Notice on Community Development Block Grant Disaster Recovery (CDBG-DR) Formula
Office of Policy Development and Research / Office of Disaster Recovery
How HUD will calculate unmet housing, economic-revitalization and infrastructure need after a catastrophic disaster — and therefore how much disaster-recovery money each state, city, county and tribe receives. HUD is asking whether to add a "destroyed" damage category, stop matching to SBA disaster-loan data, set economic-revitalization and infrastructure need as flat percentages of housing need, and how to define the "catastrophic" standard the Act now requires.
Why it matters: Section 504 of the Act permanently authorizes CDBG-DR and adds a new section 124 to the Housing and Community Development Act of 1974. New HCDA §124(a)(4) is what forced this notice: HUD had 30 days from enactment to publish the current formula methodology and solicit comment on five named topics. Whatever HUD hears now shapes the proposed rule due January 11, 2027 — which is the version that becomes binding.
Sections it touches: Sec. 504
Other channels this notice accepts
- Email: Disaster_Recovery@hud.gov, with the docket number and "RFI for HUD CDBG-DR Formula" in the subject line. HUD treats email as an equally valid method for this notice.
- Mail: Regulations Division, Office of General Counsel, U.S. Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500.
The 13 questions the agency asked
- Question 1. Are there alternative methods for formula allocation HUD should consider within a similar total amount of funding?
- Question 1a. Housing need multipliers — should HUD add a separate "destroyed" damage category, stop matching to SBA disaster-loan data in favor of historic multipliers by disaster type adjusted with private-sector construction cost data, define "reasonable costs to rebuild" (including whether local regulations are causing unreasonably higher rebuild costs and whether a locality has acted consistently with HUD's State and Local Best Practices for Home Construction), and use different multipliers for rental versus owner units?
- Question 1b. Economic revitalization — should HUD stop using SBA business disaster-loan data and instead presume need equals a percentage of calculated housing unmet need? HUD cites grantee action-plan data showing 0–7 percent planned, median 2 percent.
- Question 1c. Infrastructure — should HUD stop using FEMA Public Assistance Categories C–G and instead set infrastructure need as a percentage of housing unmet need? HUD cites a 9–31 percent range, median 22 percent.
- Question 1d. Extraordinary circumstances — should HUD reserve Secretarial discretion to use alternative data or methods (HUD’s example: 2018 Hawaii homes made permanently inaccessible by lava flow)?
- Question 2. How should HUD measure the impact of formula methodologies on rural areas and Tribal areas? HUD signals it may define "most impacted and distressed" with separate thresholds for metropolitan, non-metropolitan and Tribal areas.
- Question 3. What adjustments would improve targeting to the most serious needs? HUD states the Act limits grantee eligibility to those impacted by "catastrophic disasters" and asks what that standard should be — a large-scale test (units with major-high or severe damage and unmet need, where major-high includes at least one foot of flooding on the first floor) or a high-concentration test in a small geography.
- Question 4. How might HUD determine separate metropolitan, non-metropolitan and Tribal thresholds?
- Question 5. Should HUD update the minor-low / minor-high / major-low / major-high / severe damage thresholds, which were originally set for Hurricane Sandy and never revised?
- Question 6. Are there objective criteria for grantee capacity and concentration of damage? HUD floats a default preference for allocating to states unless capacity and damage concentration warrant a local or Tribal allocation, and would have its Office of Native American Programs determine Tribal capacity.
- Question 7. Any other objective criteria for assessing concentration of damage and minimum allocation thresholds?
- Question 8. What research or data should inform a mitigation add-on that varies by disaster type? The statutory ceiling is 18 percent of total estimated unmet needs.
- Question 9. How might HUD use repetitive-loss data or damage to critical infrastructure in the formula?
Cite the question number at the top of each paragraph you write. You may answer as many or as few as you wish.
What you are uniquely positioned to say
- PHAsQuestions 2, 4, 6, 1a
If you operate in a non-metropolitan county, the single national "most impacted and distressed" threshold is the mechanism that excludes you — name the disaster and the number. On Question 6, HUD is floating a default preference for allocating to states; if a state pass-through has delayed or shortchanged your units, that is exactly the evidence HUD asked for (and if your state performed well, say that too). On 1a, HUD proposes lower multipliers for rental units on a square-footage rationale, and PHAs are among the few commenters who can put real per-unit rehab costs for deeply affordable rental against that assumption.
- HFAsQuestions 1a, 1b, 1c, 8
HUD proposes borrowing the HOME and Housing Trust Fund cost-adjustment methodology — HFAs run those formulas, so if the index misfires in your state HUD needs to hear it before it is imported into disaster allocation. On 1b and 1c, a flat percentage is simple and fast and also a permanent haircut for any grantee at the top of HUD’s cited ranges; put your action-plan numbers on the record. On 8, the statutory mitigation ceiling is 18 percent and HUD says it lacks research differentiating by disaster type.
- Local GovQuestions 1a, 3, 6
Question 1a asks how to judge whether local regulations are causing unreasonably higher rebuild costs and whether a locality has acted consistently with HUD’s State and Local Best Practices for Home Construction. That is a proposal to make local regulatory posture an input to disaster allocation — engage it directly rather than let it be settled by others. On Question 3, a mid-size city with a concentrated but numerically small disaster has an obvious interest in the concentration prong of the "catastrophic" test.
- Rural & TribalQuestions 2, 4, 6
HUD is explicitly asking how to measure formula impact on rural and Tribal areas, and whether to set separate non-metropolitan and Tribal thresholds. It also proposes that its Office of Native American Programs determine Tribal capacity to administer a grant. Whether that is the right locus, and what the thresholds should be, is being decided in this docket.
- DevelopersQuestions 1a, 5
The proposed "destroyed" category and the shift off SBA data change how fast money arrives after a disaster — a direct input to construction financing assumptions. On Question 5, anyone who has rebuilt to current codes can speak to whether a 2012-vintage damage threshold describes 2026 damage and 2026 costs.
- LendersQuestions 1a, 5
Allocation speed and damage-category definitions drive when recovery capital actually reaches a market. Lenders underwriting in disaster-exposed geographies can put loss and rebuild-cost data against HUD’s proposed multipliers.
- AdvocatesQuestions 2, 6, 9
Question 9 asks about repetitive-loss data, which concentrates in low-income and historically redlined areas — a live equity question HUD is explicitly inviting data on. Questions 2 and 6 decide whether Tribal and rural areas get their own thresholds and who judges capacity.
Rules this notice sets
- Refer to the docket number and the title of the notice.
- Each individual or organization is encouraged to submit only one response — splitting into several dilutes rather than multiplies.
- Identify the question number(s) you are answering. HUD: "You may answer as many or as few questions as you wish."
- Include the name of the person or organization filing and, at the start of the response, contact information (address, phone, email).
- Do not include personally identifiable information.
- Do not submit Confidential Business Information — HUD states CBI-flagged responses "will not be reviewed and will be discarded."
- Comments must arrive through regulations.gov, the email address, or the mailing address. HUD: "To receive consideration as public comments, comments must be submitted through one of the two methods specified above."
91 FR 52314 (opens in a new tab) · FR doc 2026-16499 · docket FR-6337-N-02 · regulations.gov docket HUD-2022-0084 · published Aug 13, 2026 · comments close September 14, 2026