Subject
title
Approval and Submission to Montgomery County of the City of Rockville Funding Application for Program FY 2027/Year 52 Community Development Block Grant
end
Department
Housing and Community Development
Recommendation
Staff recommends that Mayor and Council approve the proposed funding allocations and authorize the City Manager to transmit the grant application and enter into an agreement with Montgomery County for Program Year 52/FY 2027 of the Community Development Block Grant (CDBG) program.
Discussion
Each year, the City of Rockville receives federal Community Development Block Grant (CDBG) funds through a cooperative agreement with Montgomery County. CDBG funds must be expended for housing and community development capital projects that primarily benefit low- and moderate-income persons or neighborhoods. Rockville is projected to receive $263,000 in CDBG funding for federal Program Year 52/FY 2027. The city has focused much of its CDBG allocation on housing rehabilitation.
Chart 1. CDBG Allocation by Use - FY 2020 to FY 2026
Source: City of Rockville DHCD, 2025
City of Rockville CDBG Programs
Single-Family/Owner-Occupied Rehabilitation
The city’s single-family/owner-occupied rehabilitation program has assisted many low-income homeowners in addressing repair issues and code deficiencies. Typical repairs include roof replacement, plumbing and electrical upgrades, furnace replacement, and kitchen and bathroom repairs. The program staff prioritizes code deficiencies to address the most serious problems. The per-unit home repair cost has averaged $25,000 and typically assists five to seven households annually.
For eligible homeowners whose household incomes are at 50% of the Area Median Income (AMI) or below, the program provides funding for repairs through a zero-interest and forgivable CDBG loan. The loan is forgiven over a five-year period by reducing the amount owed by 20% annually if the homeowner continues to own the home for five years following the completion of the repair work.
The city’s CDBG program also permits households whose incomes are between 50% and 80% of the AMI to receive a low-interest loan (3%/annum) for their home repairs, without a provision for forgiving the loan. No households have taken advantage of this latter part of the program.
A lien is recorded against the property for the CDBG loan amount, which is released after five years. Table 1 shows the income limits of the program as of May 2024:
Table 1. CDBG Income Limits, May 2024
|
Family Size |
Low (0-50% AMI) |
Moderate (50-80% AMI) |
|
1 |
$54,150 |
$68,500 |
|
2 |
$61,900 |
$78,250 |
|
3 |
$69,650 |
$88,050 |
|
4 |
$77,350 |
$97,800 |
|
5 |
$83,550 |
$105,650 |
|
6 |
$89,750 |
$113,450 |
|
7 |
$95,950 |
$121,300 |
|
8 |
$102,150 |
$129,100 |
Source: U.S. Department of Housing and Urban Development, May 2024
In addition to meeting income limits, homeowners must also meet the following criteria:
• The home must be owner-occupied and be the owner’s sole and principal residence.
• The owner must not owe more on the home than the home’s assessed value.
• The homeowner’s assets cannot exceed $150,000 (excluding the value of the subject property).
• The applicant must be current on personal and property taxes and homeowner insurance.
• Properties with reverse mortgages, in which a homeowner can access cash in exchange for relinquishing equity in their home, are reviewed on a case-by-case basis.
Multifamily/Shared Home Rehabilitation
The multifamily/shared housing component of the program provides funding to local nonprofit housing providers. Over the past five years, the city has typically assisted two (2) to four (4) housing providers serving low-income households, including public housing residents or those in permanent and supportive housing programs. Projects undertaken by these grantees have ranged from major kitchen and bathroom repairs to installation of fire and carbon monoxide detectors.
Program Year 52/FY 2027 Application Process
The application period for external agencies began on July 4, 2025. Funding applications were originally due to the City of Rockville on October 1, 2025. The application period was extended from October 2 to October 16 to encourage additional applications.
The city received four (4) grant applications for projects totaling $336,669 in requested funding. On November 21, 2025, Rockville Housing Enterprises (RHE) formally withdrew the organization’s application for FY27. The grant applications are summarized in the table below.
