What Community Development Funding Is For
Community development grants fund the physical, economic, and social infrastructure of neighborhoods and communities—affordable housing, commercial revitalization, public facilities, workforce development, and services for low-income residents. These programs are designed to address concentrated poverty and disinvestment, and they're generally targeted at the communities with the greatest need.
The funding landscape is layered: federal programs flow to states and local governments, which run their own competitive cycles. Foundation grants add another tier. Understanding which layer is relevant to your project—and who to approach—is the first step in any community development funding strategy.
Core Federal Programs
Community Development Block Grant (CDBG)
CDBG is HUD's flagship community development program, distributing roughly $3.3 billion annually. Entitlement cities (population 50,000+) and urban counties (population 200,000+) receive direct annual allocations. Smaller jurisdictions access funding through their state's CDBG program.
CDBG funds an exceptionally broad range of activities: housing rehabilitation, public facilities, economic development, public services, and planning. The 70% national objective requires that 70% of CDBG funds benefit low- and moderate-income persons. Community organizations typically access CDBG through their city or county's community development department, which runs a subgrant competition each year.
HOME Investment Partnerships Program
HOME is HUD's largest grant program for affordable housing, providing formula allocations to states and local governments for housing construction, rehabilitation, homebuyer assistance, and tenant-based rental assistance. Community housing development organizations (CHDOs) are required to receive at least 15% of each jurisdiction's HOME allocation. If your organization qualifies as a CHDO—a nonprofit that meets HUD's organizational, financial, and community development requirements—you have a dedicated funding set-aside.
Choice Neighborhoods Initiative
Choice Neighborhoods provides large competitive grants ($30M–$50M) to transform distressed public or HUD-assisted housing into mixed-income communities. These are complex, multi-year projects requiring significant planning capacity and community engagement. Planning grants ($1M–$3M) are available for communities beginning the transformation process.
Promise Zones
Promise Zones are high-poverty communities designated by HUD, USDA, and ED where federal agencies provide preference points on competitive grant applications. If your community is a designated Promise Zone, you can access this preference across multiple federal programs. The current Promise Zone designations are in effect through 2028.
New Markets Tax Credits (NMTC)
NMTCs are not grants but function similarly by subsidizing investment in low-income communities. Community Development Entities (CDEs) receive NMTC allocations from the CDFI Fund and use them to attract private investment into community facilities, commercial real estate, and operating businesses in qualified census tracts. The effective subsidy to the community development project is roughly 20–25 cents on the dollar. For larger projects ($5M+), NMTC financing is often the most accessible source of below-market capital.
CDFI Fund Programs
The Community Development Financial Institutions (CDFI) Fund at Treasury administers several grant programs for organizations working in low-income communities:
- CDFI Program Financial Assistance grants: Grants to certified CDFIs for lending capital and technical assistance. Awards range from $500K to $2M. Requires a one-to-one matching contribution.
- Healthy Food Financing Initiative (HFFI): Grants and loans for healthy food retail in food deserts.
- Bank Enterprise Award (BEA) Program: Incentive awards to FDIC-insured banks for increasing lending and investment in distressed communities.
- Rapid Response Program: Emergency capital grants to CDFIs serving communities affected by economic shocks.
State and Local Community Development Programs
States administer their own community development grant programs using state appropriations and federal pass-through dollars. Common programs include:
- State CDBG programs for non-entitlement communities (administered by state housing or commerce agencies)
- Brownfields remediation grants for redevelopment of contaminated sites
- Downtown revitalization and Main Street programs
- Affordable housing trust funds (many states have dedicated trust funds with annual grant cycles)
- Community economic development grants through state economic development agencies
Foundation Funding for Community Development
National foundations with significant community development portfolios include the Ford Foundation, Kresge Foundation, Rockefeller Foundation, and JPMorgan Chase Foundation. Locally, community foundations often run neighborhood grant programs with awards from $10,000 to $250,000—more accessible than national funders and often faster to close.
The Robert Wood Johnson Foundation funds health equity and community health programs, which overlap significantly with community development. The Reinvestment Fund and LISC (Local Initiatives Support Corporation) combine grants with loans and technical assistance for community development projects.
Building a Competitive Application
- Lead with local data: Census tract poverty rates, housing cost burden data, health outcome disparities, and unemployment figures establish the need with specificity. National statistics don't substitute for local evidence.
- Document community engagement: Government funders—especially HUD programs—heavily weight evidence that the community participated in shaping the project. Attendance records from community meetings, sign-in sheets, and letters of support from residents and community organizations are essential.
- Show leverage: Most community development grants score applicants on their ability to leverage additional resources. A project that combines CDBG with HOME funds, bank loans, and private equity demonstrates the organizational capacity funders want to see.
- Outcomes, not activities: "We will rehabilitate 30 housing units serving 65 households with incomes below 60% AMI, of which 20 units will serve households below 30% AMI" is an outcome. "We will run a housing rehabilitation program" is not.
Finding Programs for Your Project
Community development funding is spread across HUD, Treasury, USDA, EPA, and dozens of state agencies. FindGrants.io aggregates grants from all of these sources and matches them to your organization's profile—your legal status, geographic focus, activity type, and target population. The ranked results help you identify which programs have the highest alignment with your specific project before you invest in a full application.