BASICALLY CDBG

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BASICALLY CDBG
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CDBG PROGRAM

• Title I of the Housing Community Development
  Act of 1974, as amended 42 U.S.C. 5301 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

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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

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

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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 570.208

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LOW/MOD BENEFITHOUSING

• 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

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LOW/MOD BENEFITHOUSING

• Rents charged -- affordable rents
• Grantee must adopt and make public its standards
  for determining affordable rents
  
• Reg cite 570.208

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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 570.201

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ELIGIBLE ACTIVITIES

• Wide variety possible
• Real property activities
• Economic development
• Public services
• CBDO activities
• Planning and administration
• Others
• Reg cites 570.201 - 570.206

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RENTAL HOUSING ELIGIBLE ACTIVITIES

• May use CDBG to acquire or rehab rental housing
  under 570.202
  
• Assistance may be loans, grants, loan guarantees,
  interest subsidies
  
• Properties may be
• Publicly or privately owned
• Residential or mixed use

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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.

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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.

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COMMUNITY BASED DEVELOPMENT ORGANIZATIONS (CBDOs)

• Reg cite 570.204
• 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

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CBDO REQUIREMENTS

• Organization must
• Be organized under state/local law for specific
  community development activities
  
• Operate in specific geographic area within
  grantees 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

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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

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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

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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

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Information on website www.hud.gov/offices/cpd/
www.hud.gov/offices/cpd/communitydevelopment/progr
ams/index.cfm