CDBG Housing Programs

The Community Development Block Grant (CDBG) Program is a federally funded grant program designed to help communities with their greatest community development needs. All projects must be designed to principally benefit low and moderate-income families. The program was established by the Federal Housing and Community Development Act of 1974 (42 USC 5301) and is administered nationally by the U.S. Department of Housing and Urban Development (HUD).

The CDBG Program is divided into two major categories:

  1. Entitlement CDBG Program - assists communities with 50,000 or larger populations. In Montana, only Billings, Great Falls, and Missoula are Entitlement communities. They receive CDBG funds on a formula basis and are directly under HUD administration.
  2. State CDBG Program - assists communities with populations under 50,000. Allocations are established for each state on the basis of a statutory formula. The State CDBG Program is administered by the Montana Department of Commerce.

In 1981, Congress amended the Federal Housing and Community Development Act to make the Non entitlement or "Small Cities" portion of the CDBG Program available as an optional State-administered program. The Legislature authorized MDOC to administer the program beginning in 1982. Since 1982, Montana has received over $129 million in CDBG funds. Overall, the public and private funds invested in local CDBG projects have matched the federal funds awarded at almost a two to one ratio, making possible millions of dollars of construction activity and creating jobs for Montanans across the state.

A summary of each of the Housing projects awarded funds under the 2000 CDBG Program is included in Appendix A. The MDOC CDBG website includes a summary of all the applications submitted to and funded by both the CDBG program and the Treasure State Endowment Program. Additional information regarding the projects awarded CDBG funds from 1982 to 2000 is available from MDOC upon request.

Housing Projects

The CDBG Housing category is intended to assist communities in a wide range of activities to help them provide decent, safe and sanitary housing for their residents at an affordable price and to combat blighting influences in the community. A variety of activities can be combined in one single project as part of implementation of a comprehensive housing strategy linked to the particular needs and circumstances of an individual community.

CDBG funds can be used to rehabilitate substandard housing, to support construction of new permanent, long-term housing, or for a weatherization program to improve the energy efficiency of homes or rental housing. CDBG funds can also be used to finance or subsidize the construction of new permanent, residential units where a local nonprofit organization sponsors the project. CDBG housing projects can also include site improvements or provision of public facilities to publicly-owned land or land owned by a nonprofit organization to be used or sold for new housing. Housing activities can include the demolition of vacant, deteriorated housing units with the intent of making the site available for new construction, acquiring sites for use or resale for new housing, and converting existing nonresidential structures for residential use. Related community revitalization activities can include cleaning up junk and debris or improving or constructing public facilities such as sidewalks, streets, or neighborhood parks.

Policy Outline

It is the goal of the Montana CDBG Program to provide financial resources and technical assistance to local governments as they seek to respond to their unique housing needs. The CDBG Housing category offers communities a wide range of activities to help them provide decent, safe and sanitary housing for their low and moderate income residents at an affordable price and to combat blighting influences in the community. A variety of activities can be combined in one single project as part of an overall housing strategy linked to the particular needs and circumstances of an individual community, as long as they are consistent with the community’s analysis of housing needs and will achieve meaningful impact on them.

Two recent major developments have occurred which affect the ability of Montana local governments to respond to their housing needs: the economic impacts on homeowners and renters expected in the near future as a result of utility “deregulation” and associated increased energy costs, and new regulations adopted by HUD on September 15, 2000, regulating the treatment of lead-based paint in HUD assisted housing units.

In regards to the first issue, rising energy costs, Governor Judy Martz has taken a leadership position in advocating that all Montanans, including state government, undertake conservation measures. She has also encouraged state agencies to seek to minimize the impact on low and moderate income households as a result of both existing and projected energy prices. Because of the seriousness of the energy cost issue, the Montana CDBG Program is encouraging communities to consider housing activities which would focus principally on funding energy conservation improvements to housing owned or occupied by low and moderate income homeowners or renters.

In regards to the second issue, that of lead-based paint, HUD has adopted significant, new regulations regarding treatment of lead-based paint found in older homes that have major cost implications for the administration of the program. By focusing on energy conservation improvements, communities can avoid some of the costs involved in complying with lead-based paint requirements, and realize almost immediate cost savings in terms of home energy costs.

This chapter contains a full outline of policies concerning CDBG assisted housing projects. See D through R for application instructions, requirements, procedures, and format for Housing grant applications.

ELIGIBLE HOUSING ACTIVITIES

Eligible CDBG Housing activities include:

  • acquiring, clearing, or rehabilitating sites or structures for use or for resale for new housing;
  • converting existing nonresidential structures for residential use;
  • demolition of vacant, deteriorated housing units with the intent of making the site available for new housing construction;
  • financing or subsidizing the construction of new permanent, residential units (including assisted living facilities) when a local nonprofit organization sponsors the project;
  • increasing the energy efficiency of housing units through weatherization, such as installation of storm windows and doors, insulation, or replacement, or upgrade of heating equipment;
  • rehabilitating substandard housing;
  • providing site improvements or public facilities to publicly-owned land or land owned by a nonprofit organization to be used or sold for new housing; and
  • home buyer assistance for low and moderate income households.

Note: Projects designed to provide housing facilities to be owned or operated by local governments or private, nonprofit corporations must be submitted under the fall Housing grant competition. This would include projects designed to provide temporary or short-term housing facilities to be owned or operated by local governments or private, non-profit corporations such as transitional housing, homeless shelters, or emergency shelters.

There are several basic types of activities that can be undertaken using CDBG funds under the Housing category:

  1. Community Revitalization
  2. Energy Conservation
  3. Floodplain Mitigation
  4. Home Buyer Assistance
  5. Housing Rehabilitation
  6. New Construction.