The Community Development Block Grant (CDBG) program is the federal
government’s principal community development program. It provides
funding for housing, economic development, neighborhood revitalization, and other community development activities. In fiscal year 2006, Congress appropriated approximately $4.2 billion for the program. Administered by the Department of Housing and Urban Development (HUD), the CDBG program provides funding to metropolitan cities and urban counties, known as entitlement communities, and to states for distribution to nonentitlement communities. The program provides annual grants on a formula basis that takes into account population, poverty, housing overcrowding, the age of the housing, and any change in an area’s growth in comparison with that of other areas. The activities undertaken with program funds must (1)principally benefit low- and moderate-income persons, (2) aid in the prevention or elimination of slums or blight, or (3) meet urgent community development needs.