CDBG and HOME Programs

CDBG

The Community Development Block Grant (CDBG) Program was established by the Federal Housing and Community Development Act of 1974 (Act). Administered nationally by the U.S. Department of Housing and Urban Development (HUD), the Act combined eight categorical programs into a single block grant program. Through this program, funds are available to help the City of Urbana meet their greatest economic and community development needs, with an emphasis upon helping persons of extremely low- to low-income.

In order to ensure that the program meets the intent of the Federal Housing and Community Development act of 1974, as amended and re-authorized by the National Affordable Housing Act of 1990, Congress has required that entitlement programs meet at least one of the following three national objectives:

• Benefit low- and moderate-income persons
• Aid in the prevention or elimination of slums and blight
• Meet other community development needs that pose a serious and immediate threat to the health and welfare of the community

Within the statutory requirements of the Act, the City of Urbana has the flexibility to design its own program objectives and procedures for program administration and to develop criteria for selection of grant subrecipients. The City has decided to focus its activities to those that principally benefit extremely low- and low-income persons. The City’s CDBG program is intended to supplement the efforts of organizations in initiating and/or engaging in a community development purpose.

Beyond the broad national objective of benefiting low- and moderate-income persons, the City has established the following specific objectives for its CDBG program:

• Improve public infrastructure and elimination of conditions which are detrimental to health, safety and public welfare
• Conserve of the City’s housing stock in order to provide a decent home and a suitable living environment for persons of extremely low- and low-income
• Strengthen community economic development by creating jobs, stimulating private investment and expanding the tax base
• Support public services required to make the City of Urbana a suitable living environment for its extremely low- to low-income residents

HOME

The HOME Investment Partnerships (HOME) Program is a federal entitlement grant program authorized by Title II of the National Affordable Housing Act of 1990, as amended. The program provides annual grants on a formula basis to entitled cities, counties, approved consortia, and states. Local governments receiving HOME funds are called “Participating Jurisdictions” or "PJs". The amount of HOME funds annually available to participating jurisdictions is determined by Congress through passage of the annual federal budget.

HUD is also responsible for management and oversight of the HOME Program. Each PJ is responsible for deciding how HOME funds will be used in its jurisdiction and for daily administration of HOME funds.

The HOME Program is intended to increase affordable housing opportunities, particularly for low-income persons. Specific purposes of the HOME Program are:

• Expand the supply of decent and affordable housing, particularly rental housing, for low- and very low-income persons.
• Strengthen the abilities of state and local governments to design and implement strategies for achieving adequate supplies of decent, affordable housing.
• Provide both financial and technical assistance to HOME recipients, including the development of model programs for affordable low-income housing.
• Expand and strengthen partnerships among all levels of government and the private sector, including for-profit and non-profit organizations, in the production and operation of affordable housing.

The Cranston-Gonzalez National Affordable Housing Act of 1990 (herein called “the Act”), as amended, makes provisions whereby units of local government may enter into cooperation agreements and form a Consortium to undertake or assist in undertaking affordable housing pursuant to the HOME Investment Partnership Program.

In 1994, Champaign, Urbana, and Champaign County pursued designation of a HOME Consortium, for purposes of receiving HOME funds directly from HUD. In early 1995 HUD officially certified the Urbana HOME Consortium, at which time the City of Champaign, the City of Urbana, and Champaign County entered into an intergovernmental agreement, establishing the City of Urbana as the Lead Entity. The Consortium includes the following jurisdictions:

• Unincorporated Champaign County (represented by the Champaign County Regional Planning Commission)
• City of Champaign
• City of Urbana

To provide local guidance as to the specific administration of the HOME program, Consortium operations are guided by the adopted Policies and Procedures . The Policies and Procedures outline the process by which the City of Champaign, the City of Urbana, and Champaign County can request applications for funding HOME eligible projects. Such projects are evaluated based on their consistency with the goals and strategies outlined in the current Consolidated Plan. (The 2005-2009 Urbana HOME Consortium and City of Urbana Consolidated Plan is available as a PDF document.)

For the purposes of establishing the budget for each Fiscal Year, applications for HOME funding are accepted between December and January of the following year. Applications received were reviewed as described in this excerpt from the application instructions:

Ranking Criteria

All applications will be ranked in terms of how well the proposed project addresses an affordable housing need within the Urbana HOME Consortium, and the degree to which the proposed project furthers that particular strategy/goal as identified in the Urbana HOME Consortium Consolidated Plan For Program Years 2005-2009.

The attached table lists the possible points that may be awarded in each of five categories, as well as some specific criteria that will be considered. Each of these categories can be acceptably addressed by completing the application thoroughly and conscientiously.

Project Description - Applicants should be sure that the application is fully completed.

Project Readiness - Funding will be preferentially awarded to projects that are ready to proceed within thirty (30) days of July 1, of the funding year.

Financial Feasibility - Application budgets should be based on current local cost estimates and should reflect reasonable expectations for the nature of the project.

Developer Capacity - All first-time applicants must demonstrate that they have the capacity to carry out the proposed project.

Project Beneficiaries - Beneficiaries of HOME funded activities must have an annual household income at or below 80% MFI. Preference will be given to applicants that will serve household types that have been identified as underserved on our community.

The amount of funds to be allocated to each of the program categories will be determined after applications have been submitted and reviewed by the Community Development Commission.

The City of Urbana established the Community Development Commission to oversee the application process and recommend proposed activities to the Urbana City Council for approval. The Grants Management Division provides staff support to the Community Development Commission. The City awards funds to subgrantees on a competitive basis. Detailed ranking criteria are employed in reviewing applications.

The City of Urbana Community Development Commission establishes policies and procedures, reviews all subgrantee applications and recommends projects for funding to the City Council, which makes the final determination concerning the use of grant funds. The Mayor of the City of Urbana is the officer held responsible to the Federal Government for the operation and maintenance of the program in compliance with all related Federal statutes and complementing rules and regulations.

Priorities

In concurrence with and in the support of the Urbana HOME Consortium and the City of Urbana Consolidated Plan For Program Years 2005-2009, the following priorities have been set for CDBG/HOME funding decisions:

A. Infrastructure and Public Facilities

• Street Improvements (including repaving, installation of curbs & gutters, etc.)
• Any Other Eligible Public Facilities Activity

B. Housing

• Housing Rehabilitation, Homeowner
• Housing Rehabilitation, Rental
• New Construction of Affordable Housing
• First-Time Homebuyers Assistance

C. Targeted Activities

• Special consideration for applications dealing with targeted areas. Targeted areas would be locally-defined, limited geographical areas in which a number of community development activities are proposed to be carried out in order to meet a common objective of comprehensive improvement in the area.

*NOTE: Applications that do not address one of the above priorities will not be considered for funding.

Rating Systems - Infrastructure and Public Facilities Projects

All applications shall be ranked in terms of how well the proposed project addresses a community development need in the City of Urbana and the degree to which the proposed project furthers that particular strategy/goal as identified in the Urbana HOME Consortium and the City of Urbana Consolidated Plan For Program Years 2005-2009.