HUD Rural Capacity Building for Community Development and Affordable Housing (RCB) Program

The Rural Capacity Building for Community Development and Affordable Housing program (Rural Capacity Building or RCB), administered by the U.S. Department of Housing and Urban Development (HUD) is one of several federal programs that supports local housing and community development in rural areas. This In Focus describes the RCB program's structure and provides an overview of program funding.

Program Structure and Administration

HUD awards RCB grants on a competitive basis to rural community development intermediary organizations (primary grantees). The primary grantees then use the RCB funding over a four-year period to provide technical support and financial assistance to rural community development organizations, local governments, and tribal entities for capacity-building activities.

Eligible Primary Grantees

HUD restricts primary grantee eligibility to certain nonprofit intermediary organizations with 501(c)(3) tax-exempt status. Eligible organizations must apply independently, rather than as a consortium. HUD requires that organizations have a demonstrated record of accomplishment in relevant activities, within the previous decade. Additionally, these organizations must serve in at least seven of HUD's ten regions, illustrated in Figure 1.

Figure 1. HUD's Regions

Source: U.S. Department of Housing and Urban Development, HUD's Regions, https://www.hud.gov/localoffices/regions.

Grant Application Process

Application guidance for HUD's RCB program is outlined in the agency's Notices of Funding Availability (NOFAs), which provide explanations of available grant funding, procedures, and deadlines. HUD generally releases RCB NOFAs on an annual or bi-annual basis.

HUD rates applications that meet the threshold requirements on a 100-point scale. HUD assesses eligible applications based on five core factors. As an example, Table 1 provides an overview of the core rating factors and maximum point values outlined in the FY2021/FY2022 RCB NOFA. HUD will only consider applications from entities that meet the following requirements:

• 1. have no outstanding or insufficiently resolved civil rights issues;
• 2. planned activities comply with the Fair Housing Act (with certain exceptions for Indian tribes);
• 3. submit RCB applications in a timely manner, in accordance with the stated deadline; and
• 4. qualify as an eligible national nonprofit organization.

HUD may award preference points for applications that propose activities aligned with certain priorities of an administration. For instance, the FY2021/FY2022 RCB program NOFA announced that applicants could receive up to four preference points for applications including activities located in Promise Zones, projects carried out in partnership with Historically Black Colleges and Universities, or projects that support environment justice in historically underserved communities. Each preference category is worth up to two points. Typically, preference points are awarded exclusively to eligible applicants with core scores of 75 points or greater.

Eligible Beneficiaries

As mentioned above, the intermediaries (primary RCB grantees) use RCB funds to provide financial and technical assistance for eligible beneficiaries. Potential grantees are required to share the plans for their beneficiary selection process in their application proposal. HUD rates the beneficiary selection process plans as a component of the "Soundness of Approach" factor. Generally, RCB primary grantees can provide capacity-building support in the form of financial and technical assistance to five types of eligible beneficiaries:

• 1. rural housing development organizations;
• 2. community development corporations;
• 3. community housing development organizations;
• 4. local governments; and
• 5. Indian tribes.

In order to receive RCB support, beneficiaries must operate in an eligible rural area and serve rural constituencies. Under the RCB program, rural areas are defined as Census Bureau-recognized statistical geographic areas with fewer than 50,000 people. HUD has developed a web-based "Rural Beneficiary Mapping Tool" to aid primary grantees in confirming beneficiary eligibility.

Eligible Activities

The RCB program supports the following activities for rural community development organizations, local governments, and tribes:

• technical assistance including training and advice;
• financial assistance such as loans and grants; and
• other activities approved by HUD.

These activities—as carried out by primary grantees—typically support operational and administrative capacity needs of beneficiaries, related to organizational efforts such as affordable housing development and job creation.

Program Monitoring

HUD requires that primary RCB grantees submit semi-annual reports on project finances, implementation status, and outcomes. Grantees submit these reports through the Disaster Recovery Grant Reporting System, which tracks a range of appropriated funds administered by HUD.

RCB Appropriations

Congress provided $6 million in RCB funds for FY2023 (P.L. 117-328, Division L, Title II) under the Self-Help Homeownership Opportunity program account in the annual Transportation, Housing and Urban Development, and Related Agencies appropriations bills. The FY2023 amount is an increase of $1 million over annual amounts appropriated in FY2018 through FY2022. This account also funds the Section 4 Capacity Building for Community Development and Affordable Housing program and the Self-Help and Assisted Homeownership Opportunity Program.

RCB Grant Awards

On January 5, 2021, HUD announced a total of $10 million in RCB awards for five national nonprofit organizations to carry out program activities. These awards represented two years of appropriated funds (FY2019 and FY2020). Under the combined FY2019/FY2020 grant awards, HUD set the minimum grant amount at $1.25 million and the maximum at $3.25 million. When awarded on an annual basis, HUD typically sets the minimum and maximum awards at $1 million and $2.5 million, respectively.

Table 2 provides a breakdown of RCB grant awards of FY2019 and FY2020 funds.

Related CRS Products

CRS Report R47045, Section 4 Capacity Building for Community Development and Affordable Housing Program, by Joseph V. Jaroscak

CRS In Focus IF12038, Farm Bill Primer: Rural Development Title, by Lisa S. Benson