CDBG Entitlement FAQ

If CDBG funds only pay for pre-development costs on a project that will ultimately lead to jobs for low- and moderate-income people, does the use of the CDBG funds in the project trigger Davis-Bacon requirements? CDBG funds will not be used to pay for any other part of the project which may include acquisition, construction, or rehabilitation.

Date Published: May 2015

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There are a number of project costs that may be paid with CDBG funds without triggering the Davis-Bacon requirements. These include:

  • Acquisition costs,
  • Financing costs, and
  • Soft costs such as the cost of legal, architectural and engineering, and construction management services.

The use of CDBG for predevelopment costs such as those described in your question will not alone trigger Davis-Bacon prevailing wage requirements. However, if any construction work of $2,000 or more is paid for with CDBG funds, then all of the construction costs are covered. It is the use of funds, not the timing, that matters.

Tags: CDBG Entitlement Program Davis-Bacon