Community Development Block Grants (CDBG)

Community Development Block Grants (CDBG) — authorized under Title I of the Housing and Community Development Act of 1974 (42 U.S.C. §§ 5301–5321) — distribute approximately $3.3 billion annually to cities, counties, and states for neighborhood revitalization, affordable housing, and economic development. CDBG is one of the most flexible federal grant programs: communities can use funds for housing rehabilitation, infrastructure, public services, job creation, demolition of blighted structures, and economic development loans — as long as at least 70% of spending benefits low-to-moderate income (LMI) persons (generally defined as below 80% of area median income). Entitlement communities — cities with populations over 50,000 and counties over 200,000 — receive formula allocations directly from HUD based on poverty, population, and housing age; states distribute CDBG to smaller "non-entitlement" communities. CDBG's most significant supplemental program is CDBG-Disaster Recovery (CDBG-DR): Congress appropriates billions in supplemental CDBG funding after major disasters (Hurricanes Harvey, Irma, and Maria generated over $35 billion in CDBG-DR; Hurricanes Helene and Milton in 2024 are expected to trigger additional rounds). CDBG has historically enjoyed strong bipartisan support because it channels federal money directly to local governments with wide flexibility. The Trump administration has proposed eliminating CDBG multiple times, most recently in the FY2026 budget — Congress has continued to fund it each time.

Current Law (2026)

Legal Authority

• 42 U.S.C. § 5301 — Congressional findings and declaration of purpose (elimination of slums and blight; provision of decent housing; suitable living environment; expanding economic opportunities principally for low- and moderate-income persons)
• 42 U.S.C. § 5304 — Statement of activities and review (grantees must submit a Consolidated Plan describing needs, priorities, and proposed activities; citizen participation required; annual Action Plan)
• 42 U.S.C. § 5305 — Eligible activities (acquisition of real property, public facilities, infrastructure improvements, housing rehabilitation, code enforcement, demolition, relocation, public services — must meet one of three national objectives)
• 42 U.S.C. § 5306 — Allocation and distribution of funds (formula based on population, poverty, housing overcrowding, age of housing, and growth lag; 70% to entitlement communities, 30% to states for non-entitlement areas)
• 42 U.S.C. § 5318 — Urban Development Action Grants (UDAG) (largely defunded but the authority for economic development in distressed communities remains)

How It Works

CDBG is one of the longest-running and most flexible federal programs for community development — providing approximately $3.3 billion annually to cities, counties, and states for a wide range of activities aimed at helping low- and moderate-income communities. Unlike many federal programs with narrow eligible uses — such as Public Housing Programs — CDBG gives local governments significant discretion in how they spend their funds.

CDBG funds flow through two channels. Entitlement communities — cities with populations of 50,000 or more and urban counties — receive grants directly from HUD based on a dual formula considering population, poverty rate, overcrowded housing, age of housing stock, and population growth lag; the higher of the two formula calculations determines the grant. The remaining 30% goes to states, which distribute funds to smaller cities and rural communities through competitive or formula processes. Every funded activity must meet one of three national objectives: benefit to low- and moderate-income persons (the primary objective — at least 70% of funds must satisfy this over a 1-3 year period); prevention or elimination of slums or blight; or urgent need (rarely used outside disaster contexts). The program's flexibility is its defining strength — common uses include housing rehabilitation (fixing homes for low-income owners and renters), public infrastructure (streets, sidewalks, water/sewer in low-income neighborhoods), economic development loans and grants to businesses creating jobs for low-income workers, public services like youth programs or senior services (capped at 15% of the grant), demolition of blighted structures, code enforcement in deteriorating areas, and planning and administration (capped at 20%).

Congress periodically appropriates supplemental CDBG-Disaster Recovery (CDBG-DR) funds after major disasters — often billions of dollars targeted at long-term recovery needs that FEMA assistance doesn't cover: rebuilding housing, repairing infrastructure, and revitalizing local economies. Cumulative CDBG-DR appropriations have exceeded $90 billion for hurricanes, flooding, and other disasters. All CDBG grantees must adopt a Citizen Participation Plan ensuring that residents — especially low- and moderate-income residents — have meaningful opportunities to weigh in on how funds are spent through public hearings, comment periods, and access to program records.

