Challenge Grants

Challenge Grants are awarded from within the 15% Community Development Block Grant (CDBG) public service category cap. No more than 15% of any CDBG annual allocation may be expended for public service activities.

An eligible public service activity must be either a new service not currently receiving CDBG funds or a quantifiable increase in the level of an existing service.

Eligible public services include, but are not limited to:

  • Employment training
  • Homeless services
  • Crime prevention
  • Child care
  • Health
  • Drug abuse counseling
  • Education
  • Fair housing counseling
  • Energy conservation
  • Homebuyer down payment assistance
  • Recreational needs

Challenge grants will be for a minimum initial grant award of $20,000. New public service activities will be funded for one-year periods and conditionally renewed each year for a total of three years. Second-year continuation projects will be funded at the same level as year one if performance benchmarks and other requirements are met. Third-year continuation project awards will be reduced by 25% from years one and two.

Matching funds are required in the amount of 25% of the grant award for years one and two and a minimum of 40% in year three. When an agency receives two or more years of continuous CDBG funding, it may not receive another public service grant award for three years.