[Code of Federal Regulations]

[Title 24, Volume 3]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR570.204]



[Page 46-47]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 

        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents

 

                      Subpart C_Eligible Activities

 

Sec.  570.204  Special activities by Community-Based Development 

Organizations (CBDOs).



    (a) Eligible activities. The recipient may provide CDBG funds as 

grants or loans to any CBDO qualified under this section to carry out a 

neighborhood revitalization, community economic development, or energy 

conservation project. The funded project activities may include those 

listed as eligible under this subpart, and, except as described in 

paragraph (b) of this section, activities not otherwise listed as 

eligible under this subpart. For purposes of qualifying as a project 

under paragraphs (a)(1), (a)(2), and (a)(3) of this section, the funded 

activity or activities may be considered either alone or in concert with 

other project activities either being carried out or for which funding 

has been committed. For purposes of this section:

    (1) Neighborhood revitalization project includes activities of 

sufficient size and scope to have an impact on the decline of a 

geographic location within the jurisdiction of a unit of general local 

government (but not the entire jurisdiction) designated in comprehensive 

plans, ordinances, or other local documents as a neighborhood, village, 

or similar geographical designation; or the entire jurisdiction of a 

unit of general local government which is under 25,000 population;

    (2) Community economic development project includes activities that 

increase economic opportunity, principally for persons of low- and 

moderate-income, or that stimulate or retain businesses or permanent 

jobs, including projects that include one or more such activities that 

are clearly needed to address a lack of affordable housing accessible to 

existing or planned jobs and those activities specified at 24 CFR 

91.1(a)(1)(iii);

    (3) Energy conservation project includes activities that address 

energy conservation, principally for the benefit of the residents of the 

recipient's jurisdiction; and

    (4) To carry out a project means that the CBDO undertakes the funded 

activities directly or through contract with an entity other than the 

grantee, or through the provision of financial assistance for activities 

in which it retains a direct and controlling involvement and 

responsibilities.

    (b) Ineligible activities. Notwithstanding that CBDOs may carry out 

activities that are not otherwise eligible under this subpart, this 

section does not authorize:

    (1) Carrying out an activity described as ineligible in Sec.  

570.207(a);

    (2) Carrying out public services that do not meet the requirements 

of Sec.  570.201(e), except that:

    (i) Services carried out under this section that are specifically 

designed to increase economic opportunities through job training and 

placement and other employment support services, including, but not 

limited to, peer support programs, counseling, child care, 

transportation, and other similar services; and

    (ii) Services of any type carried out under this section pursuant to 

a strategy approved by HUD under the provisions of 24 CFR 91.215(e) 

shall not be subject to the limitations in Sec.  570.201(e)(1) or (2), 

as applicable;

    (3) Providing assistance to activities that would otherwise be 

eligible under Sec.  570.203 that do not meet the requirements of Sec.  

570.209; or



[[Page 47]]



    (4) Carrying out an activity that would otherwise be eligible under 

Sec.  570.205 or Sec.  570.206, but that would result in the recipient's 

exceeding the spending limitation in Sec.  570.200(g).

    (c) Eligible CBDOs. (1) A CBDO qualifying under this section is an 

organization which has the following characteristics:

    (i) Is an association or corporation organized under State or local 

law to engage in community development activities (which may include 

housing and economic development activities) primarily within an 

identified geographic area of operation within the jurisdiction of the 

recipient, or in the case of an urban county, the jurisdiction of the 

county; and

    (ii) Has as its primary purpose the improvement of the physical, 

economic or social environment of its geographic area of operation by 

addressing one or more critical problems of the area, with particular 

attention to the needs of persons of low and moderate income; and

    (iii) May be either non-profit or for-profit, provided any monetary 

profits to its shareholders or members must be only incidental to its 

operations; and

    (iv) Maintains at least 51 percent of its governing body's 

membership for low- and moderate-income residents of its geographic area 

of operation, owners or senior officers of private establishments and 

other institutions located in and serving its geographic area of 

operation, or representatives of low- and moderate-income neighborhood 

organizations located in its geographic area of operation; and

    (v) Is not an agency or instrumentality of the recipient and does 

not permit more than one-third of the membership of its governing body 

to be appointed by, or to consist of, elected or other public officials 

or employees or officials of an ineligible entity (even though such 

persons may be otherwise qualified under paragraph (c)(1)(iv) of this 

section); and

    (vi) Except as otherwise authorized in paragraph (c)(1)(v) of this 

section, requires the members of its governing body to be nominated and 

approved by the general membership of the organization, or by its 

permanent governing body; and

    (vii) Is not subject to requirements under which its assets revert 

to the recipient upon dissolution; and

    (viii) Is free to contract for goods and services from vendors of 

its own choosing.

    (2) A CBDO that does not meet the criteria in paragraph (c)(1) of 

this section may also qualify as an eligible entity under this section 

if it meets one of the following requirements:

    (i) Is an entity organized pursuant to section 301(d) of the Small 

Business Investment Act of 1958 (15 U.S.C. 681(d)), including those 

which are profit making; or

    (ii) Is an SBA approved Section 501 State Development Company or 

Section 502 Local Development Company, or an SBA Certified Section 503 

Company under the Small Business Investment Act of 1958, as amended; or

    (iii) Is a Community Housing Development Organization (CHDO) under 

24 CFR 92.2, designated as a CHDO by the HOME Investment Partnerships 

program participating jurisdiction, with a geographic area of operation 

of no more than one neighborhood, and has received HOME funds under 24 

CFR 92.300 or is expected to receive HOME funds as described in and 

documented in accordance with 24 CFR 92.300(e).

    (3) A CBDO that does not qualify under paragraph (c)(1) or (2) of 

this section may also be determined to qualify as an eligible entity 

under this section if the recipient demonstrates to the satisfaction of 

HUD, through the provision of information regarding the organization's 

charter and by-laws, that the organization is sufficiently similar in 

purpose, function, and scope to those entities qualifying under 

paragraph (c)(1) or (2) of this section.



[60 FR 1944, Jan. 5, 1995]