Federal and State Funding Sources for Community DevelopmentPurpose of Tool:
The US Department of Housing and Urban Development (HUD) is the primary agency that administers federal funds for community development, through Community Development Block Grants (CDBG) and HOME Investment Partnerships (HOME) program. CDBG grants and HOME grants are similar in the type of projects they fund, but CDBG funds benefit low- to moderate-income individuals and families, while HOME funds benefit very low- to ¬low-income individuals and families (according to HUD CDBG and HOME Income Limits).
In Texas, these grants are distributed in two ways. Urban counties (and cities therein) and certain large cities are typically considered entitlement communities. Entitlement communities receive CDBG funding directly from HUD and implement projects via a community development plan. Rural counties and the cities therein, are considered non-entitlement communities and compete for CDBG funds through a Regional Review Committee administered by the State of Texas Office of Rural Community Affairs (ORCA) and the applicable Council of Government.
The purpose of CDBG funding is to “develop viable communities by providing decent housing and suitable living environments, and expanding economic opportunity principally for persons of very low- to moderate-income.” CDBG funds can be used for a wide range of community improvements. For entitlement communities, typical project types include street paving, park improvements, demolition and clearance, rehabilitation of private homes owned by low-income families, and subsidized child care and adult day care. Project priorities for non-entitlement communities are established by Governor-appointed Regional Review Committees within each Council of Government. Historically, project priorities include wastewater, sewer, drinking water, road and drainage projects. While states administer the federal CDBG funds, state funding is not readily available for community development purposes.
Benefits of Using Tool:
Communities and regions are able to benefit from these programs in several ways:
Steps Involved to Use Tool:
Most entitlement cities and counties in Texas administer the CDBG and HOME funds through the following process:
Non-entitlement communities apply for projects through a competitive Regional Review Committee process which scores and ranks projects based on State approved scoring criteria. Each committee submits the final list of recommended projects to ORCA for final review and additional scoring. ORCA and the applicant enter into contracts to fund and complete individual projects.
Special Requirements to Use Tool:
Projects chosen to potentially receive grant must meet at least one of the following three (3) CDBG National Objectives:
Specials Resources Needed to Use Tool:
To use these funding sources for community development, it is necessary for the entitlement community to be eligible with HUD to receive these funds. In order to be eligible, entitlement grantees must submit to HUD their Consolidated Plans and applications for funding, and the Plan must indicate the jurisdiction’s goals for the funding, if obtained.
The process for non-entitlement communities is presented in Special Requirements to Use Tool, above.
Communities / Agencies that Have Used Tool:
Many communities across the United States have used these programs. The following examples demonstrate successful uses of the program:
Community and Human Development Department Manager
2 Civic Center Plaza
8th Floor City Hall
El Paso, TX, 79901
Community Development Director
118 East Tyler
Harlingen, TX, 78550
Metrics to Use to Monitor Tool Effectiveness:
There are not currently any specific case studies regarding the effectiveness of federal and state funding sources for community development.
List of Resources to Obtain Additional Info:
For more information, please see: