Topic Question
Broadband Infrastructure

What types of activities are eligible but may not be feasible?

Public services as identified at 24 CFR 570.201(e). Public services may include the installation of satellite dishes and similar equipment on private homes or the provision of wireless routers and/or computers to income-eligible persons or households. Most grantees may only spend 15 percent of their CDBG grants plus 15 percent of the program income earned in the prior program year on public service activities. This severely limits the amount of C...
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Broadband Infrastructure

Must national objective compliance be demonstrated?

Yes. All CDBG assisted activities must be eligible and meet one of three national objectives—benefit to low- and moderate-income persons, elimination of slums/blight, and urgent need. If an activity is eligible but does not meet a national objective, that activity becomes ineligible. The installation, rehabilitation, or reconstruction of public facilities and improvements [24 CFR 570.201(c)]; privately-owned utilities [24 CFR 570.201(l)]; and n...
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Broadband Infrastructure

Can Community Development Block Grant (CDBG) funds be used to fund broadband/telecommunications projects? If so, how?

Yes. CDBG funds may be used to install wiring, fiber optic cables, and permanently affixed equipment such as receivers for areas to receive broadband/internet access. Eligible activities include: The acquisition, construction, reconstruction, rehabilitation, or installation of public facilities and improvements (which include infrastructure improvements) under 24 CFR 570.201(c); Rehabilitation of privately owned buildings for residential purpose...
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Economic Development

Are for profit businesses required to have a DUNS number to be eligible for economic development loans with CDBG funds?

Yes, for profit businesses are required to have a DUNS number to be eligible for economic development loans funded with CDBG. 24 CFR § 570.609 establishes that the requirements set forth in 24 CFR part 5 apply to the CDBG program. 24 CFR § 5.1003 describes the DUNS number requirement in detail. For profit businesses can register for a DUNS number through the Online DUNS Request Portal. This is a free service. Federal procurement data syste...
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Economic Development

The City is thinking about creating a CDBG funded Microenterprise Loan Program. Could the loan program's eligibility/fundability be microenterprise assistance/low mod "limited clientele" or does the national objective have to be "job creation"?

The national objective for microenterprise assistance under the authority of 24 CFR 570.201(o) may meet the low/moderate income limited clientele national objective. There is no requirement that microenterprise assistance must meet the low/moderate income jobs (job creation or retention) national objective. In addition, activities assisted under 24 CFR 570.201(o) do not have to meet the public benefit standards. 24 CFR 570.208(a)(2)(iii) states t...
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Economic Development

Can Section 108 Loans be used for substantial rehabilitation of a school if the school is active (that is, not a closed school being adapted for re-use)?

Please review The Section 108 Loan Guarantee Program regulations at Subpart M, Loan Guarantees, 24 CFR 570.700 - 570.711. Specifically, see "Eligible Activities" at 570.703 and note the first sentence states that, "Guaranteed loan funds may be used for the following activities, provided such activities meet the requirements of 570.200....," which are regulatory references to the General Policies of the Community Development Block Grant (CDBG) pro...
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Economic Development

What happens when a business assisted with CDBG funds fails to create the number of jobs expected or the business closes?

If the business is unable to create the number of jobs they were expected to (or if the business closed) a finding must be made that the grantee failed to meet a national objective and, as a result, HUD may advise them to repay their CDBG line of credit. The funds repaid to the line of credit will be credited to the original activity and zero out the draws. Otherwise, the grantee may subsequently cancel the activity. However, if the local HUD fie...
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Economic Development

How does a business assisted with CDBG funds handle lay-offs and no job creation in year 2 if it was to create jobs? Do we report negative jobs for year 2?

Year 2 accomplishments should be reported as zero jobs created for year 2. Concerning the layoffs: A job filled by a low- and moderate-person meets a national objective at the time the individual is hired. The CDBG regulations do not speak of layoffs; however, it has treated layoffs that occur within two years of the CDBG assistance as though they were vacancies created through job turnover [24 CFR 570.506(b)(5) and (6)]. If the business fills th...
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Economic Development

What is HUD’s guidance on debt collection/forgiveness on economic development loans originated with CDBG funds? Are there any reporting requirements with the IRS?

For CDBG economic development activities, the terms of the loan are negotiated between the grantee and the business being funded. The CDBG Program allows CDBG funds to be provided as a grant or a loan and for grantees to determine the terms of those loans. Each grantee makes decisions about how its program is run. The requirements, including terms of the agreement, including the possibility of waiving repayment for the activity, would need to be ...
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Economic Development

We are planning to provide technical assistance and training to owners of microenterprises and persons developing microenterprises for a small fee. Is the national objective to be met forlow-mod jobs and do we have to track jobs created from this type of assistance?