How It Affects You

If you live in a city or county and want to know how CDBG is being spent near you: Every CDBG entitlement community (cities over 50,000, counties over 200,000) must publish an Annual Action Plan describing how they'll spend their CDBG allocation that year, and a Consolidated Plan every 5 years laying out their broader community development strategy. These documents are public — search your city or county government's website for "CDBG Annual Action Plan" or request it from your city's community development or housing department. HUD also maintains a grants management system (IDIS) where program data is publicly accessible at hud.gov. If infrastructure, housing rehab, or community services matter to you, showing up at the annual public hearing where communities take input on their Action Plan is one of the most direct ways to influence how this flexible federal money gets allocated.

If you're a low-income homeowner and your house needs repairs: CDBG is the most common funding source for local housing rehabilitation programs — grants or low-interest deferred loans for roof replacement, heating system repair, accessibility modifications for seniors and disabled residents, lead paint abatement, and structural repairs. To find out if your city or county runs a CDBG housing rehab program, contact your city or county housing or community development department. Eligibility typically requires income at or below 80% of Area Median Income (AMI). Grants are often provided as "forgivable loans" — no repayment required if you stay in the home for a specified period (typically 5–10 years). Waitlists are common since demand typically exceeds funding. Apply early; programs often fund on a first-come, first-served basis within the income-eligible pool.

If your community was hit by a major disaster: CDBG-Disaster Recovery (CDBG-DR) is one of the largest post-disaster housing recovery funding sources in the federal system — past storms have triggered billions in supplemental CDBG-DR appropriations. After Hurricanes Helene and Milton (2024), additional CDBG-DR funding is expected to flow to affected states. CDBG-DR programs typically fund buyouts of flood-prone properties, home repair and reconstruction, infrastructure restoration, and economic recovery loans. These programs are administered by states, not directly by HUD, and have historically had very long implementation timelines — the Harvey/Irma/Maria CDBG-DR money took years to reach individual homeowners. If your area received a disaster declaration, register with FEMA first (FEMA individual assistance is faster), then watch for state-administered CDBG-DR program announcements.

If you run a nonprofit serving low-income residents: Many cities sub-grant a portion of their CDBG allocation to nonprofits for public services — the cap is 15% of the city's CDBG grant. Common sub-grant activities: homeless services, youth programs, food pantries, housing counseling, senior programs, and job training. The city typically issues a Request for Proposals or Notice of Funding Availability (NOFA) for these sub-grants, often in the fall for the following program year. Grant amounts from small to mid-sized cities are commonly $25,000–$100,000 per year per organization. Watch your city's community development department website and sign up for notifications — these are competitive grants with limited notice.

State Variations

• CDBG is a federal program administered through HUD, but states play a key role distributing funds to non-entitlement (smaller) communities
• State CDBG programs set their own priorities and competitive processes for smaller communities
• Some states supplement CDBG with state-funded community development programs
• Local matching requirements and eligible activities may vary based on state CDBG program design

Implementing Regulations (CFR)

• 24 CFR Part 570 — CDBG program regulations:

  • 24 CFR 570.1 — Purpose and primary objective (joint community development objectives, elimination of slums and blight, benefit to low- and moderate-income persons)
  • 24 CFR 570.200 — General policies (eligible activities must meet a national objective; subrecipient and contractor requirements)
  • 24 CFR 570.400 — State election to administer (states may elect to administer CDBG funds for non-entitlement areas; state-administered program requirements)
  • 24 CFR 570.429 — Work study program (CDBG-funded community development work study program for graduate and undergraduate students)

• 24 CFR Part 1003 — Community Development Block Grants for Indian Tribes and Alaska Native Villages (ICDBG): A separate and parallel CDBG program specifically for federally recognized Indian tribes and Alaska Native villages — not subject to the entitlement formula or state distribution channel, but instead administered competitively through HUD's Office of Native American Programs (ONAP) regional offices. Key provisions:

  • § 1003.2 — Program objective: identical primary objective as the main CDBG program — development of viable communities through decent housing, suitable living environment, and expanded economic opportunities for low- and moderate-income persons
  • § 1003.3 and § 1003.100 — Two grant types: (1) Single purpose grants — competitive grants for specific housing rehabilitation, infrastructure, economic development, or planning projects; (2) Imminent threat grants (Subpart D) — expedited assistance for tribes facing urgent health and safety crises; Area ONAPs may issue a letter to proceed immediately if conditions qualify as an imminent threat to health and safety
  • § 1003.5 — Eligible applicants: any Indian tribe, band, group, or nation (including Alaska Indians, Aleuts, and Eskimos) and any Alaska Native village; the tribe must be federally recognized — a threshold that tracks the BIA Part 83 acknowledgment process; non-recognized groups cannot apply
  • § 1003.101 — Fund allocation to Area ONAPs: each regional ONAP receives a base allocation ($1 million) plus a population-based share; Area ONAPs then run competitive selections within their geographic jurisdiction rather than formula grants to individual tribes
  • § 1003.201 — Eligible activities: same broad menu as the main CDBG program — acquisition, rehabilitation, infrastructure, economic development, planning, and program administration; the primary objective requirement (benefit to low/moderate income) applies
  • § 1003.207 — Ineligible activities: political activities, purchase of equipment for general government operation, operating and maintenance expenses for already-built facilities, and new housing construction (rehabilitation is eligible; new construction is not)
  • § 1003.301 and § 1003.303 — Competitive selection: applications are scored on up to five rating factors set by each Area ONAP; threshold disqualification for tribes with outstanding ICDBG obligations in arrears without a repayment schedule
  • § 1003.510 — Indian preference requirements: grants under Part 1003 are subject to Section 7(b) of the Indian Self-Determination and Education Assistance Act — contracts and subcontracts funded by ICDBG must provide preferences in employment and training to Indian people living near the project; preference must be given to Indian organizations and Indian-owned businesses in procurement
  • § 1003.601 — Nondiscrimination: standard CDBG nondiscrimination requirements apply; HUD waives the Section 109 (Title I Act) requirements for tribal grantees as permitted under the statute, but Race, color, national origin, and other civil rights protections still apply
  • § 1003.603 — Labor standards: HUD waives the Davis-Bacon prevailing wage requirements (Section 110 of the Act) for ICDBG grants — tribal construction projects do not need to comply with Davis-Bacon, a significant cost and administrative difference from the main CDBG program
  • § 1003.700–1003.703 — Performance review and remedies: HUD reviews each tribe's grant performance annually; corrective actions range from technical assistance to fund reduction or recapture to termination and referral to the Inspector General

  ICDBG funding runs approximately $65 million annually — a fraction of the main $3.3 billion CDBG program — and reaches roughly 100–150 tribal grantees per year through competitive selection. Common ICDBG projects include water/sewer system construction, senior center renovation, housing rehabilitation for elderly tribal members, and small business development infrastructure. The tribal program's competitive structure differs fundamentally from entitlement CDBG: tribes cannot count on a recurring annual allocation and must reapply competitively each cycle, which creates both flexibility (unneeded slots go elsewhere) and instability (successful communities must repeat the application process rather than building on a baseline).

• 24 CFR Part 91 — Consolidated Submissions for Community Planning and Development Programs — the unified planning and reporting framework that ties CDBG, HOME, ESG, and HOPWA formula grants together under a single planning document submitted to HUD. Before Part 91, jurisdictions had to prepare four separate application/planning documents for these programs; the Consolidated Plan creates one community-wide housing and community development strategy that covers all four. Key provisions:

