Chapter 1: CDBG Program Overview

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CDBG Program Overview

Authorization and Allocation

The Community Development Block Grant (CDBG) program was authorized in 1974 via Title I of the Housing and Community Development Act (HCDA). It is managed by the U.S. Department of Housing and Urban Development (HUD).

“…primary objective of this chapter and of the community development program of each grantee under this chapter is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” (Title 1, HCDA)

Appropriation amounts are determined annually by Congress or by a continuing resolution. The HCDA requires that 70% of CDBG funds be allocated to entitlement communities (i.e., cities with a population of over 50,000 or the principal city of a metropolitan statistical area [MSA]) and 30% be allocated to states. The funds are distributed using one of two formulas, whichever provides the higher grant amount: 

  • Formula A: Population (25%), poverty rate (50%), and overcrowded housing (25%)
  • Formula B: Population or growth lag (20%), poverty rate (30%), and pre-1940’s housing (50%) 

Iowa’s CDBG allocation varies from year to year, based on the allocation from Congress. The state can create its own programs and funding priorities, based on community needs.

National Objectives and Eligible Activities

Every activity funded with CDBG dollars must meet one of three national objectives, with 70% of all funding supporting the low-to-moderate income (LMI) benefit:

  • Low-to-moderate income benefit, where LMI is defined as being 80% or below of the area median income (note that this national objective has four categories: area benefit, limited clientele, housing, and jobs; for more information on this and other national objectives, see chapter two of this guide)
  • Prevention or elimination of slum and blight, on either an “area” or “spot” basis
  • Meet an urgent need

Not only must a CDBG-funded project meet a national objective, but it must also be an eligible activity as well. 24 CFR 570.201 describes the CDBG eligible activities; if an activity is not specifically authorized, it is ineligible for funding. Additionally, there several activities that are explicitly prohibited, such as assistance to buildings for “general conduct of government,” political activities, operations maintenance, etc. For a complete list of the eligible and explicitly prohibited ineligible activities, please see 24 CFR 570.201. 

There are ways to mix and match an eligible activity with a national objective; in fact, some activities can meet more than one national objective. For example, if a public facility serves all residents in an LMI community (at least 51%), the low-mod area benefit (LMA) national objective can be used, or if the public facility is in a slum/blighted area and improvements will eliminate slum and blight, that national objective could be used instead. It should be noted that there are certain CDBG eligible activities that require the use of a specific national objective. For example, housing projects require the use of the low-mod housing (LMH) national objective, and special economic development almost always requires the use of low-mod jobs (LMJ) national objectives. 

IEDA will generally not require communities or grant administrators to determine eligible activities or national objectives. Both of those are typically determined by IEDA through program creation/design.

Plans and Reports

As a state CDBG recipient, IEDA is required to prepare and submit several plans/reports to HUD, all of which are prepared in conjunction with the Iowa Finance Authority (IFA) as these plans include information on all HUD-funded programs (e.g., HOME, ESG, etc.). 

The Consolidated Plan is submitted every five (5) years (the current Plan is for 2020-2024). It is designed to help states and local jurisdictions to assess their affordable housing and community development needs and market conditions, and to make data-driven, place-based investment decisions. The Plan establishes goals for meeting these needs over a five-year period that reflect anticipated resources and past performance. These goals are then carried out through the state’s Annual Action Plan. 

The Annual Action Plan is submitted each year in the spring. It includes a summary of the actions, activities, and the specific federal and non-federal resources that will be used each year to address the needs and goals identified by the Consolidated Plan. Any program and/or policy changes are required to be included in the Annual Action Plan. 

The Consolidated Annual Performance and Evaluation Report (CAPER) is a progress report that is submitted in March of each year on behalf of all HUD programs. It is number-heavy, consisting of expenditures, the number of persons served under each program, etc., and ties back to each of the goals established in the Consolidated Plan. 

The State of Iowa is required to develop and follow a Citizen Participation Plan for all HUD-related planning activities. This plan is designed to encourage citizen participation and input in the Consolidated and Annual Action Planning processes, the most recent of which are always available on the IEDA website. All plans and reports, once prepared, are open for public comment before they are submitted, including any amendments to plans.

Resources

For more historic and contextual CDBG resources, including online training modules, laws, and other best practices, please follow either of these links: 

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Getting Started

You have received your award letter and have this Guide in hand. What do you do next (after you read this Guide carefully, of course)? Here are five steps you should take – if you have not already – to get started.

