Community Development Block Grant (CDBG) - Housing Rehabilitation

The Community Development Block Grant Housing Rehabilitation Program is administered by the Illinois Department of Commerce and Economic Opportunity through federal Community Development Block Grant funding provided by the U.S. Department of Housing and Urban Development. The program supports eligible Illinois non-entitlement communities in addressing housing rehabilitation needs for low-to-moderate income households. The Housing Rehabilitation component specifically focuses on preserving owner-occupied single-family housing, correcting health and safety deficiencies, improving energy efficiency, and encouraging neighborhood revitalization. The program operates under the federal Housing and Community Development Act of 1974 and aligns with statewide objectives related to housing preservation, community development, and improved living conditions for low-to-moderate income residents. For the 2026 funding cycle, approximately $15,000,000 has been allocated to the Housing Rehabilitation Program, with an anticipated 18 awards. Grant awards range from $300,000 to $800,000. The Department established a minimum award threshold of $300,000 and a maximum grant ceiling of $800,000 per project. The program limits Community Development Block Grant expenditures to $70,000 per rehabilitated household in order to maximize the number of households served while maintaining meaningful rehabilitation impact. Applicants are encouraged to leverage additional financial resources such as USDA Rural Development assistance, local government funds, or other housing programs to strengthen project competitiveness and expand rehabilitation capacity. Eligible activities include rehabilitation of owner-occupied single-family homes occupied by verified low-to-moderate income households. Allowable costs include labor and materials, replacement of structural or mechanical systems, plumbing and electrical improvements, water and sewer connections needed for code compliance, lead-based paint mitigation, accessibility modifications for elderly or disabled residents, energy efficiency improvements, hazard and flood insurance premiums, and repairs to garages when health or safety issues exist. The program also allows reimbursement for Activity Delivery and Rehabilitation Administration costs within specified limits. Activity Delivery costs may include grant administration, environmental review preparation, legal services, audit expenses, and project coordination and are capped at $40,000. Rehabilitation Administration costs are available on a sliding scale depending on the number of homes rehabilitated, with a maximum of $40,000 for projects involving ten or more homes. Eligible applicants are limited to Illinois units of general local government, including cities, villages, counties, and townships that are not HUD entitlement communities and are not located within entitlement counties unless formally opted out. Applicants must be registered and prequalified through the Illinois Grant Accountability and Transparency Act system by the application deadline. Communities that received a competitive award in the previous year are not eligible to apply in the same component during the following year. Housing rehabilitation applications must propose rehabilitation of at least eight owner-occupied homes occupied by verified low-to-moderate income households. Applicants must submit housing needs surveys completed after August 27, 2025, and demonstrate resident support through public hearing documentation, sign-in sheets, and certified meeting minutes. The application process includes extensive documentation requirements and procedural compliance obligations. Applicants must conduct a public hearing before application submission and prior to adoption of a local resolution authorizing submission of the application. Public notices must be published at least seven calendar days before the hearing, and project information must be made available to residents during the public comment period. Required application materials include the Uniform Grant Application, Uniform Budget Template, conflict of interest disclosure, mandatory disclosure forms, project narratives, housing needs surveys, project maps, FEMA floodplain maps, leveraged funding commitment letters, Fair Housing resolutions, contractor documentation, cost estimates with photographs, W-9 forms, IRS certification letters, SAM registration documentation, and GATA prequalification verification. Applicants must also identify their grant administrator and housing inspector, and procurement requirements apply to contracted administrative or inspection services. Applications are evaluated competitively using a 100-point scoring system based on Project Need, Project Impact, Coordination of Resources, and Project Readiness. Project Need scoring considers Opportunity Zone designation, underserved area status, and low-to-moderate income concentration within the project area. Project Impact scoring evaluates the ratio of eligible housing surveys submitted compared to the proposed rehabilitation scope. Coordination of Resources scoring rewards additional funding commitments and evaluates the prior performance of grant administration agencies based on open grant drawdown percentages. Project Readiness scoring evaluates contractor participation, housing inspector qualifications, public engagement, outreach planning, project maps, and detailed rehabilitation cost estimates. The Department reserves the right to deny funding for applications involving unresolved audit findings, deferred maintenance concerns, or noncompliance with program requirements. The application period opened on May 4, 2026, and applications are due no later than 5:00 p.m. on August 27, 2026. Applications must be submitted to the Illinois Department of Commerce and Economic Opportunity Office of Community Development in Springfield, Illinois. Facsimile and email submissions are not accepted. The program includes a mandatory virtual application workshop scheduled for May 7, 2026. Questions regarding the program may be directed to the Office of Community Development at ceo.ocd@illinois.gov or by telephone at 217-558-4222. The program is recurring annually as part of Illinois' ongoing administration of Community Development Block Grant funding for non-entitlement communities.

Submit more eligible surveys than the minimum required because a 3:1 survey-to-scope ratio receives maximum scoring points. Demonstrate leveraged funding commitments with firm documentation. Use experienced grant administrators and qualified housing inspectors to strengthen readiness scoring. Include detailed project maps and contractor participation letters to maximize competitiveness.