1 1 (September 28, 2020)

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              Researh Sevice

Community Development Block Grants and

the CARES Act

Updated September 28, 2020

The U.S. Department of Housing and Urban Development's (HUD's) Community Development Block
Grant program (CDBG) can be employed by states and local units of government to support economic
and community development efforts in response to the COVID- 19 pandemic. The Coronavirus Aid,
Relief, and Economic Security (CARES) Act (P.L. 116-136) includes $5 billion for the Community
Development Fund, enabling additional HUD support for CDBG grantees. This Insight provides an
overview of the conventional CDBG program, considers how CDBG funds may be used to support
community and economic development efforts in response to the COVID- 19 pandemic, and discusses
provisions in the CARES Act pertaining to CDBG.

Community Development Block Grant Program Overview
CDBG is a flexible program administered by HUD that provides formula-based block grant funding to
states and eligible localities. CDBG authorities are regularly used to respond to unmet long-term recovery
needs in disaster-affected areas. In some instances, Congress has enacted supplemental appropriations
under CDBG authorities to provide additional resources for unmet needs of affected communities-
typically, but not exclusively, in areas with federal emergency or disaster declarations under the Stafford
Act-which have come to be known as CDBG Disaster Recovery, or CDBG-DR.

CDBG Formula Allocation
CDBG funds generally are allocated through two separate formula processes. Approximately 70% of the
program funds are granted to general units of local government under the CDBG Entitlement Program.
Eligible grantees in the entitlement program are (1) principal cities of Metropolitan Statistical Areas; (2)
other metropolitan cities with populations of at least 50,000; and (3) qualified urban counties with
populations of at least 200,000 (not including entitlement city populations). About 30% of CDBG
program funds are granted to states based on a separate formula allocation, for disbursement to
communities that do not qualify for entitlement funds. States have broad discretion in disbursing funds to
nonentitlement communities.

                                                             Congressional Research Service

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