The Community Development Block Grant (CDBG) Program was established by the Housing and Community Development Act of 1974, as amended. The Act consolidated previously existing categorical grant programs into a single block grant which is awarded to eligible localities throughout the states and also the insular areas, based on a formula allocation.

CDBG is under the jurisdiction of the Department of Housing and Urban Development (HUD). The VIHFA administers the program locally. CDBG has as its primary objective the development of viable urban communities through the provision of decent housing, suitable living environment, and expanded economic opportunities. 

CDBG funds are sub-awarded to non-profit and governmental entities to carry out various programs and projects that primarily benefit low-to-moderate income persons. Each funded project must meet at least one National Objective as follows: (I) prevention or elimination of slums and blight; (II) address an urgent need; and (III) primary benefit to persons of low and moderate income. Benefit to low/mod income persons is where either (1) at least 51% of the area residents are low-income as established by the census map or, (2) the activity benefits a population which is generally presumed by HUD to be low-income, or (3) housing is created that will be restricted to occupancy by households meeting the federal low-income definition, or (4) jobs are created/retained and at least 51% of the jobs will be held by or available to low/mod income residents.

The Territory typically receives an allocation of approximately $1.9M annually. VIHFA is allowed to use up to 20% of the annual allocation program administration expenses. No more than 15% of the grant allocation can be dedicated to public service projects such as after-school programs; the remaining funds must be used for “brick and mortar” projects.