Lesson 1: CDBG, entitlement vs State, and the Texas path through TDA
Texas Government Code 487.351 · TxCDBG Project Implementation Manual · 14 practice questions
Content current as of September 22, 2026, per the 2026 TxCDBG Project Implementation Manual (effective September 1, 2026) and the current eCFR.
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Reading
Community Development Block Grant money reaches Texas communities by two
completely different roads, and knowing which road a given community is on
changes almost everything else in this course, including which manual
governs a project and which agency you actually answer to.
CDBG reaches Texas two ways: entitlement cities and counties get funds directly from HUD every year, while everyone else is reached through the state, where the Texas Department of Agriculture runs TxCDBG under Texas Government Code 487.351(a).
What CDBG is for
The program's stated purpose is to develop viable communities by providing
decent housing and a suitable living environment, and by expanding economic
opportunities, principally for persons of low and moderate income. This course groups the
work into four broad areas under that purpose: improving public facilities,
improving housing, expanding economic opportunities through job creation and
retention, and eliminating hazardous or emergency conditions. That grouping is
a teaching device, not a list written into the statute, which (at 42 USC
5301(c)) states the primary objective and then lists more detailed goals.
Every lesson in this course about eligible activities and national objectives
traces back to one of those four areas.
Entitlement communities
Larger cities and urban counties receive CDBG funds directly from HUD every
year, without going through a state agency. These are entitlement
communities. Houston and Harris County are the entitlement grantees closest
to GCHS's own service area, and they run their own Consolidated Plan,
Action Plan, and CAPER process, covered in an earlier lesson, entirely
in-house.
Non-entitlement communities and the Texas path
Everywhere smaller does not receive CDBG directly from HUD. Instead, HUD
allocates a block of CDBG funds to each state, and the state runs its own
competitive or formula program for the non-entitlement cities and counties
within it. In Texas, the agency that runs this program is the Texas
Department of Agriculture, not TDHCA, administering what is known as
the Texas Community Development Block Grant program, TxCDBG,
under the authority of Texas Government Code, Section
487.351(a), which directs the department to administer the state's
CDBG nonentitlement allocation under 24 CFR Part 570, Subpart I.
Eligibility for TxCDBG is defined by population, not by any other
characteristic of the community:
Non-entitlement cities under 50,000 in population.
Non-entitlement counties with a non-metropolitan population under
200,000.
A city or county that is not eligible for direct CDBG funding from HUD, and
that falls under these population figures, is exactly who TxCDBG exists for.
This is the majority of the geography GCHS actually works in. Most of the 13
Gulf Coast counties GCHS serves are TxCDBG territory, not entitlement
territory, which means the TxCDBG Project Implementation Manual, not HUD's
general CDBG regulations alone, is the operating rulebook for most GCHS-
adjacent projects, even though the federal regulations covered earlier in
this course remain the floor underneath everything TDA does.
Why the distinction matters beyond terminology
An entitlement grantee and a TxCDBG grantee both operate under the same
federal statute and the same core CFR requirements: the national objectives,
the eligible and ineligible activities, environmental review, labor
standards, and so on. What differs is who administers the program day to day,
what manual and forms actually govern the paperwork, and in some cases,
specific numeric limits that TDA sets on top of the federal floor. This
course has already flagged one example: the federal timeliness test at 24 CFR
570.902 is written in terms of an entitlement grant, and does not directly
apply, in that specific form, to a TxCDBG grantee. TDA sets its own
expenditure timing and administrative thresholds, and those live in the
Implementation Manual, not in the CFR section written for entitlement
communities.
The federal rules for the State program also sit in their own subpart. 24 CFR
570.480 says the other subparts of Part 570 do not apply to the State CDBG
program unless expressly provided. So when a later lesson cites an entitlement
section such as 570.208 (national objectives) or 570.200(a)(3) (the 70 percent
test), TDA's counterparts are 570.483 and 570.484 in Subpart I, which parallel
them closely but not word for word.
TDA's manual structure
The TxCDBG Project Implementation Manual is organized into numbered
chapters covering administration and reporting, financial management,
environmental review, contract special conditions, procurement procedures,
acquisition, Davis-Bacon labor standards, force account labor, civil rights
requirements, grant agreement amendments, grant agreement closeout, monitor
review, and audit requirements, plus lettered sections covering the
community development program overview, planning projects, housing
rehabilitation, and self-help centers (the manual currently lists its Texas
Capital Fund section as reserved). A grantee administering a TxCDBG contract works out of this manual
day to day, using the federal regulations as the underlying authority the
manual itself has to comply with.
