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The term "Colonia" has been borrowed from the Spanish term for a residential neighborhood. In the United States, a "colonia" has a specific meaning, referring to a community within the mainly rural US-Mexico border region with marginal conditions related to housing and infrastructure. Follow this link for more information about colonias history and other non-governmental organizations working in colonias.
In order to better serve the colonia residents, the National Affordable Housing Act of 1990 (as amended) included Section 916 which called for the border states of Arizona, California, New Mexico and Texas to set aside a percentage of their annual State CDBG allocations for use in the colonias. The use of these set aside funds is to help meet the needs of the colonias residents in relationship to the need for potable water, adequate sewer systems, or decent, safe and sanitary housing. Therefore, the set-aside funds may be utilized for any CDBG eligible activity that is, or is in conjunction with, a potable water, sewer or housing activity.
Furthermore, Section 916 specifically defined Colonias as:
(a) in the state of Arizona, California, New Mexico, or Texas;
(b) in the United States-Mexico border region;
(c) determined to be a colonia on the basis of objective criteria, including lack of potable water supply, lack of adequate sewage systems, and lack of decent, safe and sanitary housing; and
(d) in existence as a colonia before the date of the enactment of the Cranston-Gonzalez National Affordable Housing Act [November 28th of 1990].
For more information about obtaining funding for specific colonias projects please contact the agency in your state that administers the CDBG colonias set-aside funds:
Additional funding sources that can be used individually or in combination with State CDBG colonias set-aside funds:
GAO Report "Rural Water Infrastructure: Improved Coordination and Funding Processes Could Enhance Federal Efforts to Meet Needs in the U.S.-Mexico Border Region" (see HUD's response beginning on page 72)