Q: What is the Community Development Block Grant?
A: The primary purpose of the CDBG program is the development of viable communities by providing decent housing, suitable living environments, and expanding economic opportunities, principally for low- and moderate-income people.
Q: Where does the CDBG money come from?
A: The money comes to NH from the US Department of Housing and Urban Development. It’s 100% federal money.
Q: How is CDFA involved in administering the program?
A: CDFA is a state authority, not a state agency. CDBG had been run out the Office of State Planning until it was eliminated in 2004. CDFA has administered the program on behalf of NH ever since.
Q: What types of grants are awarded?
A: In New Hampshire, there are four kinds: Affordable Housing/Public Facilities, Economic Development, Emergency, and Planning Grants. For a further breakdown of these grants, click here [http://www.nhcdfa.org/block-grants/types-of-grants].
Q: How much can a community receive in any given year?
A: Each community can receive up to $500,000 in Housing/Public Facilities grants per calendar year. They many also receive up to $500,000 in Economic Development (these award amounts are not counted against one another). Municipalities can receive between $350,000 and $500,000 a year in Emergency funds and $12,000 for Planning Grants.
Communities can submit multiple projects in a calendar year, but their combined award amounts cannot exceed the annual maximum.
Q: Who is eligible to receive CDBG awards?
A: Grant recipients include any city, town, or county in New Hampshire that is not already a HUD entitlement community (these are Manchester, Nashua, Portsmouth, Dover, and Rochester – which already receive an annual CDBG allocation from HUD).
The awarded municipalities often subgrant the CDBG award to nonprofit or action group that will do the housing or public facilities work. Economic development awards are subgranted to nonprofit entities that loan cash to businesses which pledge to create jobs.
Q: We’re a small community. Do we have as much of a chance as a larger city or town?
A: Absolutely. Awards are based on things like need and impact, not on geography. So long as 51% of beneficiaries are of low-to-moderate income – and the other project thresholds are met – you’re on equal footing.
Q: How can I determine whether there are enough low- and moderate-income beneficiaries to qualify for CDBG?
A: There are ways, such as census track data that show income levels. In some cases, door-to-door income surveys can provide this information. Talk to CDFA about how you can get that data.
Q: How are Housing and Public Facilities applications scored?
A: There are two annual competitive rounds. Staff evaluates each application on set criteria and assigns a score to each. These include: socio-economic variables, project need, area benefit, direct benefit, matching funds, activity priority, preservation of NH centers and neighborhoods, cost per beneficiary, long term benefit, and readiness for implementation. The highest scoring applications are funded first; applications then funded in descending order until all the funds for that round are expended.
Q: How are Economic Development applications scored?
A: ED applications are considered every month, so they do not compete with other applications; however, they must reach a threshold score in order to be funded. Criteria evaluated by staff include public benefits such as: socio-economic factors, other economic factors (such as median family income), impact on employment, employee benefits, and other public benefits (such as reduced demand on social services). Points are also awarded for business benefits including: matching funds and business financial indicators.
Q: Does a municipality/county have to hire a government worker to write grants or administer the project?
A: It depends
. The city or town may have someone on staff who can do the compliance and paperwork. In most cases, the communities hire a third-party administrator (a professional consultant with experience in CDBG) to do this work. The cost for this administrative work is taken out of the grant (not the town/county budget), so there is no cost to local taxpayers.
Q: Are municipality/county taxpayers responsible for paying back the grant should the project fail?
A: No. As the grantee, the town/county is held harmless; however, CDFA expects the municipality to work with them to recover any funds that should go back into the CDBG program.
What could potentially happen is that CDFA and the municipality could receive a “finding” from HUD, red mark against the grantee’s and subgrantee’s future applications. None of us want that.
Q: What thresholds must a town/county meet before it can apply for CDBG?
A: There are a couple of things that have to happen. The selectmen, counsel, or commission must publicly notice in three places ten business days beforehand they will hold a public hearing on the grant proposal. At that hearing, they must disclose details of the project and the amounts requested, and allow public comment. They must adopt or reaffirm their Housing and Community Development plan; this plan identifies community needs for the next three year and objectives to address them. Lastly, they must adopt a Residential Antidisplacement and Relocation Assistance plan. This says that if any businesses or residents are displaced by the planned project, they will work to relocate them.
Q: How are the awards selected, approved and implemented?
Q: Once awarded, how long until the project must be completed?
A: The CDBG project must be completed within 18 months of receiving the award. In some cases with extenuating circumstances, CDFA will request a contract extension from the Executive Council, but that is an action of last resort.
Q: How are funds distributed for project activities?
A: There is no upfront cash award. Projects submit invoices for work done eligible activities and are reimbursed for those expenses.
Q: Do Davis-Bacon wages apply to CDBG projects?
A: Yes and no. Davis-Bacon, a mandate that laborers on federally-funded projects be paid certain baseline wages, is a CDBG requirement. It applies to workers doing what’s considered “hammer and nail” construction work; it doesn’t apply to workers like engineers, office managers, etc. A CDBG representative will visit the work site and survey every laborer on the job to ensure compliance.
If CDFA funds are used exclusively on non-construction activities, such as acquiring property, then Davis-Bacon rates would not apply to construction laborers (unless the funding sources used for construction require Davis-Bacon themselves).
Q: Is implementing a CDBG grant complicated?
A: We hate to admit it, but like every federal grant program, it can be. If you don’t believe us, just take a look at the official CDBG Implementation Guide for NH (we dare you).
First off, CDFA holds workshops for grantees and subgrantees on how to implement, report, and comply with CDBG. Secondly, there are several third-party consultants the municipality can hire to guide them through the red tape.
Q: What kind of reporting must we do?
A: You must report on the progress of your CDBG project twice a year. Data will include things like number of housing units constructed, jobs created to-date, and other benchmarks. This information will be passed along to HUD, which is keeping an eye on the impact of all of our CDBG awards.
Q: What happens if we fall out of compliance with our CDBG grant?
A: CDFA will alert you that corrective action is needed. If none is taken or the problem isn’t resolved, CDFA could encumber your award until you’re back in compliance.
Q: What happens if some of these federal or state CDBG rules change?
A: CDFA will issue alerts in the form of “circulars.” Lists of these circulars can be found here.