CDBG projects must align with one of three national objectives:
- Principally benefit low and moderate income person
- Eliminate slums and blight
- Address imminent health and safety problems
There are a number of regulations that apply. Principal among these are the following:
- Environmental review.
- Davis-Bacon wage rates.
- Civil rights legislation.
- Competitive procurement.
TNECD administers the "Small Cities" CDBG program. All communities in Tennessee are eligible except those in entitlement communities which are communities that receive CDBG funds directly from HUD. Entitlement areas include Bristol, Chattanooga, Clarksville, Cleveland, Davidson County and Nashville, Franklin, Hendersonville, Jackson, Johnson City, Kingsport, Knox County and Knoxville, Morristown, Murfreesboro, Oak Ridge, Shelby County and Memphis
CDBG funds are only awarded to city and county governments.
HUD allows for considerable flexibility in the use of CDBG money as long as applicants stay within the parameters of the legislation and regulations.
Local officials and the "public" must be consulted each year regarding goals, objectives and priorities. The program is designed around this input.
The economic development program operates continuously. The community development program operates on a once-a-year application cycle, with applications submitted in February.
The level of funding is determined annually through congressional appropriations. Each state receives a protected allocation of CDBG funds, based on a federal formula and does not compete with other states for funding allocations. Tennessee typically receives about $25M per year. 80-85% of the funds are used for water and sewer projects, approximately 10% is used for community livability project, and about 5% for housing rehabilitation. Economic development projects are funded as eligible applications are received.