Community Development Block Grants/State's Program (14.228)
Program
14.228 Community Development Block Grants/State's Program
Federal Agency
COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Authorization
Housing and Community Development Act of 1974, Title I, as amended, Public Law 93-383, 88 Stat. 633, 42 U.S.C. 5301.
Program Number
14.228
Last Known Status
Active
Objectives
The primary objective of this program is the development of viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income. Each activity funded must meet one of the program's National Objectives by either: benefiting low and moderate income families; aiding in the prevention or elimination of slums or blight; or meeting other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community where other financial resources are not available.
Types of Assistance
Formula Grants.
Uses and Use Restrictions
States develop their own programs and funding priorities. Each State may elect to administer Community Development Block Grant (CDBG) funds for areas that do not receive CDBG entitlement grants (14.218). If, a State were to decide to stop administering the CDBG program, the funds that would have been allocated to the State would be reallocated among the other States. In States which elect to administer the nonentitlement funds, HUD awards the formula grants to the States under the CDBG/State's Program. All States except Hawaii administer CDBG funding for nonentitlement areas through the State CDBG Program. In States which do not elect to administer the nonentitlement funds, HUD awards competitive grants to units of general local government under the CDBG/Small Cities Program (14.219). Each State may use $100,000 plus up to two percent of its grant to administer the program and must match each Federal dollar in excess of $100,000 used for administration with a dollar of its own. Each State may use up to one percent of its grant to provide technical assistance to local governments and nonprofit program recipients. Units of general local government funded by the State may undertake a wide range of activities directed toward neighborhood revitalization, economic development, or provision of improved community facilities and services. Specific activities that can be carried out with block grant funds include acquisition of real property, relocation and demolition, rehabilitation of residential and nonresidential structures, direct assistance to facilitate and expand homeownership among persons of low and moderate income, and provision of public facilities and improvements, such as water and sewer facilities, streets, and neighborhood centers. In addition, block grant funds may be used to pay for certain public services within certain limits. Neighborhood-based nonprofit organizations, local development corporations, Small Business Investment Companies, or other nonprofit organizations serving the development needs of nonentitlement areas may act as subgrantees to carry out neighborhood revitalization or community economic development projects in furtherance of block grant objectives. Recipients may provide assistance to for-profit entities when the recipient determines that the provision of such assistance is appropriate to carry out an economic development project. The projected use of funds must be developed to give maximum feasible priority to activities which benefit low and moderate income persons or aid in the prevention or elimination of slums or blight and the projected use of funds may also include activities which the applicant certifies are designed to meet other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community where other financial resources are not available to meet such needs. The aggregate use of over a period specified by the State, but not exceeding three years, must ensure that not less than 70 percent of the funds received benefit low and moderate income persons.
Eligibility Requirements
Applicant Eligibility
State governments. States must distribute the funds to units of general local government in nonentitlement areas.
Beneficiary Eligibility
The principal beneficiaries of CDBG funds are low and moderate income persons. For metropolitan areas, low and moderate income is generally defined as a member of a family having an income equal to or less than the Section 8 low income limit established by HUD. For non-metropolitan areas, low and moderate income is generally defined as 80 percent of the median income for non- metropolitan areas of the State, as adjusted by family size.
Credentials/Documentation
The State must certify that with respect to nonentitlement areas the State will: (1) engage in planning for community development activities, (2) provide technical assistance, (3) consult with local officials from nonentitlement areas in determining methods for distributing funds, and (4) each unit of general local government to receive funds must identify its housing and community development needs, the needs of low and moderate income persons, and the activities to be undertaken to meet such needs. The State must submit a Consolidated Plan and annual action plan, which contains its method of distributing CDBG funds. The State must also certify that (1) it has met the statutory citizen participation requirements, (2) it will conduct its grant in conformance with the Civil Rights Act of 1964 and the Fair Housing Act, (3) all activities will meet one of the three national objectives described under "OBJECTIVES", and (4) it will comply with the other provisions of Title I and all applicable laws. This program is covered under OMB Circular No. A-87 or comparable cost principles established by the States.
