CDBG Disaster Recovery Assistance

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Summary:
HUD provides flexible grants to help cities, counties, and States recover from Presidentially declared disasters, especially in low-income areas, subject to availability of supplemental appropriations.

Purpose:
When disasters occur, Congress may appropriate additional funding for the CDBG and HOME programs as Disaster Recovery grants to rebuild the affected areas and bring crucial seed money to start the recovery process. Since it can fund a broader range of recovery activities than most other programs, CDBG Disaster Recovery assistance helps communities and neighborhoods that otherwise might not recover due to limited resources. Disaster Recovery grants supplement disaster programs of the Federal Emergency Management Agency, the Small Business Administration, and the U.S. Army Corps of Engineers. HOME Disaster recovery grants can provide an important resource for providing affordable housing to disaster victims.

Type of Assistance:
HUD generally awards noncompetitive Disaster Recovery grants by a formula that considers disaster recovery needs not met by other Federal disaster assistance programs.

Eligible Grantees:
CDBG Disaster Recovery funds go to States and local governments in places that have been designated by the President of the United States as disaster areas. Some supplemental appropriations may restrict funding solely to States. These communities must have significant unmet recovery needs and the capacity to carry out a disaster recovery program (usually these are governments that already receive HOME or Community Development Block Grant allocations).

Eligible Customers:
CDBG Disaster Recovery grants primarily benefit low-income residents in and around communities that have experienced a natural disaster. Grantees must use at least half of Disaster Recovery funds for activities that principally benefit low-and moderate-income persons. These can be either activities in which the all or the majority of people who benefit have low or moderate incomes or activities that benefit an area or service group in which at least 51 percent of the populous are of low- and moderate-income.

Eligible Activities:
Grantees may use CDBG Disaster Recovery funds for recovery efforts involving housing, economic development, infrastructure and prevention of further damage to affected areas, if such use does not duplicate funding available from the Federal Emergency Management Agency, the Small Business Administration, and the US Army Corps of Engineers.

Examples of these activities include:

1. buying damaged properties in a flood plain and relocating residents to safer areas;
2. relocation payments for people and businesses displaced by the disaster;
3. debris removal not covered by FEMA;
4. rehabilitation of homes and buildings damaged by the disaster;
5. buying, constructing, or rehabilitating public facilities such as streets, neighborhood centers, and water, sewer and drainage systems;
6. code enforcement;
7. homeownership activities such as downpayment assistance, interest rate subsidies and loan guarantees for disaster victims;
8. public services (generally limited to no more than 15 percent of the grant);
9. helping businesses retain or create jobs in disaster impacted areas; and
10. planning and administration costs (limited to no more than 20 percent of the grant).

Application:
HUD notifies eligible governments that must then develop and submit an Action Plan for Disaster Recovery before receiving CDBG Disaster Recovery grants. The Action Plan must describe the needs, strategies, and projected uses of the Disaster Recovery funds.

Funding Status:
Congress appropriated $50 million for CDBG Disaster Recovery Funding for FY 1996, $500 million for FY 1997, and $130 million for FY 1998, $20 million for 1999, $700 million for 2001¹, and $2.0 billion for 2002¹.

Technical Guidance:
CDBG Disaster Recovery Assistance is authorized under Title I of the Housing and Community Development Act of 1974, as amended. Program rules are published in the Federal Register pursuant to specific appropriation acts. The Office of Community Planning and Development (CPD) administers the program. Contact: Jan C. Opper, Senior Program Officer, 451 7th Street, SW, Washington, DC 20410, (202) 708-3587 ext. 4538. Hearing impaired users may call the Federal Information Relay Service at 1-800-877-8339.

¹ Funding is available specifically for disaster recovery related to the September 11, 2001 terrorist attacks on New York City.