing and Urban Development (HUD) and administered locally by the City, aligning with federal guidelines under 24 CFR Part 570. The program seeks to foster viable urban communities through strategic investments that expand economic opportunity, improve living environments, and ensure access to affordable housing for income-eligible individuals and households. For the FY27 cycle, the City of Iowa City anticipates approximately $440,000 in total CDBG funding, with $150,000 expected for public facility improvements and $290,000 earmarked for rental housing acquisition. These figures are estimates and remain subject to final allocations by HUD. Eligible activities include the acquisition of real property for rental housing and improvements to facilities serving predominantly low- to moderate-income populations. In contrast, ineligible activities encompass direct financial assistance to individuals, construction of new housing (except certain shelter types), rehabilitation of owner-occupied units, and projects that trigger displacement or violate local and federal regulations. The application window opens December 29, 2025, and closes promptly at noon on January 30, 2026. Late or incomplete submissions will not be reviewed. Applications are submitted via the Neighborly Software Participant Portal. Prospective applicants must select the appropriate application type—Public Facilities or Rental Housing Acquisition—and are strongly encouraged to attend the applicant workshop held via Zoom on January 13, 2026. Those unable to attend should contact city staff to arrange a separate consultation. All rental housing projects must also submit a completed pro forma, as required for underwriting, and align with HUD rent restrictions and sustainability throughout the compliance period. Evaluation of applications is based on a competitive point system. Criteria include the accuracy of budget documentation, matching funds leveraged, community partnerships, population served, location in neighborhoods lacking affordable housing, project readiness, and long-term impact. Preference is given to projects assisting extremely low-income households or special populations such as persons with disabilities or experiencing homelessness. Sustainability features like energy-efficient appliances are also rewarded. The City will prioritize proposals that align with the broader goals of equity, distribution of housing, and efficient use of resources. Selected projects must enter into a formal agreement with the City. Disbursements will be provided on a reimbursement basis only after execution of the agreement and completion of required environmental reviews. Compliance periods vary by project type and funding amount, with public facilities typically subject to a conditional occupancy loan that includes a security interest in the property. The loan is forgiven if project terms are satisfied through the compliance period, calculated by dividing the total CDBG award by $10,000 (minimum five years, maximum twenty). Housing activities are subject to affordability periods, zero-interest loans, and strict rental eligibility documentation requirements. Applicants may direct questions to Sam Turnbull ([email protected] | 319-356-5237) or Brianna Thul ([email protected] | 319-356-5240). Clarifying questions from city staff will be issued by March 6, 2026, with award recommendations made by the Housing and Community Development Commission on March 23, 2026. City Council approval is anticipated in May 2026. The program year begins on July 1, 2026, contingent on receipt of HUD funding and completion of the environmental review process. This program does not recur on a predictable annual cycle, and applicants should monitor future updates for any subsequent opportunities.

Strongly encourage attendance at the applicant workshop; scoring emphasizes geographic diversity and leveraged funding.