Table 2. Program Year 52/FY 2027 Grant Application Summary
|
Applicant |
Scope |
|
Community Reach of Montgomery County (CRM) |
This funding will be used for needed renovations at Jefferson and Rockland Houses, permanent supportive residences for formerly homeless men and women operated by CRM. Rockland House requires a roof replacement due to age and wear. There is evidence that during storms, moisture is leaking through into the crawlspace under Rockland House's roof. Contractors have inspected the roof and confirmed the need for replacement. Additionally, the gutters are outdated and ineffective and can be easily replaced as part of the roof project. The exterior siding, which has not been updated since CRM acquired the property over a decade ago, is showing signs of wear and exposure. New siding is essential to protect the home from the elements and restore its appearance, contributing to a sense of pride and dignity for residents. It will also make the house more energy efficient and reduce utility expenses. Contractors confirmed that the gutters at Jefferson House are dented, which could lead to water drainage issues and long-term structural damage if left unaddressed. |
|
Montgomery Housing Partnership (MHP) |
MHP requests funding for exterior rehabilitation and site improvements at Bethany House, a 250-unit affordable apartment community for low- and moderate-income seniors. This project will complete critical exterior repairs and site upgrades that enhance safety, accessibility, and livability while advancing the city’s goals for neighborhood revitalization. CDBG-funded activities will include replacement of aging exterior lighting, landscaping and drainage improvements, and installation of new signage, benches, and seating areas. These capital upgrades will address deferred maintenance and reduce long-term maintenance costs, activate the outdoor space by creating amenities, and create a more dignified, welcoming environment for residents and visitors to enjoy. MHP will leverage internal reserves and capital funds to complement CDBG resources and ensure timely completion within the grant term. |
|
Cornerstone Montgomery Inc. |
Cornerstone Montgomery seeks support to maintain a critical facility, the Taft Building, that houses essential behavioral health services for more than 3,000 individuals annually across Montgomery, Calvert, Charles, and St. Mary’s counties. While Cornerstone Montgomery owns the Taft Building, it rents the first floor to Interfaith Works who uses the space to operate the Interfaith Works Women’s Center at Taft Court (IWWC-Taft). Cornerstone Montgomery requests funding to remove and replace aging, damaged, and deteriorating flooring and windows in the Taft building to include the IWWC-Taft shelter. |
|
Rockville Housing Enterprises (RHE) [WITHDRAWN] |
RHE proposes to replace old roofs on seventeen multi-family public housing units. The uniqueness of this project is that a majority of RHE's public housing program participants and potential applicants meet the extremely low (30% AMI) and very low (50% AMI) income limits as deemed by HUD. |
Funding Recommendation
As in previous years, a cross-departmental grant review committee was assembled to review the applications and to formulate a recommendation to the Mayor and Council for allocation of the CDBG funding. The committee was comprised of representatives from departments familiar with community needs and other city grants.
Applications were evaluated on the project’s impact to low- and moderate-income households; the need for the activity; whether the proposed solution, scope of work, and budget were reasonable and achievable within the grant year; whether the applicant had secured other funding to leverage the amount requested; the applicant’s organizational capacity and experience; and the overall quality of the application. Below is a table summarizing the score of each proposal, assessed by the committee.
Table 3. Applicant Average Score
|
Applicant |
Avg. Score |
|
Community Reach of Montgomery County |
77 |
|
Montgomery Housing Partnership |
77 |
|
Cornerstone Montgomery Inc. |
52 |
|
Rockville Housing Enterprises |
61 |
Of the four (4) applicants, the grant review committee unanimously voted to fund two (2) of the four (4) of the applicants. With both organizations that were not recommended for funding, the committee reached out for additional information, but found the responses did not mitigate concerns. Below is a table summarizing the recommended allocation.
Table 4. Program Year 52/ FY 2027 Funding Allocation Recommendation
|
Applicant |
CDBG Funds Requested |
Recommended Allocation |
|
Community Reach of Montgomery County |
$20,326 |
$20,326 |
|
Montgomery Housing Partnership |
$75,000 |
$117,674 |
|
Cornerstone Montgomery Inc. |
$170,856 |
$0 |
|
Rockville Housing Enterprises |
$270,825 [WITHDRAWN] |
$0 |
|
City of Rockville Single-Family Home Repair Program |
N/A |
$120,000 |
|
TOTAL |
$537,007 |
$258,000 |
|
|
Community Reach of Montgomery County
The panel chose to fully fund Community Reach’s CDBG request because, while past performance has been mixed, the proposed project is relatively simple in scope and funding level. Additionally, current staff have demonstrated progress in understanding and meeting CDBG requirements, indicating improved capacity to successfully implement the project.
