Community Development Block Grants/Entitlement Grants
Published on AidPage by IDILOGIC
on Jun 24, 2005
Purpose of this program:
To develop viable urban communities, by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income.
Possible uses and use restrictions...
Recipients may undertake a wide range of activities directed toward neighborhood revitalization, economic development, and provision of improved community facilities and services. Entitlement communities develop their own programs and funding priorities as long as programs/activities conform to the statutory standards and program regulations. Some of the specific activities that can be carried out with Community Development Block Grant (CDBG) funds include acquisition of real property; relocation; clearance and demolition; rehabilitation of residential and nonresidential structures; provision of public facilities and improvements, such as water and sewer facilities (which require reviews by the State single point of contact or a Regional Planning Agency in accordance with Executive Order 12372), streets, and neighborhood centers. In addition, CDBG funds may be used to pay for public services within certain limits. Recipients may contract with other local agencies or nonprofit organizations to carry out part or all of their programs. Community-based development organizations may carry out neighborhood revitalization, community economic development or energy conservation projects to further achieve the national objectives of the CDBG program. Recipients may provide assistance to microenterprises or other for-profit entities when the recipient determines that the provision of such assistance is appropriate to carry out an economic development project. All eligible activities must either benefit low- and moderate-income persons, aid in the prevention or elimination of slums or blight, or meet other community development needs having a particular urgency that the grantee is unable to finance on its own.
Who is eligible to apply...
Cities in Metropolitan Areas designated by OMB as a central city of the Metropolitan Area; other cities over 50,000 in Metropolitan Areas; and qualified urban counties of at least 200,000 (excluding the population in entitlement cities located within the boundaries of such counties) are eligible to receive CDBG entitlement grants determined by a statutory formula.
Costs will be determined in accordance with OMB Circular No. A-87 for State and local governments.
Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.
About this section:
This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy.
For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree,
3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible.
Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they
Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications
are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs,
the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.
How to apply...
Submit a Consolidated Plan, an annual action plan, SF Form 424, 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 include the local community development objectives and show the proposed use of the funds. If the grantee makes a complete submission within the established deadlines, the Department will make a grant award unless a determination is made by HUD that the grantee's performance is unsatisfactory. HUD will approve the submission generally within 45 days of receipt of the annual action plan and required certifications unless a determination has been made that the grantee has failed to carry out its CDBG program in a timely manner or has failed to conform to the requirements of the statute or other applicable laws. Under such circumstances, HUD may take appropriate actions, including reductions in the amount of the final grant.
Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.
Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check.
Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office,
or by an authorized county office. The assistance may pass through the initial applicant for further distribution by
intermediate level applicants to groups or individuals in the private sector.
Deadlines and process...
For formula grants, action plans associated with the Consolidated Plan must be submitted based on the grantee's program year, but no earlier than November 15 or no later than August 16 of the fiscal year for which the funds are allocated.
When available, this section indicates the deadlines for applications to the funding agency which will
be stated in terms of the date(s) or between what dates the application should be received.
When not available, applicants should contact the funding agency for deadline information.
Range of Approval/Disapproval Time
Generally within 45 days.
A grantee is required to prepare a consolidated plan in accordance with the requirements of Part 91; have and follow a detailed citizen participation plan; provide information to citizens on the amount of CDBG funds available and the range of community development and housing activities that may be undertaken; hold public hearings; publish a proposed action plan which includes a description of activities in sufficient detail, including location, to afford affected citizens an opportunity to submit views and comments prior to the preparation of a final action plan; prepare and submit a final action plan to HUD. This program is covered under E.O. 12372, "Intergovernmental Review of Federal Programs." Recipients should consult the office or the official designated as the single point of contact in its respective State for more information on the process the State requires to be followed when funds are used for the planning or the construction (reconstruction or rehabilitation) of water or sewer facilities.
This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units
prior to the submission of a formal application to the federal funding agency.
