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CDBG FUNDABILITY For Local Officials. CDBG Program Fundability Overview. Fundability refers to key thresholds that determine the ability of projects and programs to receive CDBG funding

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Cdbg fundability for local officials


Cdbg program fundability overview
CDBG Program FundabilityOverview

Fundability refers to key thresholds that determine the ability of projects and programs to receive CDBG funding

The state review process for all local government CDBG funding applications must include a fundability determination prior to award

All activities must be eligible for funding and meet a national objective

Statutory and regulatory requirements
Statutory and Regulatory Requirements

  • Projects must meet a national objective

    • Section 104(b)(3) Housing and Community Development Act (HCDA) of 1974 as amended; and

    • 24 CFR 570.483 of the State CDBG regulations

  • Activities must be eligible

    • Section 105(a) HCDA

    • State CDBG regulations 24 CFR 570.482

Statutory and regulatory requirements continued
Statutory and Regulatory Requirements - continued

  • State must meet a two-step process:

    • Each proposed activity must meet a national objective and be eligible at time of application development and approval (award)

    • Following implementation, state must also determine that activities met national objective and are the same eligible activities that were originally approved for award

Cdbg national objectives
CDBG National Objectives

  • Unit of Local Government is contractually responsible for activities funded with CDBG to meet the designated national objective and complete activities as approved and awarded by the State

  • Know what your project activities are and what national objective must be met

Cdbg national objectives1
CDBG National Objectives

  • National Objectives (24 CFR 570.483)

    • Benefiting low and moderate income (LMI) persons

    • Aid in the prevention or elimination of slums and blight (SB)

    • Meets community development needs having a particular urgency (UN) that the unit of local government is not able to fund on its own or obtain other sources of funding


National Objective



Urgent Need

Area Benefit

Area Basis

Spot Basis

Limited Clientele



National objective low and moderate income benefit
National ObjectiveLow and Moderate Income Benefit

  • Area Benefit (LMA)

    • 24 CFR 570.483(b)(1) …persons

  • Limited Clientele (LMC)

    • 24 CFR 570.483(b)(2) …persons

  • Housing (LMH)

    • 24 CFR 570.483(b)(3) …households

  • Job Creation/Retention (LMJ)

    • 24 CFR 570.483(b)(4) …persons

National objective prevention or elimination of slums or blight
National ObjectivePrevention or Elimination of Slums or Blight

  • Activities must meet one of two determinations:

    • Area Basis - clearly eliminating objectively determinable signs of slums or blight in a defined area. [24 CFR 570.483(c)(1)]

    • Spot Basis - strictly limited to eliminating specific instances of blight outside such an area. [24 CFR 570.483(c)(2)]

    • “Mix and Match” provisions

National objective urgent needs un
National ObjectiveUrgent Needs (UN)

  • Criteria for meeting urgent needs objective:

    • Need must pose a serious and immediate threat to community health and welfare

    • Need must be of recent origin or recently urgent (within 18 months)

    • Community must be unable to finance activity on its own

    • Other funding sources must not be available to carry out activity

Cdbg national objectives summary
CDBG National ObjectivesSummary

  • National Objectives (24 CFR 570.483)

    • eligible activities must meet one of these three objectives:

      • Benefit low and moderate income (LMI) persons.

      • Aid in the prevention or elimination of slums and blight (SB).

      • Address urgent community development needs (UN).

National Objective



Urgent Need

Area Benefit

Area Basis

Spot Basis

Limited Clientele




Cdbg eligible activities
CDBG Eligible Activities

  • All project activities must be eligible for funding according to Housing and Community Development Act (HCDA) Section 105 (a)

  • General Rule - any activity that is not authorized by the HCDA is ineligible to be assisted with CDBG funds

Cdbg eligible activities continued
CDBG Eligible Activities – continued

  • Basic categories of eligibility in order of appearance in Section 105(a) of the HCDA:

    • Acquisition of real property

    • Public facilities and improvement of privately owned utilities

    • Code enforcement

    • Clearance, rehab, reconstruction and construction of buildings

    • Architectural barrier removal

Cdbg eligible activities continued1
CDBG Eligible Activities – continued

  • Loss of rental income

  • Disposition of real property

  • Public services

  • Payment of the non-federal share

  • Relocation

  • Planning and capacity building

  • Program administration costs

  • Activities carried out through nonprofits

  • Assistance to neighborhood-based development organizations

Cdbg eligible activities continued2
CDBG Eligible Activities – continued

  • Energy efficiency/conservation

  • Economic development assistance to for-profit businesses

  • Technical assistance

  • Housing services

  • Assistance to Institutions of Higher Education

  • Microenterprise assistance

  • In-Rem Housing

  • Homeownership Assistance

  • Tornado safe shelters

  • Lead-based paint hazard evaluation and reduction

Program administration costs
Program Administration Costs

  • Funds may be used to pay reasonable program administration costs and charges related to the planning and execution of the CDBG or HOME Program

  • Costs may include:

    • Overall program management

    • Coordination

    • Monitoring

    • Reporting

    • Evaluation

Program administration costs continued
Program Administration Costs - continued

  • Eligible Costs continued:

    • Staff and related costs (State/UGLG/Sub)

    • Citizen participation costs

    • Fair housing activities

    • Project implementation costs (can be charged to specific activity, e.g. housing rehabilitation)

    • Other project specific administration costs in accordance with OMB Circular A-87 not prohibited under the CDBG regulations

Ineligible activities
Ineligible Activities

  • Construction or rehabilitation of buildings for the general conduct of government except:

    • Removal of materials and architectural barriers that restrict mobility and accessibility of elderly or severely disabled adults

    • Work on buildings used to deliver services to the public such as fire stations

    • Can pro-rate costs for buildings associated with both service delivery and administrative functions

Ineligible activities continued
Ineligible Activities – continued

  • Operation and Maintenance

    • Mowing grass, filling pot holes, repairing cracks etc.

    • Payment of staff salaries (not related to CDBG program)

    • New housing construction (with certain exceptions)

    • Activities with insufficient “Public Benefit” (some economic development activities)

    • Business Relocation Activities (anti-pirating)

    • Other activities listed ineligible under OMB CircularA-87 Cost-principles

References and resources
References and Resources

  • Resources….

    • HUD CPD

    • HCDA Housing and Community Development Act

    • 24 CFR 570

References and resources continued
References and Resources - continued

HUD Guide to National Objectives and Eligible Activities for State CDBG Program

HUD CPD Monitoring Handbook


OMB Circular A-87

Handouts attachments

  • CDBG Slums and Blight National Objective Checklist

    • Exercise #1 Fundability and National Objectives

    • Exercise #2 CDBG Activity Eligibility