Montgomery Housing Partnership
The panel chose to more than fully fund Montgomery Housing Partnership’s CDBG request to support safety enhancements in the living conditions of Bethany House. The exterior improvement projects are essential to promoting safety and enhancing the environment for residents. MHP has a strong track record in managing construction projects and effectively leveraging multiple funding sources, giving the panel confidence in their capacity to complete the project successfully and within compliance requirements.
Cornerstone Montgomery Inc
The panel did not recommend funding Cornerstone Montgomery Inc. due to several concerns regarding project need and scope, as well as mitigating concerns from past performance. It remains unclear where the proposed floor replacements will occur-whether in office or residential areas-and the overall urgency of the window replacement component was not well demonstrated. Additionally, the organization lacked institutional memory of previously receiving CDBG funds. In a previous grant year, the organization’s project was not completed within the required program year timeline and failed to adhere to certain program requirements. These factors raised concerns about project readiness, management capacity, and the likelihood of timely completion. Cornerstone is welcome to apply for funds again in FY2028/Grant Year 53.
Rockville Housing Enterprises
While RHE is a long-standing partner with the city, the panel did not recommend funding the organization’s request this year due to ongoing concerns with project management, performance, compliance, and documentation. Records related to previous roof replacement projects funded with CDBG dollars were unclear and lacked sufficient detail, reflecting limited knowledge of program requirements. Additionally, discrepancies were noted between the number of roofs reported as completed and the number budgeted for, raising concerns about project accuracy and accountability.
On November 21, 2025, RHE withdrew its application for FY27 funds, noting that due to staff turnover and leadership changes, the best use of their resources is to focus on core programs and organizational capacity building. However, RHE are still slated to receive $94,454 in CDBG FY2026/Grant Year 51, and staff are currently working with them on their project for FY2025/Grant Year 50. RHE is welcome to apply for funds again in FY2028/Grant Year 53.
Single-Family/Owner-Occupied Rehabilitation Program
The panel recommended allocating $120,000 to the city’s single-family/owner-occupied rehabilitation program. DHCD staff will continue to work with the Code Enforcement and Community Engagement team to identify homeowners in need to home repairs and/or to address any code violations.
Impact Statements
Equity
Staff anticipates the action would positively impact racial equity and social justice in the city due to the program’s targeting of low- and moderate-income households. In the City of Rockville, households with such incomes tend to disproportionately be Black or African American and Hispanic or Latino. With the review committee’s recommendation for multi-family projects, funds would primarily benefit formerly homeless residents at Jefferson and Rockland Houses and low-income seniors at Bethany House.
Environment
The repairs provided by the CDBG program are intended to improve the health and safety of residents, including environmental health. When completing repairs, as much as possible, projects are completed in ways that enhance energy efficiency and environmental sustainability.
Economy
The action item is expected to have a minimally positive impact on local health and wellbeing for two reasons. First, the single-family rehabilitation program will relieve economic pressure from low-income homeowners who struggle to afford to make necessary repairs to their homes. Instead, they will be able to use funds for other needs. Second, the program supports local contractors who complete the single- and multi-family projects.
Mayor and Council History
A public hearing on community needs and priorities took place at the September 8, 2025 Mayor and Council meeting. No comments were received from the public.
This agenda item was previously on the November 17, 2025 consent agenda, but was pulled and moved to December 8, 2025 as an action item.
Public Notification and Engagement
The funding application and public hearing announcement were emailed to civic associations, homeowners associations, and community organizations on June 30, 2025. Public notice announcing the public hearings was published in the Washington Post on August 28, 2025 and September 4, 2025. As requested by the Mayor and Council in previous years, the city hosted a Housing Providers Forums on August 21, 2025 and September 16, 2025, where housing providers were notified of the upcoming funding cycle and provided with information on application submission process and requirements.
Fiscal Impact
The CDBG funds that are proposed to be allocated will come from the federal government via a pass-through agreement with Montgomery County.
The city accounts for all CDBG activity in a separate CDBG fund. The FY 2026 adopted budget appropriated $263,000 and the city anticipates the same amount for Year 52/FY 2027. The city must spend funds on the specified programs and request reimbursement from the county on presentation of receipts. All CDBG spending is subject to the provisions of OMB A-133 (to be superseded by guidance in the omni-circular) or single audit, as required by the federal government.
Next Steps
The Program Year 52/FY 2027 grant application is due to Montgomery County in December.