CBDO Application

Publication Date: 08/14/2023
Document Type: Online Forms and Applications
Sponsor: Community Development Administration

Summary
What is a Community-Based Development Organization (CBDO)?
A CBDO is an organization that meets HUD’s strict criteria under 24 CFR § 570.204(c) — and is eligible to carry out special community development activities with CDBG funding — beyond what most subrecipients can do.

Who Should Apply to Be a CBDO? Organizations that:
— Want to conduct neighborhood revitalization, economic development, or energy conservation projects with CDBG funds (24 CFR § 570.204(a));
— Are nonprofit or for-profit entities primarily serving a defined geographic area, such as a neighborhood;
— Are not public agencies and maintain community-based control of governance.

Key Features Required to Qualify as a CBDO (per 24 CFR § 570.204(c)(1)):
— Organized under state or local law to do community development work.
— Primary purpose: improving the physical, economic, or social environment of its area — especially for low- and moderate-income (LMI) residents.
— Geographic focus: must define and serve a neighborhood-sized area — or a jurisdiction under 25,000 population.

— Board composition: at least 51% of board members must be:
 — LMI residents of the service area,
 — Business owners or officers located in the service area, or
 — Representatives of LMI neighborhood organizations.

— Independent from local government:
 — No more than one-third of board members may be public officials or employees.
 — Not an agency or instrumentality of the CDBG recipient.
— Autonomy: must be able to select vendors and retain control of assets.

Other Qualifying Pathways Include:
— Certain SBA-certified development companies (570.204(c)(2)).
— A CHDO under the HOME program focused on one neighborhood (570.204(c)(2)(iii)).

What HUD Funds/Activities Require CBDO Status?
Only CBDOs may carry out “Special Activities by CBDOs” as defined in 24 CFR § 570.204(a), which include:
— Neighborhood revitalization projects — large enough to reverse decline in a defined area.
— Community economic development projects — promoting job creation, business development, or access to affordable housing linked to employment.
— Energy conservation projects — benefiting local residents, especially in LMI areas.

These activities may include some that are not otherwise eligible under standard CDBG rules — but are allowed only for CBDOs (see § 570.204(a) and (b)).

However, CBDOs cannot:
— Engage in ineligible activities under § 570.207(a) (e.g., general government expenses);
— Provide public services unless they directly support economic opportunity or a HUD-approved strategy (§ 570.204(b)(2));
— Exceed the planning and administration spending cap under § 570.200(g).

Summary Checklist of Eligibility for CBDO Status:
— Nonprofit or for-profit corporation
— Community development purpose focused on LMI area
— Defined service area (e.g., one neighborhood)
— Community-based board — 51%+ representing local stakeholders
— Independent from government control
— Not subject to asset reversion
— Free to choose vendors