TO: ADAM PIRRIE, CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: NOVEMBER 25, 2025
Reviewed by:
City Manager: AP
SUBJECT:
Title
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM - APPROVAL OF THE 2026-27 BUDGET AND AMENDMENT TO THE HOUSING REHABILITATION PROGRAM GUIDELINES (FUNDING SOURCE: COMMUNITY DEVELOPMENT BLOCK GRANT FUND)
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SUMMARY
The Community Development Block Grant (CDBG) Program is a federal program that provides funding to cities and counties to implement programs and projects designed to benefit low- and moderate-income individuals. Claremont’s estimated allocation for 2026-27 is $122,052, which represents a ten percent (10%) reduction from the 2025-26 allocation. The proposed allocation for 2026-27 is $83,744 for the Housing Rehabilitation Program, $18,308 for Senior Case Management, and $20,000 for Job Creation and Business Incentives.
In addition, the City has an unallocated CDBG balance of $201,158 from rollover funds and housing rehabilitation loan payoffs. To address the continued demand and rising construction costs, staff recommends allocating $100,000 of this balance to the 2025-26 Housing Rehabilitation Program. Staff also recommends allocating $5,000 from the unallocated balance to the 2026-27 Job Creation and Business Incentive Program, which will increase the program’s funding to $25,000.
Staff proposes amending the Housing Rehabilitation Program guidelines to increase the maximum loan amount from $20,000 to $30,000 and the maximum energy efficiency grant from $5,000 to $10,000. The program guidelines have also been updated to include a new citizenship and eligible immigration verification requirement, in compliance with Executive Order 14218. This requirement requires applicants to attest to U.S. citizenship or eligible immigration status and provide documentation for all household members to qualify for assistance under HUD programs.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Approve the Community Development Block Grant program budget for the 2026-27 programs as proposed, and authorize staff to proportionally increase or decrease each program budget based on the final Community Development Block Grant allocation;
B. Approve the 2025-26 Community Development Block Grant budget amendment to allocate $100,000 from the Community Development Block Grant unallocated balance to the Housing Rehabilitation Program and appropriate $100,000 in Community Development Block Grant unallocated balance to the Housing Rehabilitation Program;
C. Approve the 2026-27 Community Development Block Grant budget amendment to allocate $5,000 from the Community Development Block Grant unallocated balance to the Job Creation and Business Incentive Program and appropriate $5,000 in Community Development Block Grant unallocated balance to the Job Creation and Business Incentive Program; and
D. Approve the Housing Rehabilitation Program Guidelines with the proposed modifications.
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ALTERNATIVES TO RECOMMENDATION
In addition to the recommendation, there are the following alternatives:
A. Approve the 2025-26 CDBG budget with changes.
B. Request additional information.
FINANCIAL REVIEW
The estimated allocation of CDBG funding for 2026-27, of $122,052, is proposed to fund the City’s Housing Rehabilitation Program ($83,744), Senior Case Management Program ($18,308), and Job Creation and Business Incentive Program ($20,000). Additionally, staff will roll over any current unused funds for each program from 2025-26 to FY 2026-27.
Staff also requests to allocate $100,000 from the current CDBG unallocated funds to the 2025-26 Housing Rehabilitation Program. The current program budget is $106,892; the additional funds will increase the total program budget to $206,892. In addition, staff recommends allocating $5,000 from the CDBG unallocated balance to supplement the 2026-27 Job Creation and Business Incentive Program, increasing the total available funding to $25,000 to align with the program’s forgivable loan structure. After these allocations, the remaining CDBG unallocated balance will be $96,158.
The staff cost to prepare this report is estimated at $500 and is included in the operating budget of the Community Development Department.
ANALYSIS
The CDBG Program is a Federal Block Grant Program that began in 1974, providing funding to cities and counties to carry out programs and projects designed to benefit low- and moderate-income individuals. As a member of the Los Angeles County Urban County Authority (LACDA), Claremont receives its annual CDBG funding allocation through LACDA, which performs many of the administrative tasks required to comply with federal regulations.
