Milpitas council reallocates roughly $675,000 in CDBG revolving loan funds to home repairs and small-business grants

The Milpitas City Council on May 6 approved a substantial amendment to its Community Development Block Grant (CDBG) consolidated plan and 2024–25 annual action plan to reallocate the city’s revolving loan fund balance — approximately $675,000 — to activities that can be spent before HUD’s timeliness test on May 2, 2026.

Acting Housing Official Sarah Balcha explained that the city’s revolving loan fund grew because of recent loan repayments and that HUD limits jurisdictions’ “line of credit” to 1.5 times annual entitlement; Milpitas had exceeded timeliness thresholds. Under federal CDBG rules, program income and revolving loan funds must be spent promptly and some uses are capped: public services are limited to 15 percent of program income and program administration to 20 percent.

Staff proposed and council approved this reallocation package: approximately $385,000 to Rebuilding Together Silicon Valley (RTSV) for single-home rehabilitation and critical home repairs; $262,000 to the city’s Microenterprise Assistance Program (MEAP) administered by the Office of Economic Development; about $12,000 to public services (the maximum allowed given program income in 2024); and about $16,000 for program administration to cover required notices, translation and administration. The allocations together spend down the revolving loan balance and keep the city timely with HUD.

Rebuilding Together representatives told council the demand is urgent and that 15 Milpitas households were denied assistance during the past grant cycle because funds were insufficient. RTSV asked for funds to serve more low-income homeowners needing emergency repairs and accessibility modifications. Acting Housing Official Balcha said RTSV’s intake and pipeline could absorb the $385,000 and complete work before HUD’s deadline.

For MEAP, staff recommended prioritizing grants to qualifying microenterprises within the Milpitas Historic Downtown Business Association boundary and proposed two scenarios for grant size and coverage. Council discussed options, then gave staff direction to award $5,000 grants (rather than larger amounts) citywide with a priority sequence: day‑care microenterprises first, then businesses that did not receive funding last year, with remaining funds available to other eligible businesses. Council asked staff to prioritize outreach to ensure businesses can qualify.

Council approved the substantial amendment by unanimous vote and authorized the city manager or designee to make any technical changes necessary to the consolidated plan and annual action plan.