  1. Determine who will handle project administration. CDBG recipients should plan to contract with a certified CDBG administrator for the day-to-day management of their project. Recipients must follow federal procurement requirements when selecting a grant administrator. Procurement instructions are outlined in Chapter 2. Recipients choosing to contract for administrative services with local Regional Planning Commissions or Councils of Governments do not have to complete the competitive procurement process. More information about the role of a grant administrator and the certification program can be found at the end of this chapter.
  2. Review contract documents from IEDA. Please carefully review contract documents upon receiving those from IEDA. If there are changes that should be made, notify your IEDA project manager immediately. The contract should be signed by the Chief Elected Official (CEO) for the project. Return the documents electronically to Teri Taylor-Wolf at IEDA. Once fully executed, a copy of the contract will be uploaded into Iowagrants.gov.
  3. Enter into a subrecipient agreement if necessary. If you submitted your CDBG application on behalf of another entity (e.g., day care center, rural water association), you must establish a formal relationship with that entity. This entity will serve as a subrecipient. Before receiving any CDBG reimbursements, you must execute a written agreement with the subrecipient and provide IEDA with a copy of the signed agreement. The appendix to this Chapter includes a list of the minimum required provisions for, and a sample of, a subrecipient agreement.
  4. Adopt CDBG Policies. The local government must adopt a Prohibition on the Use of Excessive Force policy, a Residential Anti-displacement and Relocation Assistance Plan (RARA), a Code of Conduct, a Fair Housing policy, and an Equal Opportunity Policy. These policies are required for local governments to receive CDBG funds and should be readopted based on the most current version if older than five (5) years. Copies of the policies must be provided to IEDA before funds will be released. Samples of these policies are included in the appendix to this Chapter.
  5. Complete signature authorization forms, if necessary. The authorized signatory for your project is established when your contract is signed. If you want another person to be able to sign official documents related to the project, or if someone other than the original signatory takes over as CEO, you must complete the Alternate Signature Authorization and/or the Signature Authorization for Change in CEO Form, as applicable. These forms are included in the appendix to this Chapter.
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Next Steps

You are on your way, but there are still some major tasks to complete. Here are six more steps to take:

  1. Begin the environmental review process. The environmental review process required by federal law has some built-in time constraints. You should begin the environmental review as early as possible after signing your contract with IEDA. The process involves using a review checklist to document that the project will not have an adverse impact on the environment and contacting other agencies for comments on the environmental impact of your project. This process is described step-by-step in Chapters 3 and 4 and Appendices 3 and 4.
    1. Remember: CDBG recipients cannot go out to bid, sign construction contracts, acquire property, and/or start construction until you have completed the environmental review and received a Release of Funds from IEDA.
  2. Clear contract conditions. Your contract may have some special conditions that must be cleared before you can incur costs on your project. Examples of possible contract conditions include receipt of building permits or clearance by other state agencies. You should clear any contract conditions and submit notification to IEDA so construction can begin on schedule. If you have any questions about the conditions in your contract, contact your assigned project manager.
  3. Acquisition & relocation. If you are acquiring any property or may be temporarily or permanently relocating any person(s), business or operations as part of the CDBG project, refer to Chapter 2 to learn about– acquisition and relocation requirements.

  4. Procure technical services, architectural and/or engineering services. IEDA guidance instructs applicants to procure for architectural, engineering, grant administration and technical services prior to applying for CDBG funds. However, if there is a need to procure for additional services after an award is made, you must follow procurement requirements as outlined in the Procurement section of this chapter.

    Community facility and stormwater project design teams will consult with Iowa Department of Agriculture and Land Stewardship (IDALS) Urban Conservation Program Team on project stormwater management designs at 30, 60, 90 percent, and final design. The Recipient will secure and upload as a supporting document to the wage rate request in www.iowagrants.gov the Milestones Checklist from IDALS confirming stormwater management designs meet the requirements of the Iowa Green Streets Criteria and the Iowa Stormwater Management Manual .

    The IEDA intends to make available to CDBG community facility and stormwater project recipients a design consultant team with expertise in stormwater, energy efficiency, building design, and construction best practices. This team will be available for a limited number of hours to assist your project’s design professionals in delivering high performing projects designed to meet many of the Iowa Green Streets Criteria. Contact your assigned IEDA project manager to request design assistance. Specific procurement requirements are described in Chapter 2.

  5. Prepare to contract for construction. If your project will involve construction, you must follow applicable labor laws. You must follow competitive bidding procedures to select contractors. Bid documents should include required Section 3 language (refer to Chapter 8 for more information on Section 3) 

    When applicable, the Iowa Green Streets project plan, checklist and criteria must be included in or linked to the bid package provided to contractors. Stormwater projects may be required to follow the specifications in the Iowa Stormwater Management Manual. In most cases, a wage rate determination will be necessary.

