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HUD To Promote Economic Development In Underserved Communities, Proposes Rule

HUD has published a proposed rule and is asking the public to comment or submit their views concerning the same.

January 11, 2024

Washington- A notice of proposed rulemaking was published by HUD in the Federal Register to update regulations for the Community Development Block Grant (CDBG) and Indian Community Development Block Grant Programs (ICDBG). The main purpose of this proposed rule is to streamline program requirements, invest in underserved communities, promote economic development, and enable larger construction projects such as mixed-use development and infrastructure improvements.

HUD’s Secretary Marcia L. Fudge said, “From coast to coast and nearly everywhere in between, Community Development Block Grant funds build roads and sewers, rehabilitate homes, support nonprofit organizations and small businesses, and help communities prepare for and recover from weather-related disasters. The Biden-Harris Administration has committed to making federal programs easier to use, and this rule will reduce the burden on grantees and ensure this critical funding reaches communities quickly.”

The proposed updates aim to enhance the effectiveness and efficiency of Community Development Block Grant (CDBG) grantees in utilizing their funds. These improvements would simplify the process for States and localities to invest in CDBG or Section 108 Loan Guarantee funding in underserved areas. Section 108 enables communities to leverage up to five times their annual CDBG allocation through low-interest loans for eligible activities, thereby facilitating economic development and job creation. Furthermore, the proposed rule, if implemented, would reinforce aspects related to the Consolidated Plan, public participation requirements, and the timely expenditure of CDBG funds.

HUD is also proposing technical changes to ICDBG program regulations to align CDBG and ICDBG. Another ICDBG rule will also be published by HUD soon, changing the problem regulations after tribal consultation.

HUD’s Principal Deputy Assistant Secretary Marion McFadden said, “For fifty years, CDBG has been a reliable resource for communities across the country. CDBG’s annual formula grant provides flexible funding for States and localities to address their greatest needs.”

The proposed rule, if finalized, would be a significant step to modernize and strengthen programs to allow funds to flow more quickly to economically distressed communities. The main aim of these updates is to improve data collection to measure effectiveness and program outcomes.

HUD has invited all interested parties and the public to submit their views, comments, and recommendations for improving the proposal. The comments can be submitted either electronically or via the methods prescribed in the proposed rule.

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Department of Housing and Urban Development. “HUD Publishes Proposed Rule to Promote Economic Development in Underserved Communities”. Department of Housing and Urban Development, January 11, 2024,
HUD Publishes Proposed Rule to Promote Economic Development in Underserved Communities | / U.S. Department of Housing and Urban Development (HUD)

Last Updated: September 20, 2021