CDBG timeliness (the 1.5× rule)

CDBG has no commitment ledger like HOME's — its capacity discipline is the timeliness test. Under 24 CFR 570.902, an entitlement grantee is "timely" if, sixty days before its program year ends, the unexpended balance on its line of credit is no more than 1.5 times its annual grant.

Fail the test and HUD opens a workout process; fail persistently and HUD can reduce future grants by the amount of the miss. Grantees actively manage to the number, which makes it the closest thing CDBG has to a published capacity metric.

Why it matters for deal-making: a city sitting at 2× or 3× its annual grant is not just slow — it is formally out of compliance and under pressure to move money into fundable, shovel-ready projects quickly. That is precisely the moment a developer with a ready deal, or an owner with a rehab need, finds an unusually receptive grantee.

Measurement caveats worth carrying: the official test uses the grantee's adjusted line-of-credit balance plus program income on a grantee-specific date; program income is invisible in public data, and public outlay data supports the calculation reliably only for grants from federal fiscal year 2020 onward. A ratio computed from public data is therefore a proxy — directionally right, and calibrated sensibly (the national median sits near 1.3×, right where a healthy grantee should be), but not the number HUD's field office prints. States are judged under a different standard (timely distribution, 24 CFR 570.494), so the 1.5× framing applies to entitlement cities and counties only.