BASICALLY
CDBG
Kathleen M. Bialas
OGC/HHQ/HUD
CDBG PROGRAM
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Title I of the Housing & Community Development
Act of 1974, as amended [42 U.S.C. 5301 et seq.]
Regulations: 24 CFR Part 570
Annual formula grants to states and local
governments (metro cities with populations of
50,000 and urban counties with populations of
200,000)
States and local governments must have an
approved Consolidated Plan
States must make grants to smaller local
governments
PRIMARY OBJECTIVE
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Development of viable urban
communities, principally for
low/mod persons, through:
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Decent housing
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Suitable living environment
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Expanded economic opportunity
All activities must meet national
objective and be eligible
NATIONAL OBJECTIVES
NATIONAL
OBJECTIVES
LOW/MOD
Area
Benefit
Housing
Limited
Clientele
Jobs
SLUM/BLIGHT
Area
Basis
Spot
Basis
Urban
Renewal
URGENT
NEED
!
LOW & MODERATE INCOME
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“Low & moderate income” for CDBG
means 80% of area median income
[equals “low income” in the HOME,
Section 8, and Public Housing programs]
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Annual income definitions:
 Section 8 Annual Income (24 CFR Part 5)
 Census Long Form
 IRS 1040 Series (Long Form)
LOW/MOD BENEFIT
HOUSING
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To meet the national objective, housing structures
must be occupied by low/mod households
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One unit structures occupied by low/mod
household
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One unit of duplex occupied by low/mod
household
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51% of 3+ units occupied by low/mod household
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Aggregation allowed in some instances
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Reg cite §570.208
LOW/MOD BENEFIT
HOUSING
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May have less than 51% low/mod family
occupancy:
 To reduce development cost of the new construction
of multi-family, non-elderly rental housing project
 Not less than 20% of the units will be occupied by
low/mod households at affordable rents
 CDBG funds pay prorated share of total
development costs
LOW/MOD BENEFIT
HOUSING
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Rents charged -- affordable rents
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Grantee must adopt and make public its
standards for determining “affordable
rents”
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Reg cite §570.208
LOW/MOD BENEFIT
OVERALL REQUIREMENT
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Requires that 70% of all CDBG
expenditures benefit low/mod persons
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Cumulative expenditures, not budgeted
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Certification period of 1-3 years
Reg cite §570.201
ELIGIBLE ACTIVITIES
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Wide variety possible
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Real property activities
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Economic development
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Public services
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CBDO activities
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Planning and administration
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Others
Reg cites §570.201 - §570.206
RENTAL HOUSING ELIGIBLE
ACTIVITIES
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May use CDBG to acquire or rehab
rental housing under §570.202
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Assistance may be loans, grants,
loan guarantees, interest subsidies
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Properties may be:
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Publicly or privately owned
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Residential or mixed use
OTHER ACTIVITIES TO
SUPPORT HOUSING
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Acquisition: Grantees may acquire real
property to be used for housing and resell
it at a lower price to developers.
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Clearance: Grantees may clear a
property that they own to be used for
housing and resell it at a lower price to
developers.
OTHER ACTIVITIES TO
SUPPORT HOUSING
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Infrastructure and site improvements:
Grantees may construct, reconstruct,
rehabilitate, or install public facilities and
improvements, including streets,
sidewalks, parks, water, sewer, and utility
lines on public property in support of
housing.
COMMUNITY BASED DEVELOPMENT
ORGANIZATIONS (CBDOs)
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Reg cite §570.204
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CBDOs may carry out:
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Neighborhood revitalization project
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Community economic development project
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Energy conservation project
All activities they undertake must be part
of one of these types of projects -- which
may include new housing construction
CBDO REQUIREMENTS
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Organization must:
 Be organized under state/local law for specific
community development activities
 Operate in specific geographic area within grantee’s
jurisdiction
 Have as its primary focus the improvement of
economic/ physical/social aspect of service area,
particularly for low/mod persons
 Have a governing body of at least 51% low/mod
reps
CBDO GOVERNING BODY
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To meet the 51% low/mod representation:
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Residents of service area
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Owners/officers of entities located in service area OR
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Reps of low/mod groups in service area
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Less than 1/3 of board may be elected/
appointed public officials or employees of
grantee
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Governing body must be nominated by
general membership
OTHER CBDO
REQUIREMENTS
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If CBDO is a for-profit entity, profits to
shareholders/ members must be
incidental to operations
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Single-neighborhood-based CHDOs
automatically meet CBDO requirements;
other CHDOs must qualify
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Certain SBA organizations may qualify
OTHER REQUIREMENTS
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Nondiscrimination
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Labor standards [Davis-Bacon wages]
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Environmental review
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Relocation benefits and replacement of
housing converted or demolished
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Lead-based paint
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Subpart K of the regulations
Information on website
www.hud.gov/offices/cpd/
www.hud.gov/offices/cpd/communitydevelopment/programs/