HUD awards annual grants to entitlement community grantees to carry out a wide range of community development activities directed toward revitalizing neighborhoods, economic development, and providing improved community facilities and services.
Entitlement communities develop their own programs and funding priorities. However, grantees must give maximum feasible priority to activities which benefit low- and moderate-income persons.
A grantee may also carry out activities which aid in the prevention or elimination of slums or blight. Additionally, grantees may fund activities when the grantee certifies that the activities 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. CDBG funds may not be used for activities which do not meet these broad national objectives.
CDBG funds may be used for activities which include, but are not limited to:
- acquisition of real property;
- relocation and demolition;
- rehabilitation of residential and non-residential structure;
- construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes; public services, within certain limits; activities relating to energy conservation and renewable energy resources;
- provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities.
Generally, the following types of activities are ineligible:
- acquisition, construction, or reconstruction of buildings for the general conduct of government;
- political activities;
- certain income payments;
- construction of new housing by units of general local government.
Requirements - Consolidated Annual Action Plan
To receive its annual CDBG entitlement grant, the City must develop and submit to HUD its Consolidated Plan. This is our comprehensive planning document and application for funding under the following Community Planning and Development formula grant programs: CDBG, HOME Investment Partnerships.
The Consolidated Annual Action Plan identifies the City’s goals for these programs as well as for housing programs. The goals will serve as the criteria against which HUD will evaluate a jurisdiction's Plan and its performance under the Plan.
Also, the Consolidated Plan must include several required certifications, including that not less than 70% of the CDBG funds received over a three year period will be used for activities that benefit low- and moderate-income persons, and that the grantee will affirmatively further fair housing.
HUD will approve a Consolidated Plan submission unless the Plan (or a portion of it) is inconsistent with the purposes of the National Affordable Housing Act or is substantially incomplete.
Following approval, the Department will make a full grant award unless the Secretary has made a determination that the grantee:
- has failed to carry out its CDBG-assisted activities in a timely manner;
- has failed to carry out those activities and its certifications in accordance with the requirements and the primary objectives of Title I of the Housing and Community Development Act of 1974, as amended, and with other applicable laws; or
- lacks a continuing capacity to carry out its CDBG-assisted activities in a timely manner.
The City must develop and follow a detailed plan which provides for, and encourages, citizen participation and which emphasizes participation by persons of low- or moderate-income, particularly residents of predominantly low- and moderate-income neighborhoods, slum or blighted areas, and areas in which the grantee proposes to use CDBG funds.
The plan must:
- provide citizens with reasonable and timely access to local meetings, information, and records related to the grantee's proposed and actual use of funds;
- provide for public hearings to obtain citizen views and to respond to proposals and questions at all stages of the community development program
Other Federal Requirements
In addition to HUD requirements there are other regulations applicable to the use of federal funds. Although not all apply in all cases, it is important to be mindful of them.
Environmental Regulations – HUD regulations in 24 CFR Part 58 provide grantees a means to ensure compliance with the National Environmental Policy Act (NEPA) and other relevant environmental regulations that may pertain to an activity funded with federal dollars.
Some activities are exempt from HUD’s environmental review process (administration, planning and public services).
Some activities are categorically excluded from a complete environmental assessment, because by their nature they generally do not have adverse effects on the general environment (residential rehabilitation is an example). For these, a review of regulations other than NEPA is still required, and a notice to the public of the intent to used CDBG funds is published in the local newspaper.
An environmental assessment is documented in the Environmental Review Record (ERR) and is available for inspection at the Community Development Department. Given the nature and scope of most activities, there is generally a Finding of No Significant Impact (FONSI).
Prior to use of CDBG funds, there is a “combined” public notice of the FONSI and notice of intent to request the release of funds (RROF) for specific activities published in the newspaper.
Historic Resources – There is a review of the effect CDBG and HOME activities would have on the City’s historic resources, pursuant to Sec. 106 of the National Historic Preservation Act. This review is undertaken as part of the ERR noted above. The Community Development Director consults with the West Virginia Division of History and Culture Historic Preservation Office prior to seeking authorization to use HUD funds.
Relocation and Displacement – The provisions of the Uniform Relocation Act (URA) apply when property is acquired or rehabilitated. A notice of rights sent to residents or businesses under the URA is a requirement of the City and all sub-recipients.
Labor – When construction is funded by CDBG, certain federal labor standards may apply, specifically Davis-Bacon wages (most non-residential and residential over seven units), Contract Work Hours, the Safety Standard Act, Copeland Act, minimum wage standards, etc. The City requires the payment of wages at the higher of Davis-Bacon or West Virginia Prevailing Wages, on applicable projects.
Anti-discrimination – All activities must be undertaken in a non-discriminatory manner, and offered and administered in full compliance with the Fair Housing Act, which prohibits discrimination in housing because of race, color, national origin, religion, sex, familial status, or handicap. Other federal anti-discrimination requirements may also apply, such as Civil Rights Act of 1964, Age Discrimination Act of 1975, Sec. 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act.
Section 3 – The Housing and Urban Development Act of 1968 call for economic opportunities to be given to residents and businesses in the area served to the greatest extent feasible. Local contractors and vendors, especially those in low- and moderate-income areas, are encouraged to contact the Community Development Department about the opportunities for contracts in the CDBG Program.
Record Keeping, etc. – Organizations who receive CDBG funding as sub-recipients must have sufficient capacity to manage funds and keep adequate records pursuant to HUD and Office of Management and Budget Requirements.
The above is intended as an overview and not a as substitute for applicable HUD or other federal regulations. For more information go to www.hud.gov.