1. BASICALLY CDBG
Kathleen M. Bialas
OGC/HHQ/HUD
Pages in Book:
None 1

2. CDBG PROGRAM
Title I of the Housing & Community Development Act of 1974, as amended [42 U.S.C 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 8 9 8

3. PRIMARY OBJECTIVE
Development of viable urban communities, principally for low/mod persons, through:
Decent housing
Suitable living environment
Expanded economic opportunity
All activities must meet national objective and be eligible 10 11 10

4. ! NATIONAL OBJECTIVES NATIONAL OBJECTIVES LOW/MOD SLUM/BLIGHT
URGENT NEED !
Area Benefit
Limited Clientele
Area Basis
Spot Basis
Housing
Jobs
Urban Renewal

5. LOW & MODERATE INCOME
“Low & moderate income” for CDBG means 80% of area median income [equals “low income” in the HOME, Section 8, and Public Housing programs]
Annual income definitions:
Section 8 Annual Income (24 CFR Part 5)
Census Long Form
IRS 1040 Series (Long Form)

6. LOW/MOD BENEFIT HOUSING
To meet the national objective, housing structures must be occupied by low/mod households
One unit structures occupied by low/mod household
One unit of duplex occupied by low/mod household
51% of 3+ units occupied by low/mod household
Aggregation allowed in some instances
Reg cite § 15 16 15

7. LOW/MOD BENEFIT HOUSING
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

8. LOW/MOD BENEFIT HOUSING
Rents charged -- affordable rents
Grantee must adopt and make public its standards for determining “affordable rents”
Reg cite §

9. LOW/MOD BENEFIT OVERALL REQUIREMENT
Requires that 70% of all CDBG expenditures benefit low/mod persons
Cumulative expenditures, not budgeted
Certification period of 1-3 years
Reg cite § 45 34 45

10. ELIGIBLE ACTIVITIES Wide variety possible
Real property activities
Economic development
Public services
CBDO activities
Planning and administration
Others
Reg cites § § 26 27 26

11. RENTAL HOUSING ELIGIBLE ACTIVITIES
May use CDBG to acquire or rehab rental housing under §
Assistance may be loans, grants, loan guarantees, interest subsidies
Properties may be:
Publicly or privately owned
Residential or mixed use
106

12. OTHER ACTIVITIES TO SUPPORT HOUSING
Acquisition: Grantees may acquire real property to be used for housing and resell it at a lower price to developers.
Clearance: Grantees may clear a property that they own to be used for housing and resell it at a lower price to developers.

13. OTHER ACTIVITIES TO SUPPORT HOUSING
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.

14. COMMUNITY BASED DEVELOPMENT ORGANIZATIONS (CBDOs)
Reg cite §
CBDOs may carry out:
Neighborhood revitalization project
Community economic development project
Energy conservation project
All activities they undertake must be part of one of these types of projects -- which may include new housing construction
Pages in Book:
Explain the types of activities generally available to CBDO
Note that these categories are pretty broad 66

15. CBDO REQUIREMENTS 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
Pages in Book:
Go over definition
Keys:
Accountability to residents
Separation from govt (firewall)
Works on CD and ED issues 67

16. CBDO GOVERNING BODY To meet the 51% low/mod representation:
Residents of service area
Owners/officers of entities located in service area OR
Reps of low/mod groups in service area
Less than 1/3 of board may be elected/ appointed public officials or employees of grantee
Governing body must be nominated by general membership
Pages in Book:
This helps define accountability to residents
Note the difference from CHDO
31% for CHDO
51% for CBDO
Thus, not all CHDO = CBDO 68

17. OTHER CBDO REQUIREMENTS
If CBDO is a for-profit entity, profits to shareholders/ members must be incidental to operations
Single-neighborhood-based CHDOs automatically meet CBDO requirements; other CHDOs must qualify
Certain SBA organizations may qualify
Pages in book:
Explain when CHDO automatically qualifies 69

18. OTHER REQUIREMENTS Nondiscrimination
Labor standards [Davis-Bacon wages]
Environmental review
Relocation benefits and replacement of housing converted or demolished
Lead-based paint
Subpart K of the regulations

19. Information on website www.hud.gov/offices/cpd/