CDBG Entitlement FAQ

We are planning to provide technical assistance and training to owners of microenterprises and persons developing microenterprises for a small fee. Is the national objective to be met for low-mod jobs and do we have to track jobs created from this type of assistance?

Date Published: May 2015

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It is important to remember that microenterprise activities are eligible when the business (at the time of assistance) is no larger than 5 individuals, including the owner. Technical assistance to microenterprises is eligible under 24 CFR570.201(o)(1)(iii), provided a national objective is met. The national objective most appropriate for this kind of activity is Low-Mod Limited Clientele. If the owners/individuals planning to start microenterprises are low and moderate income, this activity qualifies under 24 CFR.570.208(a)(2)(iii) and all participants are presumed to be low-and moderate income. Creating jobs is not required when using the limited clientele national objective, although the grantee may, at its discretion, track any jobs that are developed and report them into IDIS. The CDBG Program allows charging fees for a service when the fees are minor and do not prohibit a typical low-and moderate-income individual from participating in the activity. When fees are received, they are considered applicable credits and must be credited back to the activity. Therefore, if tuition is collected in this program, it should be used to offset the costs of the program. This should reduce the amount of CDBG funds required to fund the project.

Tags: CDBG Entitlement Program Economic Development