    You should request a wage rate determination from IEDA 30 days before advertising for bids. 10 days before the bid opening date, you should call IEDA to determine if the wage rate has been modified or superseded. Before awarding any contract, you must check to verify that the selected contractor is not on a federal or state debarred list. You should inform IEDA of the date construction will begin. Specific procurement and labor requirements are described in Chapter 2 and Appendix 2.

    Do not go out to bid for your project until after you have received a release of funds letter from IEDA and have completed any required Tiered historical review.

  6. Establish your financial management and reporting procedures. There is a specific process for drawing down federal funds. Additionally, there are some important financial management and reporting requirements with which recipients must comply. Review Chapter 5 carefully for instructions on financial management and how to request CDBG funds.
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Down the Road

As your CDBG project moves forward, it pays to think ahead. Here are more activities you will encounter as you move forward with your project:

  1. Project Monitoring. It may be months, or even years away, but it is never too soon to think about project monitoring. Your IEDA project manager will perform a desk top review or onsite monitoring of your project. The purpose of this visit is to assess your performance and compliance with program requirements and to provide you with any technical assistance you may need. The monitoring visit will go more smoothly if you have kept good records from the very beginning, documenting the progress of the project and the actions you have taken to satisfy the various federal requirements. The appendix to this Chapter includes a recordkeeping checklist. The monitoring checklist is available on the IEDA website.
    1. Recipients and grant administrators should review the checklist prior to a monitoring visit to ensure information IEDA staff will need to review is available at the visit.
    2. Remember: Recipients are responsible for monitoring the performance of any third-party contractors under any general administration or subrecipient agreement. The recipient is responsible for ensuring that all activities comply with all Federal and state regulations.
  2. Public hearing on the status of funded activities (SOFA). Section 508 of the Housing and Community Development Act of 1987 requires local governments to comply with the State’s Citizen Participation Plan. You should have already had a public hearing on your CDBG application. You must also have a public hearing on the status of funded activities (SOFA) during the project; This hearing should not be held after project activities are complete. The status of funded activities hearing should be held when the project is at 50% completion.
    1. Once a project is reported at 50% complete, IEDA will not process any draw requests until documentation from the public hearing has been provided. A list of requirements for the public hearing is included in the appendix to this Chapter.
  3. Contract amendments. If you encounter some unforeseen change to your project after contract execution, you must submit a contract amendment request through Iowagrants.gov. A contract amendment is a formal, substantive change to the contract. Changes to the contract may include time extensions, budget updates or adjustments, and/or adding new activities or alteration of existing activities that will change the scope, location, objectives or scale of the approved activities or beneficiaries. Instructions for contract amendments are included in the appendix to this Chapter.
  4. Grantee Performance Report (Form 3-D), if applicable. For Community Facilities and Services and Career Link Employment Transportation projects, you must submit Form 3-D to report project beneficiaries. Career Link Employment Transportation projects should submit this form annually; Community Facilities projects will submit this form at the end of the project. This report is available in Iowagrants.gov. Please note that storm water projects funded under Community Facilities and Services do not require a Form 3-D. Some CDBG-CV projects also require this 3-D form as well.
  5. Green Street Criteria, if applicable. For projects following Iowa Green Streets Criteria, upon completion of your project, submit through Iowagrants.gov completed Iowa Green Streets Criteria Appendices D and E (see Chapter 9 for more information).
  6. Updated Applicant/Recipient Disclosure/Update Report. This report provides a listing of any persons with a financial interest in the project. An initial report should have been included as part of your CDBG application. However, if there are any changes in the information that was provided in the initial report, an updated report must be submitted to IEDA. The report form and instructions are included in the appendix to this Chapter.
  7. Audit and closeout procedures. The appendix to this Chapter includes guidelines on audit and closeout procedures. It is a good idea to understand these requirements early in your project as an audit may be required prior to project completion.

The appendix to this Chapter contains copies of the federal regulations governing the CDBG program. You should familiarize yourself with these rules and regulations and refer to those as necessary.

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Role of a Grant Administrator

Description of Responsibilities

Local governments (i.e., cities and counties) are legally and financially responsible for all CDBG projects. However, IEDA requires all local governments to identify a grant administrator for each funded project. Grant administrators should coordinate the day-to-day activities associated with the CDBG award on behalf of the city/county. Grant administrators assist with the immediate post-award activities, reimbursements, compliance and reporting, project updates, project monitoring, and close out.

Grant administrators should assist the local government with compliance with all state and federal requirements associated with an award.

There are several immediate post-award activities. These include the environmental review process, the release of funds, gathering and uploading various policies and required documents, and setting up record-keeping systems. The grant administrator also assists with the reimbursement process by ensuring that funds are drawn every six months and by collecting and submitting source documentation. This Chapter, Chapter 3, Chapter 4, and Chapter 5 cover these items in greater detail.