What this means in practice for GCHS
Before assuming a federal rule from an earlier lesson applies unchanged to
a specific GCHS-adjacent project, check whether the jurisdiction involved is
an entitlement community or a TxCDBG community, because that answer decides
which manual, which forms, and in some cases which numeric threshold
actually governs. For the large majority of GCHS's Gulf Coast service area,
the answer will be TxCDBG, which means the Implementation Manual is the
document to have open, and TDA, not a HUD field office, is the agency a
grantee is actually reporting to and being monitored by day to day.
Practice questions
1. What are the four broad areas of CDBG work that this lesson groups under the program's purpose?
Improving public facilities, improving housing, expanding economic opportunities through job creation and retention, and eliminating hazardous or emergency conditions
Building new government offices, funding political campaigns, purchasing equipment, and paying general operating expenses
Funding only single-family new construction, multifamily new construction, commercial construction, and public parks
Meeting the 70 percent primary objective, the national objectives, the two spending caps, and the timeliness test
Answer: a. The lesson groups CDBG work into four broad areas: improving public facilities, improving housing, expanding economic opportunities through job creation and retention, and eliminating hazardous or emergency conditions, all in service of the program's overall purpose of decent housing, a suitable living environment, and expanded opportunity for low and moderate income persons.
2. What distinguishes an entitlement community from a non-entitlement community under CDBG?
Entitlement communities are always small rural places funded by formula, while non-entitlement communities are always large urban centers that apply directly to HUD each year
Non-entitlement communities always receive larger annual awards than entitlement communities, because the state adds its own revenue
An entitlement community receives CDBG funds directly from HUD every year, while a non-entitlement community does not and instead accesses CDBG funds through its state
There is no meaningful difference, because the state program simply passes every award back through HUD unchanged to the city
Answer: c. Entitlement communities receive CDBG funds directly from HUD annually. Non-entitlement communities do not receive funds directly from HUD and instead access CDBG funding through a state-run program.
3. Which state agency administers the TxCDBG program for non-entitlement Texas communities?
The Texas Department of Housing and Community Affairs, TDHCA
The Texas Department of Agriculture, TDA
The Texas General Land Office
HUD's Fort Worth field office directly
Answer: b. The Texas Department of Agriculture administers the TxCDBG program for non-entitlement communities, not TDHCA, under the authority of Texas Government Code, Section 487.351(a).
4. What is the population threshold for a non-entitlement city to be eligible for TxCDBG?
Under 200,000
Under 10,000
Under 100,000
Under 50,000
Answer: d. A non-entitlement city must have a population under 50,000 to be TxCDBG eligible.
5. What is the population threshold for a non-entitlement county to be eligible for TxCDBG, and what specific population figure does it apply to?
A non-metropolitan population under 200,000
A total county population under 50,000, counting all residents
A non-metropolitan population under 500,000
Counties are never eligible for TxCDBG, only cities
Answer: a. A non-entitlement county is TxCDBG eligible if its non-metropolitan population, not its total population, is under 200,000.
6. Under what legal authority does TDA administer the TxCDBG program?
24 CFR 570.902, the entitlement timeliness rule
Texas Government Code, Section 487.351(a)
24 CFR Part 58, the environmental review regulations
2 CFR 200.320, the federal procurement methods section
Answer: b. TDA administers TxCDBG under Texas Government Code, Section 487.351(a), a state statute that directs it to administer the state's CDBG nonentitlement allocation under 24 CFR Part 570, Subpart I.
7. The federal timeliness test at 24 CFR 570.902 is written in terms of an entitlement grant. What does this lesson say about applying that test directly to a TxCDBG grantee?
It applies identically, since all CDBG grantees use the same entitlement grant formula and the same 1.5 ratio in every state and in every program year
It never applies to any Texas grantee under any circumstance, including entitlement cities such as Houston
It does not directly apply in that form to a TxCDBG grantee, since TDA sets its own expenditure timing rules in the Implementation Manual
It applies only to counties, never to cities, regardless of entitlement status or the size of the grant
Answer: c. The 1.5 ratio timeliness test at 570.902 is written for entitlement grants and does not directly apply in that form to a TxCDBG grantee. TDA sets its own expenditure timing rules for TxCDBG grantees in the Implementation Manual.
8. Do entitlement grantees and TxCDBG grantees operate under different federal statutes and different core CFR national objective requirements?
