HUD Community Grants and Loans
The U.S. Department of Housing and Urban Development (HUD) operates three programs that could support water and sewer systems for disasters and mitigation:
- Community Development Block Grants (CDBG)
- CDBG – Disaster Recovery (CDBG-DR)
- Section 108 Loan Guarantee Program
Community Development Block Grants
Description: HUD Community Development Block Grants (CDBGs) can be used to buy, construct, or fix public facilities such as water and sewer systems. Grantees may fund activities that meet community development needs. Utilities have used these block grants to develop new water sources, improve treatment and replace distribution system pipes. Importantly, the CDBG can also match FEMA grants. Communities must spend at least 70 percent of these funds for activities that benefit low- and moderate-income persons. CDBG can be provided either directly to entitlement communities or to states to distribute to non-entitlement communities.
CDBG - Entitlement Communities
Entitlement communities can receive grants directly from HUD. They include three groups:
- Metropolitan cities with populations of at least 50,000 people
- Principal cities of Metropolitan Statistical Areas (MSAs)
- Urban counties with populations of at least 200,000 people (excluding the population of entitled cities)
For further information Community Development Block Grant—Entitlement Communities.
CDBG - State Administered to Non-Entitlement communities
HUD allows each state to manage CDBG funds for non-entitlement areas. Non-entitlement areas:
- Are cities with populations of less than 50,000 people
- Do not include cities that are designated as principal cities of Metropolitan Statistical Areas
- Include some counties with populations of less than 200,000 people
Non-entitlement communities must apply for CDBG funds through their state (except for Hawaiian communities which are permitted to apply directly to HUD). HUD distributes funds to each state on the basis of a statutory formula that takes into account population, poverty, incidence of overcrowded housing, and age of housing. Note that states administer the program and determine which local projects receive funding. For further information, see Community Development Block Grant—State Administered.
Community Development Block Grants – Disaster Recovery (CDBG-DR)
When the President declares a major disaster, Congress may appropriate additional funding for the CDBG Program as Disaster Recovery grants (CDBG-DR) if there are significant unmet needs for long-term recovery. CDBG-DR funds the most impacted and distressed areas for:
- Disaster Relief
- Long Term-Recovery
- Restoration of Infrastructure including water and wastewater utilities
- Economic Revitalization
Before cities, counties and states can begin utilizing CDBG-DR funds, several steps must be completed, including creation of a disaster recovery web page, approval of an Action Plan, completion of applicable environmental reviews, and execution of a grant agreement with HUD. For further information, contact your local municipal or county officials or your local HUD field office or see CDBG-DR.
Section 108 Loan Guarantees
The Section 108 Loan Guarantee Program (Section 108) provides CDBG recipients with the ability to leverage their annual grant allocation to access low-cost, flexible financing for economic development, housing, public facilities, infrastructure projects, and other physical development projects, including improvements to increase their resilience against natural disasters. For further information, see Section 108.