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What are Community Development Grants?

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  • Written By: Josie Myers
  • Edited By: Andrew Jones
  • Last Modified Date: 08 November 2016
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Community development grants are funds given to cities and towns for the purpose of revitalization. The federal or state government hands the money down to state and local governments who then decide where it is needed the most. Towns with low to moderate income citizens are usually given favor, as the grants are intended to stimulate economic development and improve facilities in those areas that do not have the resources to do so themselves. The goal is to provide a better quality of life for the citizens of a given region.

One of the largest forms of community development grants is the US Department of Housing and Urban Development's (HUD) Community Development Block Grant (CDBG) program. The program began in 1974, and has continued to develop and improve the lives of low income citizens. HUD uses the grants to provide funds for specific state projects, disaster relief, low interest loans for citizens, and for the development of sustainable and renewable communities.

Some states expand on HUD's grants by offering their own grants. The towns and programs that receive the aid depend largely on the need and the overall benefit that the grant will give to the people of the area. Often, community development goes hand-in-hand with economic development. For example, a state like Alaska will give a significant amount of community development grants to programs that foster the fishing industry, since it is a major resources within that state.

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States use the funds provided by both HUD and the state revenue for a variety of program types. Some funds may be used to build affordable housing for low income families or the homeless, while others can help those families weatherize their already existing homes. Other grants provide for improvements to park lands and community properties. Infrastructure projects like water and sewer lines, and roads can also be improved using community development grants.

The grants are generally given after an application process. The applicants must file a significant amount of paperwork outlining exactly where the funds will go, and the benefit that they will give to the surrounding community. Budgets must also be set long before the work begins. Institutions are most likely to fund projects that incorporate a sense of community and cooperation. Anyone seeking community development grants should seek to garner support from surrounding communities, not just from the one it will directly benefit.

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