Yes, entirely different federal statutes apply to each
No, both operate under the same federal statute and the same core CFR requirements; what differs is administration, forms, and some TDA-specific numeric thresholds layered on top
Yes, only entitlement grantees are subject to national objective requirements
No, but only because TDA has formally adopted HUD's regulations word for word with no additions
Answer: b. Both types of grantees operate under the same federal statute and the same core CFR requirements, including the national objectives. What differs is who administers the program, which manual and forms govern the paperwork, and specific TDA-set numeric thresholds on top of the federal floor.
9. Which document governs the day-to-day paperwork and administrative process for a TxCDBG grantee?
HUD's Consolidated Plan regulations at 24 CFR Part 91 exclusively
The Uniform Relocation Assistance Act handbook
Whatever internal policy the grantee itself chooses to write, with no state document involved
The TxCDBG Project Implementation Manual
Answer: d. The TxCDBG Project Implementation Manual is the document a TxCDBG grantee works out of day to day, built on top of the underlying federal regulations.
10. For most of the 13 Gulf Coast counties GCHS serves, which path is more likely to govern a CDBG-funded project: entitlement or TxCDBG?
TxCDBG, since most of GCHS's service area falls under the non-entitlement population thresholds
Entitlement, since Houston and Harris County together represent all 13 counties of GCHS's service area
Neither; GCHS's service area receives its CDBG funds through a separate federal program run by HUD field offices
It cannot be determined without first measuring each county's total land area and highway mileage
Answer: a. Most of the 13 Gulf Coast counties GCHS serves are TxCDBG territory rather than entitlement territory, meaning the TxCDBG Project Implementation Manual is the operating rulebook for most GCHS-adjacent projects, with Houston and Harris County being the closest entitlement grantees rather than the norm across the service area.
11. What underlying authority does the TxCDBG Project Implementation Manual itself have to comply with, according to this lesson?
Texas Government Code 487.351(a) alone, since a state statute replaces the federal regulations for any grant TDA administers
TDHCA's own program regulations, which TDA adopts word for word for its community development awards
The federal CDBG regulations covered earlier in this course, which remain the floor underneath everything TDA does
HUD's Consolidated Plan and Action Plan process exclusively, which TDA runs for each grantee
Answer: c. A grantee works out of the Implementation Manual day to day, using the federal regulations as the underlying authority the manual itself has to comply with; the federal regulations remain the floor underneath everything TDA does.
12. Besides its numbered chapters on administration, financial management, and environmental review, what do the TxCDBG Project Implementation Manual's lettered sections cover?
Fair housing complaint procedures and the grantee's annual fair housing certification forms
Section 3 hiring preferences and the summary report forms that go with them
URA replacement housing payments and relocation claim forms for displaced tenants
The program overview, planning projects, housing rehabilitation, and self-help centers
Answer: d. The manual's lettered sections cover the community development program overview, planning projects, housing rehabilitation, and self-help centers (its Texas Capital Fund section is currently reserved), separate from its numbered chapters on administration, financial management, environmental review, and the like.
13. Which entitlement grantees does this lesson identify as closest to GCHS's own service area?
Houston and Harris County
Harris County and Galveston County
The City of Beaumont and Jefferson County
TDHCA and the General Land Office
Answer: a. Houston and Harris County are the entitlement grantees closest to GCHS's own service area, running their own Consolidated Plan, Action Plan, and CAPER process in-house.
14. What is the CDBG program's stated overall purpose, as distinct from the four broad areas of work that sit under it?
To maximize the number of activities completed within the timeliness test
To develop viable communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income
To fund entitlement communities exclusively, with TxCDBG as a secondary program
To ensure every dollar spent individually meets a 51 percent low and moderate income benefit
Answer: b. The program's stated purpose is to develop viable communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income. The four broad areas of work sit under that purpose.
Glossary
Entitlement community
A city or urban county that receives CDBG funds directly from HUD every year, without going through a state agency.
Non-entitlement community
A city or county not eligible for direct CDBG funding from HUD; it accesses CDBG funds through its state's program instead.
TxCDBG
The Texas Community Development Block Grant program, administered by TDA for non-entitlement Texas cities and counties under Texas Government Code 487.351(a).
Texas Department of Agriculture (TDA)
The state agency that administers TxCDBG for non-entitlement communities; not TDHCA.
TxCDBG Project Implementation Manual
TDA's governing document for day-to-day TxCDBG administration, built on top of the underlying federal CDBG regulations.
Consolidated Plan, Action Plan, CAPER
The planning and reporting cycle an entitlement grantee runs in-house; not required of TxCDBG grantees in the same form.
Timeliness test
The federal expenditure-pace requirement at 24 CFR 570.902, written for entitlement grants; TDA sets its own expenditure timing for TxCDBG grantees instead.