Small Cities Development Program

The Small Cities Development Program is administered by the Minnesota Department of Employment and Economic Development and represents the state level implementation of the federal Community Development Block Grant program for non entitlement communities. The program originates from the Housing and Community Development Act of 1974 and is funded through allocations from the United States Department of Housing and Urban Development. The state administers these funds to smaller jurisdictions that do not receive direct federal entitlement funding, ensuring that rural and smaller population areas have access to community development resources. The program is governed by Minnesota statutes and administrative rules and is structured to address economic and housing challenges at the local level. The purpose of the program is to support community development activities that strengthen local economies and improve living conditions, particularly for low to moderate income households. Eligible activities include owner occupied housing rehabilitation, rental housing rehabilitation, commercial building rehabilitation, and public facility improvements. These activities must align with federal Community Development Block Grant national objectives, which include benefiting low to moderate income populations, eliminating slum or blight conditions, or addressing urgent community needs such as disaster recovery. The program encourages coordinated planning with other funding sources and agencies to maximize impact and sustainability. Funding availability varies annually based on federal allocations to the state, which are determined by factors such as population, poverty levels, housing overcrowding, and housing age. Funds are distributed competitively, and applicants must demonstrate strong need, community impact, and cost effectiveness. While no fixed award amounts are specified in the source material, applicants are expected to design projects that align with program priorities and demonstrate measurable outcomes. Grant payments are made on a reimbursement basis, requiring grantees to incur and document eligible expenses prior to receiving funds. Eligibility is limited to units of general local government, specifically cities with populations under fifty thousand and counties or townships with unincorporated populations under two hundred thousand. Applicants must be in compliance with all applicable federal and state regulations governing the Community Development Block Grant program. The program emphasizes benefits to low to moderate income households and requires applicants to demonstrate how proposed activities will meet this objective or address other qualifying conditions such as blight or urgent need. The application process consists of two phases, beginning with a preliminary proposal followed by a full application for those invited to advance. Preliminary proposals must be submitted in printed form, including one original and one copy, and cannot be submitted electronically. These proposals are reviewed by program staff to determine eligibility and competitiveness. Only applicants deemed competitive or marginally competitive are invited to submit a full application, which undergoes a more detailed evaluation and scoring process based on need, community impact, cost effectiveness, and demographics. The timeline for the program includes a preliminary proposal deadline of November 26, 2025, with review recommendations expected in early January 2026 and status announcements in mid January 2026. Full applications are due April 15, 2026, and funding recommendations are anticipated in July 2026. Final award decisions are made by the department commissioner, and announcements are expected approximately ten weeks after the application deadline. Grantees are subject to ongoing reporting requirements, including quarterly and annual reports, and must comply with monitoring, auditing, and procurement standards throughout the grant period. The program includes strict accountability, reporting, and compliance requirements. Grantees must maintain financial records, submit progress reports, and comply with monitoring and audit provisions for at least six years after project completion. Procurement must follow municipal and federal regulations, and vendors must not be suspended or debarred. The program also enforces conflict of interest policies and public data requirements to ensure transparency and integrity in the grant making process. Contact for submission confirmation is provided through a designated program staff member via email.

Focus on demonstrating strong community need measurable impact and cost effectiveness and ensure alignment with low to moderate income benefit requirements