Boston— The Dartmouth Hotel, a land- mark in this city’s predominantly African-American Roxbury district, had stood largely vacant for years. The building was “terribly underutilized, and yet we knew this was a gem, a diamond in the rough,” said Charlotte Golar Richie, the city’s chief of housing.

So officials used $757,000 in Community Development Block Grant (CDBG) funds to attract a total of $19 million in financing from 15 sources for the rehabilitation of the hotel, which now includes commercial space as well as 64 housing units on the upper floors and in an adjacent building.

CDBG funding is “often the last piece [of financing] that makes a project go forward,” said DeWayne Lehman, a spokesman for Boston’s department of neighborhood development. The city attracts about $9 in other financing for every $1 in CDBG funds it invests, officials say, making it one of Boston’s most valuable resources for creating housing.

Boston uses a sizable portion of its CDBG dollars in service of its “Leading the Way” plan to create thousands of units of new housing. The city has already met its 2001-2003 goal to create 7,500 new housing units, including 2,100 affordable to low- and moderate-income people, according to Richie. By this June, officials expect to have created 10,000 more units.

But Boston has fewer opportunities to use its CDBG funds for housing these days: Since Leading the Way was inaugurated in 2001, the city’s CDBG allocation has shrunk to $20.9 million from $25.6 million.

Still, officials used $5.4 million of those 2006 funds to spur 24 developments that created 597 housing units, including 524 affordable to low- and moderate-income residents. The CDBG funds anchored a combination of public and private financing that included $13.6 million in state funds, $57.5 million in low-income housing tax credits and $11 million in other federal funds. Altogether, total investment in the projects adds up to $172 million, according to Richie.

“Those are areas that had suffered great disinvestment,” she said. “We are often the first ones out there” to invest in neglected areas, Richie added. “We are the ones leading the way in terms of encouraging others to join us.”

Threats to cut CDBG funding or eliminate the program altogether are a big concern in Boston, which has aggressively fought such efforts. If the program were done away with, “it would be a terrible loss, not just to the city of Boston, but to other cities around the nation that depend on this resource to make things happen,” said Richie.