Rents and sale proceeds from CDBG-assisted property are PROGRAM INCOME, must be spent before new draws, and any year-end balance above one-twelfth of the grant is remitted to HUD

cdbg.financial.program_income_definition_and_the_one_twelfth_year_end_remittance · v1.0.0

Program income is gross income received by the recipient or a subrecipient DIRECTLY GENERATED FROM THE USE OF CDBG FUNDS, and for a housing deal the definition catches the obvious money: proceeds from the disposition by sale or long-term lease of real property purchased or improved with CDBG funds; GROSS INCOME FROM THE USE OR RENTAL of real property acquired with CDBG funds, less costs incidental to generating it; gross income from the use or rental of real property owned by the recipient or subrecipient that was CONSTRUCTED OR IMPROVED with CDBG funds, less incidental costs; payments of principal and interest on CDBG loans; and interest earned on program income pending disposition. There is a de minimis floor: income received in a single program year by the recipient and all its subrecipients does not count as program income if the total does not exceed $25,000. Retained program income is treated as additional CDBG funds subject to every requirement governing the use of CDBG funds, and the disposition rules bite in order: revolving fund repayments and interest must be substantially disbursed before new Treasury withdrawals for the same activity; substantially all other program income must be disbursed for eligible activities before additional Treasury withdrawals; and AT THE END OF EACH PROGRAM YEAR any aggregate program income cash balance and investments exceeding ONE-TWELFTH OF THE MOST RECENT ENTITLEMENT GRANT must be REMITTED TO HUD as soon as practicable, to be placed in the recipient's line of credit. That last calculation reaches balances held by subrecipients, not just the grantee.

Confidence

high

Effective from

1995-11-09

Consequence model

agency finding with cure

Last reviewed

2026-08-22