	Introduction

This report is intended as an introduction to the laws and rules governing the Community Development Block Grant (CDBG) and related programs. The CDBG program, administered by the Department of Housing and Urban Development (HUD), was first authorized by Title I of the Housing and Community Development Act (HCDA) of 1974, P.L. 93-383 . The program is one of the largest and longest-standing federal block grants in existence, annually allocating billions of dollars in federal assistance to state and local governments in support of community and economic development efforts. During the program's 40-year existence, Congress has appropriated approximately $145 billion in CDBG-formula grants to help state and local governments undertake housing, economic development, neighborhood revitalization, and other community development activities. The third category is block grants. States serve as pass-through agents and are prohibited from directly undertaking community development activities. Section 107 Special Project Grants

Currently eligible uses of Section 107 funds include grants:
to any state or local government that received an insufficient CDBG formula allocation as a result of a miscalculation of its share of formula grants awarded to eligible entities; to minority serving institutions, including historically black colleges and universities, and institutions of higher education serving Hispanic populations and Indian tribes; to Indian tribes, states, local governments, and area-wide planning organizations for the provision of technical assistance, knowledge transfer, and capacity building activities; to states or local government working jointly with institutions of higher education to carry out eligible CDBG activities; and to units of local government in nonentitlement areas to be used to assist these communities in undertaking community adjustment and economic diversification activities in response to proposed or actual base realignment activities (BRAC), cancellation of Department of Defense (DOD) contracts, or the public announcement of a planned reduction in DOD spending that would directly affect the economic base of the communities. Eligible activities must:
principally benefit low- and moderate-income persons defined as families and individuals whose household incomes do not exceed 80% of a jurisdiction's median income; aid in the prevention or elimination of slums or blight; or meet an urgent need by addressing conditions that pose a serious and immediate threat to the health and safety of residents. Income Targeting Requirement

In order to receive funds each entitlement community or state must certify that it will target at least 70% of its funds to activities that principally benefit low- and moderate-income persons over a one-, two-, or three-year period established by the entitlement community or state. These hearing are intended to identify housing and community development needs within the community, consider proposals for funding, and review program performance. If a jurisdiction's program is found to be in noncompliance with program requirements, HUD may take any of the following actions: 
request that the state or entitlement community submit additional information and outline remedial actions that will bring the program into compliance; issue a letter of warning; in the case of noncompliance by a nonentitlement recipient of state CDBG funds, it may advise the state to suspend a questionable activity or to suspend the local government; institute conditions on the use of funds; terminate payments to the recipient; reduce payment to the recipient; limit payments to activities and projects not affected by activities found in noncompliance with statute and regulations governing the program; or seek civil action. Related Programs

In addition to authorizing funding of CDBG formula grants, the CDBG authorizing statute also includes language authorizing other programs and activities intended to work in coordination with CDBG formula grant in support of the program's national objectives. All eligible activities must meet the one of the three national objectives of the regular CDBG program. Recipients receiving Section 108 funds are required to file an annual performance report with HUD detailing progress made in meeting the objectives of its community development plan, including Section 108 activities. In addition, 42 U.S.C. Currently, grants are awarded to three national intermediaries to be used to help fund efforts to improve the technical and administrative capacities of neighborhood based community development corporations (CDCs) and community housing development organizations (CHDOs). Sustainable Communities Regional Planning Grants (SCRPG) .
The Community Development Block Grant (CDBG) program, administered by the Department of Housing and Urban Development (HUD), was first authorized by Title I of the Housing and Community Development Act of 1974, P.L. 93-383 (42 U.S.C. 5301, et seq.). The program is one of the largest and longest-standing federal block grants in existence, annually allocating billions of dollars in federal assistance to state and local governments in support of local neighborhood revitalization, housing rehabilitation, and community and economic development efforts. During the program's 40-year existence, Congress has allocated approximately $145 billion in CDBG formula grants to help state and local governments undertake these activities. The block grant nature of the program provides recipient jurisdictions fairly substantial administrative discretion.
Funds are awarded by formula to so-called "entitlement communities" and states, who act as pass-through agents awarding funds to small communities unable to meet the minimum population threshold for entitlement status. During FY2013, approximately 1,237 entitlement communities and states qualified for a direct allocation of funds. Grant funds may be used to undertake any of 27 categories of eligible activities, including the acquisition, demolition, and sale of real property; the construction of public facilities; the undertaking of public services; historic preservation; energy conservation; and the provision of assistance to for-profit and not-for-profit entities in support of private-sector job creation. Although communities and states are given great discretion and flexibility in the selection of activities to be funded, the program's governing statute requires that all activities meet one of three national objectives. Eligible activities must:
principally benefit low or moderate income persons; aid in preventing or eliminating slums or blight; or address an imminent threat to the health and safety of residents.
In addition, the act quantifies the "principally low and moderate income persons" (LMI) benefits national objective by requiring each entitlement community and state to expend in the aggregate, over a one-, two-, or three-year period, at least 70% of its CDBG allocation on activities that principally benefit low and moderate income persons.
Before undertaking program activities, a recipient of funds must develop a consolidated plan assessing its current housing and non-housing community development conditions and it must propose a plan to address the community's housing and community development needs. Grant recipients are also required to submit to HUD an annual performance report detailing progress that has been made in achieving proposed outcomes and identifying the status of activities identified in its annual plan.
In addition to the CDBG formula portion of the program, HUD administers a number of smaller grant and loan guarantee programs intended to support or augment the activities and objectives of the larger CDBG formula grant program. These programs support regional planning, the reclamation of brownfields, rural housing, and the provision of technical assistance to community development corporations and community housing development organizations. Critics have contended that many of these programs duplicate the activities of the CDBG formula grant program.
This report is intended as a primer to acquaint the reader with a basic understanding of CDBG and related programs. In-depth policy discussions and funding history may be found in other CRS products, including CRS Report R43208, Community Development Block Grants: Funding Issues in the 113th Congress, and CRS Report R43394, Community Development Block Grants: Recent Funding History. This report will be updated as events warrant.