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February 1, 2008

Cuts Announced in CDBG and ESG Funding, HOME to Get Slight Increase

A reduction of more than $233,000 (3.8%) in Community Development Block Grant (CDBG) funding for FY 2009 was recently announced by HUD and will impact some affordable housing and community development initiatives funded through the program.  In the past three years, cuts have resulted in more than a 13% reduction from the FY 2006 level. The Fairfax County Department of Housing and Community Development (HCD) will be analyzing the impacts that these new reductions will have on programs and services in FY 2009. 

Sixty-six percent of the FY 2009 CDBG allocation is proposed to be used for affordable housing preservation, fair housing, planning, homeownership and funding of other eligible projects that support Consolidated Plan goals.  The remaining funds ($2,002,846) will be allocated through the Consolidated Community Funding Pool (CCFP) to be used for various non-profit community-based programs. In Fairfax County, CDBG funds provide critical funding to approximately eleven non-profits in addition to county programs in accordance with the Consolidated Plan Annual Action Plan.  It is expected the funding for the funding pool will stay relatively constant with the exception of public services which has a percentage limit imposed by HUD.

While CDBG was reduced, the county’s annual HOME grant was boosted almost $9,000 (0.4%).  FY 2009 HOME funds are planned to be used to provide rental assistance to qualified low income households, as well as, deferred mortgages to first-time homebuyers through the Homebuyer Equity Loan Program (HELP) and the American Dream Downpayment Initiative (ADDI). In addition to these programs, rental assistance will be provided through the HOME  Elderly Tenant Based Rental Assistance (TBRA) and for homeless families and individuals through the Partnership for Permanent Housing (PPH) TBRA programs.

The Emergency Services Grant (ESG) funds were reduced slightly. ESG funds are used to support a portion of the operating costs of five out of the six existing County shelters.

Fairfax County entitlement grant amounts for HOME, CDBG, and ESG for FY 2009   (definitions of programs follow at bottom of article):

  • CDBG: $5,929,346; reduction of $233,126 (3.8%) from FY 2008
  • HOME: $2,448,559; 0.4% increase (+$8,984)
  • ESG: $265,518; 0.6% reduction  (-$1,547)

Program definitions:

CDBG: The Community Development Block Grant is a federal annual entitlement grant program which funds activities to carry out one of three national objectives: benefit to low/moderate income families; aid in the prevention or elimination of slums or blight; or address urgent needs where conditions pose a serious and immediate threat to the health and welfare of the community.

HOME: The Home Investments Partnership is an entitlement program which provides flexible housing grants to be used for: the acquisition, rehabilitation, and new construction of affordable housing, tenant bas  ed assistance, home buyer assistance, planning, and support services. Fifteen percent (15%) of the annual funding must be set aside for housing development activities of Community Housing Development Organizations (CHDOs), as defined by HUD.

ESG: The Emergency Shelter Grant is an entitlement program that provides grants to improve the quality of existing emergency shelters and to increase the number of shelters developed for the homeless to be used for: renovation, conversion of buildings, rehabilitation, essential social services and operating costs.