Chapter 2 will describe the various compliance and reporting requirements of a CDBG project, such as procurement, labor standards, Section 3, and civil rights and fair housing. In addition to this compliance, the grant administrator will ensure that the LMI documentation is complete and accurate and will review and implement other program-specific compliance (e.g., Downtown Revitalization [DTR], Upper Story Housing, CDBG-CV, etc.).

A grant administrator should know the status of projects and be able to provide updates to IEDA staff. They should respond to general information requests and act as a liaison between the local government and IEDA. The grant administrator should contact IEDA with any issues or questions to ensure that the project moves forward successfully.

Every project will be monitored at least once (see Chapter 2 for more information). In preparation for project monitoring, the grant administrator will create filing systems, upload documents to IowaGrants.gov, and provide follow-up documentation after the monitoring visit as required.

Finally, the grant administrator is involved in the project close out. They will ensure that projects are closed by the contract end date and that all final claims are submitted on time as well. If necessary, they will also assist with submitting contract extension or amendment requests.

Certified Grant Administrator Program

Starting in 2022, IEDA has implemented a new certified grant administrator program. The program will increase training opportunities for administrators, increase administrator capacity, improve performance, and further professionalize the industry. Communities must have a certified grant administrator (CGA) on staff or hire/procure a certified administrator to manage a CDBG award.

To administer a CDBG award, individuals must complete the IEDA training and pass the required test to become a certified CDBG grant administrator. A grant administrator is any staff member that works on any portion of CDBG project compliance. Thus, staff involved in any aspect of administration of a CDBG project must be a CGA.

Individuals seeking to become a CGA will undergo IEDA training and take an exam. Those who do not successfully complete the training and the exam will not be certified; IEDA will maintain a list of CGAs and will share this list on the website. It should be noted that certification is tied to the individual and not the agency.

Both the trainings and the testing will take place online, with the testing to occur after all training sessions are completed. The exam is open book, and a score of 85% or higher is required to pass. One retest will be allowed; if the individual does not pass the retest, certification training must be completed again prior to testing a third time. IEDA may require CGAs to attend additional training throughout the year, for example to learn about new rules or policies. The CGA will also need to be recertified every three (3) years (and be in good standing to do so). 

If an agency hires a new employee between annual CGA training opportunities, IEDA will offer conditional certification (including training materials and an exam) that will be good through the next offered certification training. At that point the staff must 

  • attend the training,
  • be in good standing, and
  • pass another test in order to become fully certified.

What is good standing?

The following is a description of what “good standing” looks like for a CGA:

  • The CGA has completed and submitted the environmental review documents to IEDA within six (6) months of the contract start date and the environmental review documents are complete upon submittal and are correct
  • Forms submitted to IEDA including claims, compliance forms, etc., are correct: forms should not need to be sent back for corrections multiple times for the same errors and omissions
  • The CGA is timely in responding to IEDA staff with information requests and project updates
  • The CGA has submitted draw request at least every six (6) months for both activity and admin expenses in each CDBG project
  • The CGA completes monitoring visits with no findings/issues, or any such issue is minor and can be easily remediated within thirty (30) days of IEDA’s final monitoring report
  • The CGA has submitted all project close-out materials within sixty (60) days of a contract end date or has requested a contract extension prior to the contract end date
  • The CGA attends mandatory CDBG trainings
  • The CGA has not committed any action that would lead IEDA to initiate decertification

CGAs that have accumulated three (3) good standing violations within two (2) years will be placed in probation for up to one (1) year. IEDA will document all reasons for the probationary status. A CGA on probation may continue to administer current CDBG contracts but may not administer new ones during that one-year period. If there are no further documented good standing violations within the probationary period, the CGA may be fully reinstated. 

If additional violations are documented, however, the probationary period ends, and the decertification process will proceed. Decertification begins with a written notice from IEDA. The CGA may request a further opinion from the IEDA Director or the Director’s designee. If a CGA is decertified by IEDA, it is effective for two (2) years and all projects must be transferred to another CGA. Decertified CGAs will then be required to attend certification training and pass the exam to become certified again.

Decertification

Please be aware that IEDA may immediately decertify an administrator after determining that any of the following has occurred:

  • The CGA consistently circumvents federal or state policies and regulations
  • The CGA fails to disclose a conflict of interest that the administrator has with the project
  • The CGA takes inappropriate actions that result in de-obligation or refund of CDBG funds
  • IEDA has received multiple, written, substantiated complaints from a grantee (either employee or elected official) regarding the CGA
  • The CGA has engaged in any conduct that is significantly prejudicial to the administration of the CDBG program
  • The CGA allows other staff that are not CGAs to carry out administrative or compliance duties associated with a CDBG project
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