Administrative appeals process followed if entitlement grant funds are withheld or reduced, or repayment proposed for non- compliance or non-performance.
In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission
of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or
applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).
Every 3 to 5 years, localities submit a Consolidated Plan. Each year localities submit an annual action plan and certifications.
In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.
Who can benefit...
The principal beneficiaries of CDBG funds are low- and moderate-income persons (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). The grantee must certify that at least 70 percent of the grant funds received during a 1, 2, or 3-year period, that it designates, are expended for activities that will principally benefit low- and moderate-income persons.
About this section:
This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.
What types of assistance...
Allocations of money to States or their subdivisions in accordance with distribution formulas prescribed by law or administrative regulation, for activities of a continuing nature not confined to a specific project.
How much financial aid...
Range and Average of Financial Assistance
Determined by formula.
This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.
FY 03 $3,037,677,000; FY 04 est $3,031,592,000; and FY 05 est $3,026,721,000. (NOTE: Amounts reported reflect allocation of new budget authority rather than obligation amounts.)
The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.
Note: This 11-digit budget account identification code represents the account which funds a particular program.
This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.
Examples of funded projects...
About this section
This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.
There are approximately 1,100 units of local government potentially eligible to receive entitlement grants during fiscal year 2004.
Criteria for selecting proposals...
Length and Time Phasing of Assistance
Assistance is for an annual program of activities, but activities generally may be continued beyond one year until completed.
Formula and Matching Requirements
Entitlements are based on a dual formula under Section 106 of the Act using statistical factors. Each metropolitan city and urban county is entitled to receive 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 overcrowded housing, weighted 0.25, 0.50, and 0.25, respectively. The factors involved in the second formula are population growth lag, poverty, and age of housing, weighted 0.20, 0.30, and 0.50, respectively. The statistical factors used for fund allocation in 2004 are (1) 2002 population estimates from the Bureau of Census; (2) number of persons with incomes below the poverty level from the source 2000 Census; (3) number of housing units with 1.01 or more persons per room from the source 2000 Census; (4) age of housing; number of year-round housing units built in 1939 or earlier from the source 2000 Census; (5) growth lag; the lag in population growth as computed from population in 1960 to current population from the source 1960 Census and P25, Census Report. Statistical factors used for eligibility are (1) metropolitan city: principal city of a Metropolitan Area (MA) or city within MA with 50,000 population from the source Census and OMB; (2) urban county: generally, counties in MA having a net population of 200,000 or more, excluding entitlement cities located therein, from the source Census and OMB. Questions concerning the formula should be addressed to the Systems Development and Evaluation Division, Community Planning and Development, 451 7th Street SW., Washington, DC 20410. Telephone: (202) 708-0790.
A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.
Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.
In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.
Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.
Post assistance requirements...
An annual performance report is required on the use of funds to meet program requirements including the grantee's objectives and the national objectives of the program.
This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.
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 Federal awards in a year shall generally have a single audit conducted for that year. (The auditee may elect to have a program-specific audit conducted under certain limited circumstances.)
This section discusses audits required by the Federal agency.
The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133.
These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year,
as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period,
rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).
The applicant must maintain records with regard to eligibility, national objectives, financial management, citizen participation, relocation, other resources, acquisition, housing assistance to units and households, equal opportunity, environmental impact, labor standards and other requirements set forth in regulations. Records shall be retained for four years after submission of the report in which the activity is reported as completed, except as otherwise prescribed in the published regulations.
This section indicates the record retention requirements and the type of records the Federal agency may require.
Not included are the normally imposed requirements of the General Accounting Office.
For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C.
For other programs, record retention is governed by the funding agency's requirements.
Housing and Community Development Act of 1974, Title I, as amended, Public Law 93-383.
This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).
Regulations, Guidelines, And Literature
Administrative Regulations for Community Development Block Grants, 24 CFR 570.