2026-27 Proposed Budget
The proposed 2026-27 budget continues the City’s commitment to its three long-standing CDBG-funded programs: the Housing Rehabilitation Program, Senior Case Management Program, and Job Creation and Business Incentive Program. While the City’s allocation for 2026-27 is approximately 10 percent lower than the prior year, these programs continue to meet community needs and remain eligible under federal guidelines.
|
Program |
Budget |
|
Housing Rehabilitation & Energy Efficiency Grant Program |
$83,744 |
|
Senior Case Management Program |
$18,308 |
|
Job Creation & Business Incentive Program |
$25,000* |
|
Total |
$127,052 |
|
*Includes $5,000 from unallocated funds |
2025-26 Program Amendment
In addition to approving the upcoming fiscal year’s budget, staff recommends amending the current 2025-26 CDBG budget to allocate $100,000 of the City’s unallocated balance to the Housing Rehabilitation Program. The City’s unallocated balance of $201,157.57 is from rollover funds and loan repayments from prior years. Allocating these funds will ensure that the Housing Rehabilitation Program has sufficient resources to meet ongoing project demand and will prevent potential recapture of unused funds under federal regulations.
Housing Rehabilitation Program Guideline Updates
The Housing Rehabilitation Program was established in 1975 with an initial grant limit of $3,500. The maximum loan amount was later increased to $15,000 in 1991 and to $20,000 in 2005. In 2010, the City added a $5,000 Energy Efficiency Grant. No changes have been made since that time.
To reflect the rising costs of construction and materials, staff recommend increasing the maximum loan amount to $30,000 and the grant amount to $10,000, while maintaining the zero percent (0%) interest rate and deferring repayment until the sale or transfer of the property. This update will enable Claremont homeowners to undertake necessary major rehabilitation projects, such as roof replacements, plumbing and electrical repairs, and energy-efficiency upgrades, which have become unaffordable under the current limits.
New Citizenship and Eligible Immigration Verification Requirement
On June 25, 2025, President Trump issued Executive Order 14218, which requires verification of citizenship or eligible immigration status for participants in direct-benefit HUD programs. To comply with this order, staff proposes to amend the “Applicant Eligibility Requirements” section of the Housing Rehabilitation Program Guidelines. Applicants will be required to provide evidence of U.S. citizenship or eligible immigration status for each household member, regardless of age, to qualify for assistance. Applicants must sign a Declaration of Citizenship or Eligible Immigration Status attesting to their eligibility under HUD requirements. U.S. citizens will sign a Declaration of Citizenship form, while non-citizens will sign a Declaration of Eligible Immigration Status form and provide proof of age and supporting documentation.
This new requirement will be implemented through a Citizenship Declaration Form, which must be completed and submitted as part of the program application package and retained in the project file in accordance with HUD record-keeping requirements.
Senior Case Management Program
The Senior Case Management Program provides individual case management services to residents aged 55 and older, offering assistance with Medicare, Medi-Cal, Social Security, and other age-related concerns. The program averages 80 ongoing cases and more than 1,900 annual information inquiries. Funding for this program is limited to fifteen percent (15%) of the City’s annual CDBG allocation under federal rules, and the City’s General Fund continues to supplement program costs.
Job Creation and Business Incentive Program
The Job Creation and Business Incentive Program provides forgivable loans to new or expanding businesses that create permanent, full-time equivalent positions for low- and moderate-income individuals. One qualifying position is required for each $25,000 loan issued. Since the program’s adoption in 2009, the City has issued thirteen loans, supporting local economic growth and job creation. The City received one application this year; however, the business was deemed ineligible. The City continues to advertise this program to prospective businesses.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Council Priorities and 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by: Prepared by:
Brad Johnson Alex Cousins
Community Development Director Senior Management Analyst
Attachment:
Proposed Claremont Housing Rehabilitation Program Guidelines