Raleigh Community Development: Grants, Programs, and Neighborhoods

Raleigh's community development function channels federal, state, and municipal resources into housing rehabilitation, neighborhood revitalization, and economic opportunity programs targeting low- and moderate-income residents across the city. This page covers how those programs are structured, what triggers funding decisions, how grants differ from loans and forgivable loans, and where community development authority ends and other city or county functions begin. Understanding these distinctions matters for property owners, nonprofit housing developers, neighborhood associations, and small businesses seeking to navigate City of Raleigh assistance programs.

Definition and scope

Community development, as administered by the City of Raleigh's Community Development Division, refers to a set of programs funded primarily through the U.S. Department of Housing and Urban Development (HUD) and implemented locally to address housing affordability, physical blight, and economic opportunity gaps. The two principal federal funding streams are the Community Development Block Grant (CDBG) program and the HOME Investment Partnerships Program (HOME), both authorized under federal statute and administered nationally by HUD.

CDBG requires that at least 70 percent of annual expenditures benefit low- and moderate-income persons, as established in 24 CFR Part 570. HOME funds flow through a formula allocation to participating jurisdictions and must be matched at a rate of 25 cents per federal dollar for most activities, per 24 CFR Part 92. Raleigh qualifies as an entitlement community under the CDBG program, meaning HUD allocates funds directly to the city rather than through the state of North Carolina.

The scope of this page covers programs administered by the City of Raleigh within its incorporated municipal boundaries. Activities in unincorporated Wake County, the towns of Cary, Apex, or Garner, or state-administered programs through the North Carolina Housing Finance Agency (NCHFA) are not covered here. For raleigh-affordable-housing-policy context, the city's policy framework extends beyond community development funding to include inclusionary zoning and density incentives, but those instruments fall under a separate regulatory mechanism.

How it works

The City of Raleigh receives its CDBG and HOME allocations annually through HUD's formula grants process. The allocation amount is calculated using census data inputs including population, poverty rate, housing overcrowding, age of housing stock, and population growth lag relative to metropolitan areas. HUD publishes each entitlement city's allocation in the Federal Register after the congressional appropriation is finalized.

Once funding is received, the city operates under a five-year Consolidated Plan and an annual Action Plan — documents required by HUD that specify how the jurisdiction will deploy resources across eligible activity categories. The Consolidated Plan must include a Citizen Participation Plan and at least one public hearing before adoption, as required under 24 CFR Part 91.

The funding pipeline from HUD to end beneficiaries typically flows through one of three delivery structures:

  1. Direct city program delivery — City staff administer housing rehabilitation loans or grants to individual homeowners meeting income eligibility thresholds (generally at or below 80 percent of Area Median Income).
  2. Subrecipient agreements — Nonprofit organizations receive CDBG or HOME funds through written agreements with the city; they deliver services such as homebuyer counseling, transitional housing, or neighborhood code enforcement support.
  3. Community Housing Development Organizations (CHDOs) — A distinct category under the HOME program; CHDOs must receive at least 15 percent of each year's HOME allocation and must meet HUD's capacity and organizational standards for nonprofit housing developers.

The distinction between a grant and a forgivable loan is operationally significant. Rehabilitation assistance to owner-occupied homes is frequently structured as a deferred, forgivable loan — principal is forgiven incrementally over a compliance period (commonly 5 to 15 years) if the owner continues to occupy the property. A straight grant imposes no repayment obligation. A deferred loan is repayable only upon sale, transfer, or violation of occupancy requirements.

Common scenarios

Owner-occupied rehabilitation: A homeowner at 60 percent of Wake County's Area Median Income applies for assistance to repair a failing roof and substandard electrical system. The city conducts a lead-based paint inspection (required for pre-1978 housing under 24 CFR Part 35), scopes the work, and provides a forgivable loan of up to the program maximum. The homeowner must occupy the property for the full compliance period.

Affordable rental housing production: A nonprofit developer acquires a vacant lot in Southeast Raleigh and proposes a 24-unit rental development for households at or below 60 percent AMI. The developer applies for HOME funds as a CHDO. The city underwrites the project, reviewing pro forma financials, construction costs, and long-term affordability commitments. HOME-assisted units must remain affordable for a minimum of 20 years for new construction, per 24 CFR Part 92.

Neighborhood revitalization and public improvements: A Citizen Advisory Council in a low-income target area identifies deteriorated sidewalks and inadequate street lighting as barriers to pedestrian safety. CDBG funds can support public infrastructure improvements in areas where at least 51 percent of residents qualify as low- or moderate-income under HUD's Low/Mod Area benefit category.

Small business assistance: CDBG economic development activities may include facade improvement grants or micro-enterprise loans targeting businesses with five or fewer employees where the owner meets income eligibility. This use of CDBG requires the city to document job creation or retention outcomes.

For related economic development programming outside the HUD-funded framework, see Raleigh Economic Development Office and Raleigh Small Business Resources.

Decision boundaries

Not every housing or neighborhood problem falls within community development's authority. The following structural distinctions govern what programs can and cannot address:

CDBG vs. General Fund programs: CDBG imposes a national objective requirement — every funded activity must either benefit low- and moderate-income persons, address slum and blight, or respond to an urgent need. Activities that serve the general population without documented LMI benefit are ineligible for CDBG regardless of their social value.

Community development vs. zoning authority: Community development funds cannot override zoning restrictions. A proposed affordable housing project must still comply with the city's raleigh-zoning-land-use regulations; funding approval does not constitute a zoning variance or special use permit.

Renter assistance limitations: CDBG and HOME can fund housing rehabilitation for landlords only when the assisted units are occupied by income-eligible tenants and affordability covenants are recorded. Neither program funds general rental assistance payments — that function is administered through the Raleigh Housing Authority and the federal Housing Choice Voucher program.

Geographic and ownership eligibility: Assistance through city-administered programs applies only to properties within Raleigh's incorporated city limits at the time of application. Properties annexed after a program cycle opens may or may not qualify under that cycle's targeting criteria. The /index of city services provides orientation across departments for residents unsure where a specific need is addressed.

Wake County overlap: Wake County administers its own CDBG program for unincorporated areas and smaller municipalities that do not qualify as HUD entitlement communities. A property located just outside the Raleigh city boundary may be eligible for Wake County programs but is outside the scope of the programs described here. For broader county-level context, see Wake County Government.

For neighborhood-level engagement mechanisms that interact with community development planning — including input into the Consolidated Plan process — see Raleigh Citizen Advisory Councils.

References

Read Next

Raleigh Affordable Housing Policy and City Programs ANA › United States Authority › North Carolina State Authority › Raleigh Metro Authority › Raleigh Affordable Housing Policy... Raleigh Office of Economic Development: Programs and Incentives This page covers the OED's structural definition, how its incentive mechanisms operate, the common scenarios in which... Raleigh City Resources for Small Business Owners This page maps the primary resources available through the City of Raleigh and its partner agencies, explains how those...