FAQ

• Are there certain criteria to receive CDBG Funding?

  Yes. Community applications for CDBG funds must meet the “National Objectives” established by Congress.

• How can CDBG funds be used by a community to address its affordable housing needs?

  CDBG funds can be used to:

  • Rehabilitate homes owned and occupied by LM persons or rental units in which at least 51 percent of the tenants are or will be LM and will pay “affordable rents”
  • Acquire property to be sold to LM persons or to be converted primarily to rental housing, with at least 51 percent of the units to be occupied by LM persons;
  • Acquire or clear property to be sold or leased to a private developer;
  • Construct off-site improvements for a developer who will build homes at least 51 percent of which will be sold to or constructed by (self-help) LM persons; or
  • Construct or rehabilitate shelters and transitional housing for the homeless.
• How can CDBG funds be used for economic development?

  CDBG funds can be used to:

  • Lend funds to a business;
  • Provide the business with a loan guarantee;
  • Install a water line allowing a business to locate or expand;
  • Acquire land to be leased to a business; or
  • Provide training and support services to low-to-moderate income persons wishing to start their own businesses.
  • In most cases, the business must agree to create or retain a reasonable number of jobs in relation to the CDBG assistance and hire 51 percent LM income persons.
• Is public involvement necessary for the CDBG application process?

  Yes. Every community applying for CDBG funds must hold at least two public hearings to let residents identify possible projects. Public hearing notices also must be published in the local newspapers. These notices must be published before the community can send its application to HUD, and they must inform the public about the process to comment on projects recommended by elected officials. Notice of public meetings can also be posted at the local city hall.

• What are the “National Objectives”?

  They require each project to:

  1. Primarily benefit low-to moderate-income persons,
  2. Prevent or eliminate slum and blight, or
  3. Meet other urgent community development needs relating to health and safety issues.
• What are the liabilities of the CDBG program?

  Like all federally funded programs, the CDBG program requires that the community comply with a number of requirements relating to record keeping, competitive procurement and public participation. The community must also comply with other federal “overlay” laws. These relate to protection of the environment, acquisition and relocation, civil rights/nondiscrimination and the payment of Davis-Bacon prevailing wages and other construction labor standards.

• What can CDBG funds be used for?

  A wide variety of activities including:

  • Street, water and wastewater improvements;
  • Housing rehabilitation or buying land for new housing development;
  • The construction of or improvements to parks, libraries, health clinics, shelters for domestic violence victims or the homeless;
  • Salaries of people who provide public services such as child care or job training, or paying for furniture for such programs; and
  • Loans and other kinds of assistance so businesses can hire new employees.
• What constitutes “low and moderate income”?

  “Low and moderate income” refers to the total annual family income that is less than 80 percent of the average income for same-size families in that area.