Community Development Block Grant

(CDBG)

Department of Housing and Urban Development

Proposed Cut

$3.3B

% Reduction

100.0%

Action Type

elimination

Who Is Served

1,250+ cities/counties; since 2005: 563,236 jobs created; 7.5 million people served in FY2023 alone

Summary

The Community Development Block Grant (CDBG) program gives U.S. cities, counties, and states flexible federal money to fund local priorities like housing repair, water and sewer upgrades, and job-creation projects, mainly for low- and moderate-income residents. The FY2027 budget proposes eliminating CDBG entirely, cutting its full $3,300 million (100%) in funding, with the administration arguing the block grant is wasteful and that local governments should pay for development themselves.

Who Is Affected

More than 1,250 cities and counties currently receive CDBG funds directly as "entitlement communities," and dozens of states pass along additional funds to smaller, non-entitlement towns and rural counties. In FY2023 alone the program reached about 7.5 million people through public services and helped create or retain over 14,500 jobs that year, part of more than 563,000 jobs tied to the program since 2005. Eliminating the grant would end this funding stream for local housing rehabilitation, senior services, small-business assistance, and infrastructure projects nationwide.

What this cut would actually mean

If CDBG is eliminated, local governments would lose their single largest flexible source of federal community development money, forcing them to delay or cancel projects such as street and water-system repairs, home rehabilitation for low-income and elderly residents, and small-business or job-training programs, since most localities lack the tax base to fully replace $3.3 billion in lost funding. Poorer and rural communities that depend most on the non-entitlement state allocation would likely be hit hardest, even though critics note the current funding formula sometimes benefits wealthier areas. Congress rejected an identical elimination proposal for FY2026 and kept CDBG funded at $3.3 billion, suggesting lawmakers may again resist a full cutoff.

Sources

Department of Housing and Urban Development (HUD): FY2026 Budget Request Fact Sheet — Congressional Research Service summary noting the administration's proposal to eliminate the Community Development Block Grant along with other HUD programs.
Trump Administration Releases Full FY 2026 Budget with Devastating Proposed Cuts to Housing and Community Development Programs — National Association of Housing and Redevelopment Officials describes the administration's proposal to eliminate CDBG and HOME funding.
Support Local Development and Infrastructure Projects Through the Community Development Block Grant Program — National Association of Counties data on the more than 1,250 entitlement communities served by CDBG and FY2023 job-creation and service figures.
HUD Grants and Housing Programs in 2026: CDBG, HOME, CoC, and What Still Exists Under DOGE — Explains that Congress rejected the administration's proposed elimination of CDBG for FY2026 and kept it funded at $3.3 billion.
Community Development Block Grant Program — HUD's official program page describing CDBG's purpose, eligibility, and formula-based distribution to states and local governments.