Application and Award Process
Preapplication Coordination
None. This program is excluded from coverage under Part 85 and E.O. 12372.
Application Procedure
Submit a Consolidated Plan, an annual action plan and certifications to HUD. The Consolidated Plan and annual action plan cover four major formula-distribution HUD community development programs, including CDBG. The annual action plan must contain the method by which the State will distribute its CDBG funds.
Award Procedure
HUD will provide funds after the State submits its Consolidated Plan, annual action plan and Certifications.
Deadlines
Consolidated Plans may be submitted between November 15 and August 16 of each fiscal year in which the State will administer funds.
Range of Approval/Disapproval Time
Appeals
The procedure is described in regulations (24 CFR Part 570 Subpart I).
Renewals
Not applicable.
Assistance Considerations
Formula and Matching Requirements
(1) Allocations to States are based on a dual formula under Section 106 of the Act using statistical factors. Allocations for each State are based on an amount equaling the greater of the amounts calculated under two formulas. The factors involved in the first formula are population, extent of poverty and extent of overcrowding, weighted 0.25, 0.50, and 0.25, respectively. The factors involved in the second formula are population, poverty, and age of housing, weighted 0.20, 0.30, and 0.50, respectively. The statistical factors used for fund allocation are (1) total resident population for all places in the nation from the 2000 Census; (2) number of persons with incomes below the poverty level from 1999 Census estimates; (3) number of housing units with 1.01 or more persons per room from the source 1990 Census; and (4) age of housing; number of year-round housing units built in 1939 or earlier from the source 1990 Census. The statistical factors for each State have been reduced to reflect only the non-entitled area; that is, the State area excluding metropolitan cities and urban counties. Address questions concerning the formula to Robert Meehan, Systems Development and Evaluation Division, Community Planning and Development, 451 7th Street, SW. Washington, DC 20410. Telephone: (202) 708-0790. (The amount of non-entitlement funds allocated to a State is not affected by whether the State or HUD administers the fund in that State.)
Length and Time Phasing of Assistance
Assistance is provided to States on an annual basis. Individual States may impose time limitations on the implementation of grants to recipients.
Post Assistance Requirements
Reports
Annual performance report covering all programs included in the Consolidated Plan.
Audits
In accordance with the provisions of OMB Circular No. A- 133, "Audits of State and Local Governments and Non-Profit Organizations", nonfederal entities that expend $300,000 or more in a year shall have a single audit conducted for that year in accordance with the provisions of the circular.
Records
Records must demonstrate that the State has met the requirements of Title I of the Act.
Program Accomplishments
The fiscal year 2002 funding level provided an estimated 16,917 housing units for nonentitlement communities, and created approximately 40,376 jobs.
Financial Information
Account Identification
86-0162-0-1-451.
Obligations
FY 02 $1,297,125,000; FY 03 est $1,295,972,000; and FY 04 est $1,322,720,850.
Range and Average of Financial Assistance
Amount determined by formula.
Regulations, Guidelines and Literature
24 CFR Part 570.
Related Programs
14.218, Community Development Block Grants/Entitlement Grants; 14.219, Community Development Block Grants/Small Cities Program.
Information Contacts
Regional or Local Office
Contact the appropriate HUD Field Office listed in Appendix IV of the Catalog.
Headquarters Office
State and Small Cities Division, Office of Block Grant Assistance, Community Planning and Development, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. Telephone: (202) 708-1322. Use the same number for FTS.
Web Site Address
http://www.hud.gov/offices/cpd/about/cpd_programs.cfm
Examples of Funded Projects
Projects are selected by States.
Criteria for Selecting Proposals
All States are eligible if they meet the requirements outlined in Credentials/Documentation. States are responsible for determining the methods of distribution of funds to their units of general local government in nonentitlement areas.
