I was speaking with a friend the other day and she brought up the subject of CSBGs, she mentioned that a friend of hers contacted her and told her about them, that this person had applied for one and received, or is going to receive, $250,000. She said that my friend should apply (she has limited income) and get in on this program. I did an internet search, apparently this is a genuine thing, however I couldn't find the answers to some questions I have, short of actually filling out an application. What I managed to find out is that there are different types of grants, such as SBA loans, home improvement/repair grants and the one that would be pertinent to my friend is one that gives money to low-income persons to pay for utilities, food, etc.

So, my questions are;

This is not considered to be a loan, correct?
Would this be considered to be income and be taxable?
She said that her friend paid a $1600 fee, when she applied, why would someone have to do that? In the cursury reading about it I don't see any mention of a fee. I suppose that the applicant perhaps went through a "facilitator", for want of a better word, however that is pure supposition on my part. Any help clearing this up for me will be appreciated.

It's a scam.

CSBGs do not charge an application fee, and it's also not something that an individual themselves can apply for to get money to pay their bills. Rather, government entities apply for CSBGs from the federal DHHS, and then use this federal grant funding to operate programs to improve their communities.

This means your friend's friend was scammed out of $1600 with the fraudulent promise of an eventual $250,000 payout from a non-existent CSBG, and now is unwittingly trying to rope your friend in too. (Or, even worse, the friend's friend is in on the scam and is deliberately setting up your friend.)

Unfortunately, this scam has become so common that DHHS has a big disclaimer on their webpage for the CSBG stating:

quote:

The Community Services Block Grant (CSBG) does not provide direct grants to individuals; CSBG does not charge a fee for receiving a grant. If you receive a message offering you a CSBG grant or requesting a fee, please contact the U.S. Department of Health and Human Services (HHS) Fraud Hotline at 1-800-447-8477.

For more information, please visit https://www.grants.gov/learn-g...t-related-scams.html

Well, as we all should know, if something seems too good to be true...

I will say that my friend feels the same way as I, it just doesn’t pass the smell test. I believe that her accountant told her not to do it, too. I’ll have to double-check on that. At any rate I initially expressed to her my misgivings, I will double down on that when I speak to her tomorrow morning.

Thank you, sir.