  • §§ 91.1–91.2 — Covered programs and purpose: the Consolidated Plan is required for jurisdictions receiving any of the following: CDBG (formula entitlement for cities over 50,000 and urban counties), HOME Investment Partnerships, Emergency Solutions Grants (ESG), and Housing Opportunities for Persons With AIDS (HOPWA); states that administer CDBG for non-entitlement areas also submit consolidated plans; the Plan must describe how the jurisdiction will address housing and community development needs of low- and moderate-income residents
  • § 91.10 — Consolidated program year: all four programs are administered on a single consolidated program year established by the jurisdiction; the uniform program year prevents the administrative chaos of managing four different grant cycles with different start/end dates; jurisdictions must notify HUD of their consolidated program year choice
  • §§ 91.100–91.115 — Citizen participation requirements: jurisdictions must adopt a Citizen Participation Plan ensuring meaningful public involvement; requirements include (a) at least two public hearings per year on community development and housing needs; (b) 30-day public comment period on the draft Consolidated Plan before submission; (c) advance notice of public hearings published in newspapers and distributed to interested parties; (d) technical assistance to groups representing low- and moderate-income residents to help them participate in the planning process; (e) timely response to complaints within 15 business days of receipt; hearings must be held at times and locations accessible to potential beneficiaries
  • §§ 91.200–91.230 — Contents of the Consolidated Plan (local governments): a complete Plan must include (a) a housing and homeless needs assessment projecting housing needs for the ensuing 5-year period, broken down by income level, household type (owners, renters, families, elderly, persons with special needs), and housing problem type (cost burden, overcrowding, inadequate conditions); (b) a housing market analysis describing the significant characteristics of the jurisdiction's housing market — vacancy rates, condition of public housing, cost of housing, and lead-based paint hazard exposure; (c) a strategic plan establishing priorities for the 5-year period — which housing needs are most pressing, what geographic targeting will occur (Neighborhood Revitalization Strategy Areas), and what anti-poverty strategy the jurisdiction will pursue; (d) a 5-year goals table quantifying the number of households to be assisted broken down by income category and activity type
  • § 91.220 — Annual Action Plan: the jurisdiction must submit an Annual Action Plan to HUD describing the specific activities it will carry out in the upcoming program year to address its 5-year Consolidated Plan goals; the Action Plan includes the amounts allocated to each activity, the proposed beneficiaries, and the geographic areas targeted; HUD cannot obligate formula grant funds until the Action Plan is approved; late submissions delay the grant award
  • §§ 91.500–91.530 — Consolidated Annual Performance and Evaluation Report (CAPER): within 90 days after the end of the program year, the jurisdiction must submit a CAPER to HUD documenting the actual expenditures, activities undertaken, and households served compared to the goals in the Annual Action Plan; the CAPER triggers HUD's monitoring review; jurisdictions that fail to achieve reasonable progress toward their goals may be placed on a HUD monitoring plan

  The Consolidated Plan requirement is the most operationally significant administrative requirement for CDBG/HOME/ESG/HOPWA grantees because it is the predicate for funding. HUD reviews Plans for completeness, consistency with civil rights requirements, and reasonable goals — a Plan that fails HUD review delays grant awards. Under 2020 amendments (85 FR 47909), HUD began requiring an Analysis of Impediments to Fair Housing or an equivalent Assessment of Fair Housing as part of the strategic plan, linking housing planning to civil rights compliance. For advocates and residents, the Citizen Participation requirements create legally enforceable access to the planning process — jurisdictions that fail to hold required hearings or provide comment periods have faced HUD sanctions.

  Recent rulemakings: 60 FR 1896 (1995) — original Consolidated Plan rule replacing four separate planning requirements. 85 FR 47909 (2020) — restored fair housing analysis requirements. 86 FR 30792 (2021) — updated to address COVID-19 flexibility provisions.

• 24 CFR Part 574 — Housing Opportunities for Persons With AIDS (HOPWA) — one of the four CPD formula grant programs tied to the Consolidated Plan, providing HUD grants to states and cities for housing assistance and related supportive services for low-income people living with HIV/AIDS and their families. HOPWA is administered through the same local planning and accountability framework as CDBG, HOME, and ESG, but serves a specialized population defined by medical status rather than general low income. Key provisions:

