COMMERCIAL REHABILITATION
This program funds projects assisting private property owners in the rehabilitation of structures to prevent the spread of blighted conditions.
FUNDING
$300,000
maximum
MATCH
25%
of the CDBG grant request
Qualify
SEE IF YOUR COMMUNITY QUALIFIES
Check qualifications, programs, and more
Purpose
The Commercial Rehabilitation Grant Program is intended to help cities improve the quality of their downtown commercial districts by assisting private property owners in the rehabilitation of blighted structures, and return them to productive businesses. It is hoped that a strategic investment of grant funds in a key building would prevent the spread of blighted conditions to other nearby structures and be a catalyst for change in the commercial district.
Qualifying Projects
This program funds projects assisting private property owners in the rehabilitation of blighted structures to prevent the spread of blighted conditions. Eligible expenses include:
CDBG National Objective
All CDBG projects must meet a national objective and involve an eligible activity under the Housing and Community Development Act of 1974. National objectives are 1) benefiting Low- and Moderate-Income persons (LMI), 2) aid in the prevention or elimination of blight, and 3) meet a need having a particular urgency (urgent need).
The Commercial Rehabilitation Grant Program will utilize one of two national objectives: benefiting Low- and Moderate-Income persons (job creation/retention) or prevention or elimination of slums and blight (spot basis).
Selection Criteria
Grant applications are evaluated for funding based on project need, readiness, impact, sustainability and matching funds source and availability. Download the 2025 Commercial Rehabilitation Guidelines for more information on program requirements.
Key considerations include:
Matching Funds
Local funding is required for all CDBG projects, and no project can be funded entirely by grants. Matching funds can originate from private or public sources, but the application must document that these funds are firmly committed (e.g., a letter of commitment from a bank or other funding source). Examples of matching funds include bank loans, industrial revenue bonds, owners’ equity, contributions from local governments, or grants and loans from economic development entities.
Applicants are allowed to match CDBG funds with other grant funds if that funding is secured in a city/county account by the time the contract is signed. At least 10% of the matching funds must be cash from a local source (i.e., owner funds, city/county cash). Any expenses incurred prior to the grant award are ineligible for reimbursement with CDBG funds. This includes grant writing, engineering, and architecture.
Communities may apply for multiple CDBG categories, but only one application may be submitted from a major category. Major categories include: Large and Small Community Facilities, Blueprint to Build, Regional Water Implementation, and Water and Sewer Infrastructure. For example, a city cannot apply for both a Large and Small Community Facilities project. However, a city can submit applications for both a Housing Rehabilitation and a Community Facilities: Large Grants project.
The local government must hold two public hearings to demonstrate that reasonable efforts have been undertaken to ensure involvement of citizens or citizen organizations throughout all stages of the program. A notice about the hearing must be published in a local newspaper with the widest circulation, and it must appear at least 5 full days before the hearing—not counting the day it’s published or the day of the hearing itself. These hearings must be held at a time and location convenient to potential or actual beneficiaries, with accommodations for non-English speaking residents and persons with disabilities. A sample public hearing notice is included in program guidelines.
First Public Hearing: Must be held at least 15 days before the CDBG application is submitted, and no earlier than 120 days. The purpose of the hearing is to inform citizens about the proposed project, including its location, total cost, activities, and beneficiaries. Community members must be given a chance to suggest other project ideas and share their input, and the local governing body should carefully consider this feedback before submitting the application. The total project funding and CDBG amount requested must match what appears in the public hearing notice.
Second Public Hearing: Must be held at the conclusion of the project, prior to close out to inform citizens of the project’s successful or unsuccessful completion, and to obtain input on the grantee’s performance.
Yes, all CDBG-funded projects are federally required to have an environmental review. The Environmental Determination of Level of Review form must be submitted with the application. This will inform Commerce as to what level of environmental review you will undertake for your project if awarded.
Post-award, the city or county must conduct a full environmental review of the project, even for small projects that don’t require construction. This responsibility cannot be delegated and the cost to conduct the review must be paid with local funds. Project activities may not begin until after Commerce issues the environmental release of project funds.
Cities and Counties can qualify by using the 2015 HUD Census data spreadsheet to determine their current LMI percent that HUD is reporting as a qualifier. If the community does not meet our 51 percent LMI requirement based on the data in that document, they can choose to do an income-based survey of the city or county that benefits from the project. Sometimes projects are not a city-wide or county-wide benefit, which results in target area benefit. To meet the 51 percent LMI requirement for this type of project, an income-based survey of the beneficiaries only in that area is required. Additional information on how to conduct an income-based survey can be requested from the CDBG team.
Community Showcase Map
See other communities that have received funding in past years
Qualify
LMI help The Community Development Block Grant (CDBG) program requires that each CDBG funded activity must either principally benefit low- and moderate-income (LMI) persons, aid in the prevention or elimination of slums or blight, or meet a community development need having a particular urgency.
| Persons in Family |
LMI Family Income Limit* |
|---|---|
| 1 | |
| 2 | |
| 3 | |
| 4 | |
| 5 | |
| 6 | |
| 7 | |
| 8 |
LMI calculations are from the 2020 Census and LMI by household are from 2025 HUD Section 8. Final LMI will be confirmed upon application review.
Find Assistance
Assistance from a professional with CDBG grant experience can help you streamline and strengthen your application. Some or all of the costs to engage help can be covered by your award.
Find Pros in Your AreaApplication
2025 CDBG Commercial Rehab Guidelines (.pdf) view all resources ApplicationNovember 14, 2025
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