AGENDA ITEM EXECUTIVE SUMMARY
ITEM TITLE*
title
Adopt the Recommended 2025-26 CDBG Annual Action Plan
presenter
RESPONSIBLE STAFF, TITLE, DEPARTMENT*
Sarah Osmer Viñas, Director, Affordable Housing and Community Connections (AHCC) Department
Emily Holt, Affordable Housing Manager, AHCC Department
Melissa Peters, Funding Programs Coordinator, AHCC Department
STAFF RECOMMENDATION*
Staff recommends that the Council adopt the 2025-26 CDBG Annual Action Plan
body
ACTION/DECISION POINTS*
1. Adopt the attached resolution approving the recommended 2025-2026 Community Development Block Grant (CDBG) Annual Action Plan for use of $689,588.
2. Authorize the Town Manager to submit the Plan to the U.S. Department of Housing and Urban Development (HUD) as the first annual update to the 2025-2029 Consolidated Plan.
3. Enact the attached project ordinance to establish the CDBG budget for the 2025-2026 program.
4. Enact the attached project ordinances to amend the CDBG budgets for the 2024-2025, 2023-2024, and 2020-2021 programs.
LEGISLATIVE CONTEXT*
The Town of Chapel Hill receives an annual allocation of Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD) to address community development and affordable housing needs.
The Annual Action Plan describes how the Town will use CDBG funding during the next program year. Council must approve the Annual Action Plan before they can be submitted to HUD for approval. The deadline for submission of the Plan to HUD is July 11, 2025.
BACKGROUND AND CONTEXT*
The Town held the first public forum on assessing community needs for the 2025-2026 CDBG Annual Action Plan on November 13, 2024. Since then, the Town released a Request for Proposals for anticipated 2025-26 funding needs and continued to evaluate the community development and affordable housing funding needs of the Town. The Town received and reviewed 12 applications that were eligible for CDBG funding and are recommending seven for funding, in addition to two Town programs. The Town held a second public forum on April 9, 2025 and a 30-day public comment period between April 1 and April 30, 2025 to receive any public comments about the draft 2025-26 CDBG Annual Action Plan. The Town did not receive any comments.
The final recommended 2025-26 CDBG Annual Action Plan is $29,412 lower than what was proposed in the initial public forum and public comment period. The official HUD CDBG allocation is $22,143 lower than expected and the remaining reduction is required to reconcile accounts for past grant years. A summary of the final recommended funding plan, which highlights changes from the preliminary funding plan, is included in the attached Summary of 2025-26 CDBG Funding Requests and Funding Recommendation.
FINANCIAL IMPACT
This 2025-26 Annual Action Plan includes a total of $689,588 in CDBG funding. The Town of Chapel Hill is a CDBG Entitlement Community and receives an annual CDBG allocation from HUD. This year’s grant allocation is $415,188.
In addition to the annual grant allocation, the 2025-26 CDBG Annual Action Plan also includes the following funding:
• $21,270 in program income from the payoff of a loan made in 2008 to support development of the Dobbins Hill Low-Income Housing Tax Credit community.
• $253,130 in reallocated funding from previous program years.
The Town allocates a portion of its CDBG funding to internal programs and administrative costs and a portion to local partners that implement approved programs and services through performance agreements.
Community Impact
CDBG funding is intended to develop viable urban communities primarily for low- and moderate-income people by providing decent housing, suitable living environments, and economic opportunities. Except for funding set aside to support program administration, the Town intends to allocate 100% of program funds to benefit low- and moderate-income individuals and households in Chapel Hill.
COMMUNITY ENGAGEMENT
The Town opened a 30-day public comment period on the draft 2025-26 CDBG Annual Action Plan on April 1, 2025. The public comment period closed on April 30, 2025. In addition, the Town held public forums on the housing and community development needs assessment on November 13, 2024 and on the draft 2025-26 CDBG Annual Action Plan on April 9, 2025.
ATTACHMENTS
Resolution Approving the 2025-26 CDBG Annual Action Plan
Project Ordinance Establishing the 2025-2026 CDBG Budget
Project Ordinance Amending the 2024-2025 CDBG Budget
Project Ordinance Amending the 2023-2024 CDBG Budget
Project Ordinance Amending the 2020-2021 CDBG Budget
Summary of 2025-26 CDBG Funding Requests and Funding Recommendation <https://www.townofchapelhill.org/home/showpublisheddocument/57244/638846298586401559>2025-26 CDBG Annual Action Plan <https://www.townofchapelhill.org/home/showpublisheddocument/57242/638846297583617368>
Town of Chapel Hill CDBG Quick Guide <https://www.townofchapelhill.org/home/showpublisheddocument/55671/638472260022070000>
A RESOLUTION APPROVING THE 2025-26 COMMUNITY DEVELOPMENT BLOCK GRANT ANNUAL ACTION PLAN (2025-06-11/R-6)
WHEREAS, the Council of the Town of Chapel Hill used multiple methods to receive public input on use of 2025-2026 Community Development Block Grant funds; and
WHEREAS, the U.S. Department of Housing and Urban Development has notified the Town of the 2025-2026 Community Development Block Grant allocation of $415,188; and
WHEREAS, the Town received $21,270 in program income from the repayment of an affordable housing loan; and
WHEREAS, the Town identified $253,130 in prior years’ CDBG Grant funds to be reallocated this program year.
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that based on the Town’s available funding of $689,588 of 2025-2026 Community Development Block Grant funds, the Council approves the following 2025-2026 Community Development Block Grant Program:
2025-2026 Community Development Block Grant Annual Action Plan
|
Recommendation |
Affordable Housing |
|
Town’s Transitional Housing Program Repairs |
$41,627 |
HOPE Renovations Rehab for Older Homeowners |
$100,000 |
Habitat Comprehensive Repairs |
$166,140 |
Preserving Home (formerly Rebuilding Together) Home Repairs |
$151,200 |
EmPOWERment McMasters and Knolls Rehabilitation |
$47,861 |
Economic Development |
|
Transplanting Traditions Community Farm |
$30,000 |
Public Services |
|
Town’s Summer Youth Employment Program |
$18,853 |
Refugee Community Partnership Case Management |
$25,200 |
Inter-Faith Council Homeless Case Management |
$21,415 |
Administration |
$87,292 |
Total |
689,588 |
BE IT FURTHER RESOLVED that the Council authorizes the Manager to include this 2025-2026 Annual Action Plan in the 2025-2029 Consolidated Plan, for submission to the U.S. Department of Housing and Urban Development.
This the 11th day of June, 2025.
AN ORDINANCE TO ESTABLISH THE 2025-26 COMMUNITY DEVELOPMENT ENTITLEMENT GRANT PROJECT ORDINANCE (2025-06-11/O-4)
“SECTION I
The projects authorized are the Community Development projects as approved by the Council on April 9, 2025. Funds are as contained in the Funding Approval and Grant Agreement between the Town and the U.S. Department of Housing and Urban Development (HUD). The projects are known more familiarly as the 2025 Entitlement Community Development Block Grant. The grant activities include eligible affordable housing, public services, and economic development for low- and moderate-income residents, and administration costs for the program.
SECTION II
The Manager of the Town of Chapel Hill is hereby directed to proceed with the grant project within the terms of the grant document(s), the rules and regulations of the U.S. Department of Housing and Urban Development, and the budget contained herein.
SECTION III
The following revenues are anticipated to be available to complete the project:

SECTION IV
Amounts appropriated for projects are as follows:

SECTION V
The Director of Business Management is hereby directed to maintain within the Grant Project Fund sufficient specific detailed accounting records to provide the accounting to the U.S. Department of Housing and Urban Development as required by the grant agreement(s) and Federal and State regulations.
SECTION VI
The Manager is directed to report annually on the financial status of the project in an informational section to be included in the Annual Budget and shall keep the Council informed of any unusual occurrences.
SECTION VII
Copies of this project ordinance shall be entered into the minutes of the Council and copies shall be filed within five days of adoption with the Manager, Business Management Director and Town Clerk.”
This the 11th day of June, 2025.
AN ORDINANCE TO AMEND THE 2024-25 COMMUNITY DEVELOPMENT ENTITLEMENT GRANT PROJECT ORDINANCE (2025-06-11/O-5)
BE IT ORDAINED by the Council of the Town of Chapel Hill that pursuant to Section 13.2 of Chapter 159 of the General Statutes of North Carolina, the following grant project is hereby amended as follows:
“SECTION I
The projects authorized are the Community Development projects as approved by the Council on April 24, 2024. Funds are as contained in the Funding Approval and Grant Agreement between the Town and the U.S. Department of Housing and Urban Development (HUD). The projects are known more familiarly as the 2024 Entitlement Community Development Block Grant. The grant activities include eligible affordable housing, public services, and economic development for low- and moderate-income residents, and administration costs for the program.
SECTION II
The Manager of the Town of Chapel Hill is hereby directed to proceed with the grant project within the terms of the grant document(s), the rules and regulations of the U.S. Department of Housing and Urban Development, and the budget contained herein.
SECTION III
The following revenues are anticipated to be available to complete the project:

SECTION IV
Amounts appropriated for projects are as follows:

SECTION V
The Director of Business Management is hereby directed to maintain within the Grant Project Fund sufficient specific detailed accounting records to provide the accounting to the U.S. Department of Housing and Urban Development as required by the grant agreement(s) and Federal and State regulations.
SECTION VI
The Manager is directed to report annually on the financial status of the project in an informational section to be included in the Annual Budget and shall keep the Council informed of any unusual occurrences.
SECTION VII
Copies of this project ordinance shall be entered into the minutes of the Council and copies shall be filed within five days of adoption with the Manager, Business Management Director and Town Clerk.”
This the 11th day of June, 2025.
AN ORDINANCE TO AMEND THE 2023-24 COMMUNITY DEVELOPMENT ENTITLEMENT GRANT PROJECT ORDINANCE (2025-06-11/O-6)
BE IT ORDAINED by the Council of the Town of Chapel Hill that pursuant to Section 13.2 of Chapter 159 of the General Statutes of North Carolina, the following grant project is hereby amended as follows:
“SECTION I
The projects authorized are the Community Development projects as approved by the Council on April 7, 2023. Funds are as contained in the Funding Approval and Grant Agreement between the Town and the U.S. Department of Housing and Urban Development (HUD). The projects are known more familiarly as the 2023 Entitlement Community Development Block Grant. The grant activities include eligible affordable housing, public services, and economic development for low- and moderate-income residents, and administration costs for the program.
SECTION II
The Manager of the Town of Chapel Hill is hereby directed to proceed with the grant project within the terms of the grant document(s), the rules and regulations of the U.S. Department of Housing and Urban Development, and the budget contained herein.
SECTION III
The following revenues are anticipated to be available to complete the project:

SECTION IV
Amounts appropriated for projects are as follows:

SECTION V
The Director of Business Management is hereby directed to maintain within the Grant Project Fund sufficient specific detailed accounting records to provide the accounting to the U.S. Department of Housing and Urban Development as required by the grant agreement(s) and Federal and State regulations.
SECTION VI
The Manager is directed to report annually on the financial status of the project in an informational section to be included in the Annual Budget and shall keep the Council informed of any unusual occurrences.
SECTION VII
Copies of this project ordinance shall be entered into the minutes of the Council and copies shall be filed within five days of adoption with the Manager, Business Management Director and Town Clerk.”
This the 11th day of June, 2025.
AN ORDINANCE TO AMEND THE 2020-2021 COMMUNITY DEVELOPMENT ENTITLEMENT GRANT PROJECT ORDINANCE (2025-06-11/O-7)
BE IT ORDAINED by the Council of the Town of Chapel Hill that pursuant to Section 13.2 of Chapter 159 of the General Statutes of North Carolina, the following grant project is hereby amended to read as follows:
“SECTION I
The projects authorized are the Community Development projects as approved by the Council on April 29, 2020. Funds are as contained in the Funding Approval and Grant Agreement between the Town and the U.S. Department of Housing and Urban Development (HUD). The projects are known more familiarly as the 2020 Entitlement Community Development Block Grant. The grant activities include renovation of public housing, homebuyer assistance programs, and community services for low- and moderate-income residents, and administration costs for the program.
SECTION II
The Manager of the Town of Chapel Hill is hereby directed to proceed with the grant project within the terms of the grant document(s), the rules and regulations of the U.S. Department of Housing and Urban Development, and the budget contained herein.
SECTION III
The following revenues are anticipated to be available to complete the project:

SECTION IV
Amounts appropriated for projects are as follows:

SECTION V
The Director of Business Management is hereby directed to maintain within the Grant Project Fund sufficient specific detailed accounting records to provide the accounting to the U.S. Department of Housing and Urban Development as required by the grant agreement(s) and Federal and State regulations.
SECTION VI
The Manager is directed to report annually on the financial status of the project in an informational section to be included in the Annual Budget and shall keep the Council informed of any unusual occurrences.
SECTION VII
Copies of this amended projects ordinance shall be entered into the minutes of the Council and copies shall be filed within five days of adoption with the Manager, Business Management Director and Town Clerk.”
This the 11th day of June, 2025.
end