Economic Development
Unlike other CDBG grants, the Economic Development Grant Program operates as a loan that must be repaid.
ECONOMIC DEVELOPMENT
$750,000
Funding Limit
MATCH
50%
of the CDBG grant request
Qualify
SEE IF YOUR COMMUNITY QUALIFIES
Check qualifications, programs, and more
Purpose
The Economic Development grant program funds projects that assist for-profit businesses or agricultural cooperatives with needed public infrastructure improvements to support businesses. The infrastructure improvements must be owned by a public entity, a regulated utility, or a common carrier. Unlike other CDBG grants, this program operates as a loan that must be repaid from the business back to the local government and back to the state. The grant amount will be repaid over a 10-year period at an interest rate of 0%. The assisted business will have up to 24 months upon contract end date to create or retain the LMI jobs set forth in the application and to achieve the national objective.
Qualifying Projects
A total of $750,000 has been allocated for the Economic Development program in 2026. The maximum amount of CDBG funds that can be applied for is $750,000. This program funds projects assisting for-profit businesses or agricultural cooperatives with infrastructure improvements. Eligible expenses include:
Eligible Applicants
Only cities and counties (units of local government) can apply for CDBG grants. Large cities and urban counties are considered entitlement communities and receive CDBG funds directly from HUD, while smaller communities apply through the state CDBG program. The following entitlement communities are NOT eligible to apply for the state CDBG program: Kansas City, Lawrence, Leavenworth, Manhattan, Overland Park, Topeka, Wichita, and all of Johnson County. Eligible Businesses: The business operation assisted by CDBG funding must also be in a non-entitlement area of the state. Two businesses may participate in the application and grant, but the city or county is the legal applicant. The private for-profit business or cooperative must provide financial information and a business plan as part of the application process.
CDBG National Objectives
All CDBG projects must meet a national objective and involve an eligible activity under the Housing and Community Development Act of 1974. The three CDBG national objectives are:
All activities proposed in applications for the Economic Development Grant Program must meet the national objective of benefiting LMI persons through the subcategory Jobs. Jobs will be computed and calculated on a Full-Time Equivalent (FTE) basis. A job is converted to FTE status by dividing 40 by the number of hours worked during the week.
Selection Criteria
Grant applications are evaluated for funding based on project need, financial feasibility/ability to repay, project readiness, job creation/retention, and match. Key considerations include:
Download the 2026 CDBG Economic Development Guidelines for more information on program requirements.
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.
A pre-application must be submitted and approved by CDBG before an application can be submitted. The pre-application is used to determine project eligibility and readiness before proceeding to the full application stage. Commerce will review submissions within ten days and provide further instructions. Only those with an approved pre-application may submit a full application, but approval of the pre-application does not ensure grant funding. Please discuss your project with CDBG staff before submitting a pre-application. You can contact a project manager at any time or email [email protected].
Pre-Application Form
Communities may apply for multiple CDBG categories but can only be awarded up to two projects total, with no more than one from a major category. Major categories include: Community Facilities: Large/Small, Blueprint to Build, Water and Sewer Infrastructure, and Regional Water Implementation. For example, a city can submit applications for a Housing Rehabilitation and a Community Facilities: Large Grants project. However, a city cannot apply for both a Large and Small Community Facilities project.
Citizen participation is a required component of the CDBG program. Any local government applying for CDBG funds must provide citizens with reasonable opportunities to participate in the planning and development of applications, especially residents of proposed project areas. Citizens must be provided adequate and timely information so they can be meaningfully involved in important decisions.
Public Hearing Timeline
The purpose of the initial public 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 initial public hearing must be held at least 15 FULL days before the CDBG application is submitted, and no earlier than 120 days. The total project funding and CDBG amount requested must match what appears in the public hearing notice.
Public 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. Records of these efforts must be part of the grant files, including the public hearing notice, affidavit of publication, record of posting, public hearing attendance log, public hearing minutes, any written complaints and grantee response, and any other documented efforts to involve citizens throughout all stages of the project.
Requirements to Publish a Public Hearing Notice
A notice about the hearing must be published at least 5 FULL days in advance (but no more than 20 days) in advance to allow citizens the opportunity to schedule their attendance. The day that the public hearing notice is first advertised and the day of the public hearing do NOT count towards the minimum 5 day period.
Notices must be published in a local newspaper having the widest general circulation in the community or on the government website that is accessible to persons with disabilities or Limited English Proficiency. Applicants must also make every effort to inform those who might not be reached through the newspaper notice or website that the public hearing is to be held. Such efforts might include the distribution of leaflets, posting notices on bulletin boards at town hall, social media channel announcements, notices to local organizations, clubs, and churches, and/or personal contact.
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.
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 2026 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
2026 CDBG Economic Development Guidelines (.pdf) view all resources ApplicationApplication Deadline: October 16, 2026
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