If you’re struggling to find affordable housing, you’re not alone. Millions of Americans face the same challenge every day. While programs like Section 8 get most of the attention, there’s another powerful tool that might be helping in your community right now: Community Development Block Grants, or CDBG.
Think of CDBG as a Swiss Army knife for affordable housing. It’s been quietly working behind the scenes since 1974, helping communities build, fix, and preserve affordable homes. Unlike other programs that can be rigid and hard to navigate, CDBG gives local governments the flexibility to address their specific housing needs.
What Exactly is CDBG?
The Community Development Block Grant program is run by the U.S. Department of Housing and Urban Development (HUD). Every year, HUD sends federal money directly to cities and counties based on how much they need it. They look at factors like poverty rates, how old the housing is, and how crowded neighborhoods are.
The program has three main goals:
- Support decent, affordable housing
- Create better living environments
- Expand economic opportunities for low- and moderate-income people
Here’s the key rule: at least 70% of CDBG funds must benefit people with low or moderate incomes. This isn’t just a suggestion: it’s the law.
How CDBG Helps with Affordable Housing
CDBG works differently than other housing programs. Instead of just giving out rental vouchers or building new apartments from scratch, it focuses on smart, flexible solutions:
Fixing Up Existing Homes
Most CDBG housing money goes toward rehabilitating homes that already exist. This includes:
- Fixing roofs, plumbing, and electrical systems
- Making homes accessible for seniors and people with disabilities
- Removing dangerous lead paint
- Adding insulation and energy-efficient windows to lower utility bills
This approach makes sense because it’s usually cheaper to fix up a home than to build a new one. Plus, it helps preserve affordable housing that might otherwise be lost.
Converting Buildings into Homes
CDBG can also help turn empty buildings into affordable housing. Old hotels, office buildings, or warehouses can become apartment buildings or condos. This is especially valuable in expensive cities where land is hard to find.
Limited New Construction
While CDBG doesn’t usually fund new construction, there are exceptions. Community development organizations that meet certain requirements can use CDBG funds to build new affordable housing, but it must be part of a larger neighborhood improvement plan.
Real Examples of CDBG in Action
Let’s look at how real communities have used CDBG to tackle their housing challenges:
San Francisco used CDBG funds to build affordable rental housing in one of the most expensive housing markets in the country. Every unit they create helps working families stay in the city.
Detroit leveraged CDBG for both housing rehabilitation and neighborhood revitalization. By fixing up homes and improving infrastructure at the same time, they’re helping entire neighborhoods come back to life.
Cleveland recently used CDBG funds for an innovative project that combined a new library branch with 51 affordable senior housing units. This shows how creative communities can be with CDBG funding.
Hotel Isabel in San Francisco is a perfect example of adaptive reuse. CDBG support helped convert this old hotel into 49 affordable units, preserving both history and affordability.
How Does Your Community Get CDBG Funds?
CDBG money flows through two main channels:
Entitlement Grants
Cities with more than 50,000 people and counties with more than 200,000 people get money directly from HUD. The amount depends on local conditions like poverty rates and housing costs.
State Grants
Smaller cities and rural areas get CDBG funds through their state government’s “Small Cities” program. States distribute this money based on local applications and needs.
Every community that gets CDBG money must create an Annual Action Plan by May of each year. This plan outlines how they’ll use the funds, and residents get a chance to provide input. Communities also create a five-year Consolidated Plan and submit annual reports showing what they accomplished.
Recent Local Success Stories
Laredo, Texas allocated over $5 million in federal funds, including CDBG, for housing rehabilitation, rental assistance, and homelessness services. This shows how CDBG can work alongside other programs to maximize impact.
Midland, Texas is reviewing $1.22 million in CDBG funding for housing, infrastructure, and services as part of their 2025-2030 plan. This long-term approach helps ensure steady progress.
These examples show that CDBG isn’t just for big cities, smaller communities can make a real difference too.
How CDBG Fits with Other Housing Programs
CDBG works best when it’s combined with other housing programs. If you’re exploring your options, you might also want to check out state-specific housing programs since Section 8 waitlists can be incredibly long.
Income limits are crucial for qualifying for CDBG-funded housing. The new 2025 housing income limits determine who can benefit from these programs. Generally, you need to earn less than 80% of your area’s median income to qualify for most CDBG-funded housing.
For seniors, Social Security payments often provide the primary income used to determine eligibility. Since Social Security benefits are typically modest, many seniors qualify for CDBG-funded housing assistance.
If you’re trying to navigate all these different programs, the interactive affordable housing guide can help you understand your options and find programs that might work for your situation.
Best Practices: Making CDBG Work
Communities that use CDBG effectively follow several key strategies:
Assess Local Needs: They start by listening to residents and understanding what types of housing help are needed most. Some areas need more rehab work, while others need conversions or emergency repairs.
Coordinate with Other Programs: Smart communities use CDBG alongside HOME funds, Low-Income Housing Tax Credits, Section 8, and Emergency Solutions Grants. This coordination helps fill financing gaps and serve more people.
Partner with Local Organizations: Working with community development corporations, nonprofits, and neighborhood groups helps stretch CDBG dollars further and ensures projects meet real community needs.
Track and Report Results: CDBG requires detailed reporting on outcomes, including how many housing units were created or improved and how many households were served.
Focus on Preservation: Especially in areas where housing costs are rising fast, using CDBG to preserve existing affordable housing can be more cost-effective than building new units.
Challenges and Limitations
Like any program, CDBG has its limitations:
Flexibility Can Be a Double-Edged Sword: Because CDBG can be used for so many different things, communities sometimes spread their funding too thin instead of focusing on housing.
New Construction Restrictions: Unlike some other programs, CDBG has strict rules about building new housing. This limits how much new affordable housing can be created.
Funding Hasn’t Kept Up with Inflation: The amount of CDBG funding hasn’t grown much over the years, even though housing costs have risen dramatically.
What This Means for You
If you’re looking for affordable housing, CDBG might be helping in your community even if you don’t realize it. The program works mostly behind the scenes, funding projects that preserve and improve affordable housing options.
To find out if CDBG is active in your area, contact your city or county government and ask about their Annual Action Plan or Consolidated Plan. These documents are public and will show you what housing projects are planned or underway.
CDBG represents one piece of the affordable housing puzzle. While it may not solve the housing crisis on its own, it’s a valuable tool that helps communities address their specific needs with flexibility and local control.
The key to CDBG’s success is community involvement. When residents participate in the planning process and local governments coordinate with partners, CDBG can make a real difference in creating and preserving affordable housing for the people who need it most.
Whether it’s fixing up an old home, converting an empty building, or supporting a innovative new project, CDBG continues to be a quiet but powerful force for affordable housing in communities across America.