  • § 574.100–574.130 — Formula allocation to states and qualifying cities: HOPWA formula grants flow to (a) States (one eligible State per the formula, typically the state receiving the largest share) and (b) qualifying cities — Eligible Metropolitan Statistical Areas (EMSAs) that meet the threshold of 500 or more cumulative AIDS cases reported to CDC; the formula allocates funding in proportion to each jurisdiction's share of total U.S. cumulative AIDS cases, weighting toward higher-prevalence metro areas; HUD uses CDC surveillance data updated annually; grantees must have an approved Consolidated Plan that covers HOPWA before receiving formula funds
  • §§ 574.200–574.260 — Competitive grants (10%): HUD sets aside 10% of HOPWA appropriations for competitive grants to states, local governments, and nonprofit organizations for "projects of national significance" — special projects that demonstrate innovative models for housing people with HIV/AIDS; competitive HOPWA is the vehicle for piloting Housing First approaches, integrative healthcare/housing models, and other emerging practices
  • §§ 574.300–574.330 — Eligible activities: HOPWA grantees subgrant funds to "project sponsors" (nonprofits and public agencies providing direct services); eligible activities include: (a) short-term rent, mortgage, and utility payments (STRMU) — emergency assistance up to 21 weeks per year to prevent homelessness or hospitalization; (b) tenant-based rental assistance (TBRA) — ongoing rental subsidies enabling eligible persons to rent private-market units; (c) project-based rental assistance (PBRA) — subsidies tied to specific housing units operated by nonprofit sponsors; (d) supportive services — case management, mental health services, alcohol/drug abuse treatment, nutritional services, intensive care coordination; (e) housing information services — counseling, landlord outreach, fair housing education
  • § 574.340 — Eligible persons: the program serves (a) low-income individuals with AIDS or related diseases; (b) their families (defined to include spouses, domestic partners, children, and anyone living with the eligible person in a long-term relationship); income eligibility is set at 80% of Area Median Income (AMI), but grantees may set lower income targeting to serve the most vulnerable; "AIDS-related diseases" is defined broadly to encompass all HIV-related conditions, not only CDC-defined AIDS diagnoses
  • § 574.604–574.606 — Nondiscrimination: HOPWA recipients may not discriminate on the basis of HIV/AIDS status, disability, or other protected categories; housing assistance must be provided in integrated settings consistent with the Americans with Disabilities Act; project sponsors may not require proof of HIV status as a condition of housing applications where alternative documentation is available

  HOPWA receives approximately $450–500 million annually in Congressional appropriations — a fraction of the HUD CPD portfolio but the primary federal housing resource specifically targeting HIV-positive households. The program serves approximately 60,000 households per year. HOPWA funding is disproportionately concentrated in high-prevalence cities (New York, Los Angeles, Miami, Atlanta) that received large formula allocations based on historical AIDS case data — a methodology that has generated debate as the geographic distribution of HIV has shifted toward the South and rural areas in recent decades, while formula grants continue flowing to older epidemic centers. The 2020 HOPWA formula revisions updated the case data weighting to better reflect current prevalence.

  Recent rulemakings: 80 FR 75938 (2015) — last significant amendment to HOPWA regulations, adding housing quality standards requirements and updating eligible activities definitions.

• 2 CFR Part 1 — Federal financial assistance applicability:

  • 2 CFR 1.1 — Applicability of federal financial assistance regulations to CDBG and other HUD programs (uniform administrative requirements, cost principles, and audit requirements for federal awards)

Pending Legislation

• HR 6363 — Tie CDBG funding to measured local housing growth, rewarding fast-growing cities. Status: Introduced.
• HR 6773 — Require CDBG grantees to post searchable database of undeveloped parcels. Status: Introduced.
• HR 8047 — New CDBG grant program for housing and community development. Status: Introduced.
• HR 6623 — Retarget CDBG to high-poverty areas, authorize $3.4B in FY2026 indexed to inflation. Status: Introduced.
• HR 5105 (Rep. Liccardo, D-CA) — Let CDBG funds pay to build new housing for low/moderate income. Status: Introduced.
• HR 5077 (Rep. Waters, D-CA) — Let CDBG finance new affordable housing construction. Status: Introduced.
• S 2441 (Sen. Kennedy, R-LA) — Tie CDBG grants to housing growth, cut slow-growth recipients by 10%. Status: Introduced.

Recent Developments

• CDBG funding has declined in real terms over the past two decades, despite growing community needs
• CDBG-DR has become an increasingly important disaster recovery tool, with billions in supplemental appropriations after major disasters
• HUD has modernized the Consolidated Plan and reporting processes, including electronic submission
• Debates continue over CDBG formula reform — the current formula has not been significantly updated since the 1970s and may not reflect current needs
• CDBG-CV (COVID-19 supplemental) provided $5 billion in emergency community development funds during the pandemic