It is important to remember that microenterprise activities are eligible when the business (at the time of assistance) is no larger than 5 individuals, including the owner. Technical assistance to microenterprises is eligible under 24 CFR570.201(o)(1)(iii), provided a national objective is met. The national objective most appropriate for this kind of activity is Low-Mod Limited Clientele. If the owners/individuals planning to start microenterpris...
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Economic Development

What are the security requirements for a Section 108 loan guarantee if the assets to be assisted with the loan are infrastructure such as neighborhood curbs, gutters, and sidewalk construction/reconstruction?

The security requirements for Section 108 loans are determined on a case by case basis, as described in CFR 24 §570.705 (b). Generally, you can use liens on real property and equipment not directly associated with the loan, as this is one of the acceptable security requirement examples listed in §570.705 (b)(3). However, the exact details of your pledged assets and security requirements will need to be reviewed and approved by HUD after you sub...
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Economic Development

A landlocked company wants to move from the south part of town to the north to expand their operations. The new location is away from the homes of the current employees, but it would allow the company to create 50 new jobs. Will this still qualify for the national objective of job creation?

Your question is concerning the national objective as it relates to a company that wishes to relocate from the south of city to the north of the city in order to expand operations. Our answer is based on a previous correspondence in which you clarified that the site for the company's new location is in a non-entitlement, State Program area. In order to respond to your question, we have made several assumptions, as follows: The eligible activity ...
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Homebuyer Assistance

A CDBG Entitlement grantee wants to carry out homeownership assistance and housing rehabilitation in its NRSA. May the grantee apply the language at 24 CFR 570.208(d)(5)(ii) in meeting a national objective since it is carrying out both homeownership assistance and housing rehabilitation? If so, how?

Yes, the language applies, and here is an example of how aggregation of housing units may result in compliance with the low/moderate income housing national objective: City X is carrying out homeownership assistance and has obligated CDBG funds for 60 households in the NRSA to receive this assistance. The city is also rehabilitating 50 houses in the NRSA. To meet the low- and moderate-income national objective, add the total number of housing act...
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Homebuyer Assistance

A CDBG Entitlement grantee wants to carry out homeownership assistance under 24 CFR 570.201(n) in a Neighborhood Revitalization Strategy Area (NRSA). If this is the only housing activity the grantee plans to carry out in the NRSA, may all the units be considered a single structure for national objective compliance purposes?

No. Although 24 CFR 570.208(d)(5)(ii) allows housing activities for which CDBG funds have been obligated during a program year in the strategy area to be considered a single structure for national objective compliance purposes, the requirement that homeownership assistance activities carried out under 570.201(n) be restricted to low- and moderate-income persons is statutory. Each homeowner receiving assistance must be low- or moderate-income. Sta...
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Homebuyer Assistance

Can CDBG be used to provide down payment assistance to income-eligible homebuyers? If so, what regulations govern the provision of CDBG down payment assistance?

CDBG funds can be used for down payment assistance up to 50% of the lender required down payment amount. This can be done as a stand-alone homeownership assistance activity under 24 CFR 570.201(n) as well as other eligible costs such as principal write-downs, closing costs, etc. Down payment assistance provided under 24 CFR 570.201(n) is restricted to low/moderate income households. If down payment assistance is funded as a public service, this a...
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Homebuyer Assistance

Has HUD modified the first time homebuyer definition(s) to include anyone participating in FHAs Back to Work mortgage program?

The CDBG program regulations found at 24 CFR Part 570 do not define the term first-time homebuyer. The CDBG regulations also do not restrict CDBG assistance to only those households purchasing a home for the first-time. It is, however, possible for the grantee to place additional requirements on its local program policies and procedures, such as limiting the activity to first time homebuyers or homebuyers only located in a designated area.

Homebuyer Assistance
Homebuyer Assistance

How can CDBG homeownership assistance provided under 24 CFR 570.201(n) meet the low- and moderate-income national objective?

CDBG-assisted activities such as homeownership assistance under 24 CFR 570.201(n) and housing rehabilitation under 24 CFR 570.202(a)(1) can only meet the low- and moderate-income housing national objective (LMH). Homeownership assistance cannot meet the low- and moderate-income area benefit national objective because it is a direct benefit activity. Homeownership assistance also cannot meet the low- and moderate-income limited clientele national ...
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Homebuyer Assistance

How should CDBG grantees enter homeownership assistance activities in the Integrated Disbursement and Information System (IDIS)?

The grantee may choose to enter all homeownership activities under one IDIS activity number or each one under a separate IDIS activity number. The grantee has the discretion to choose the method it prefers. However, there must be an address entered for each assisted unit in an IDIS activity.

Homebuyer Assistance
Homebuyer Assistance

How should the CDBG grantee decide what amount of subsidy is appropriate? The Uniform Administrative Requirements require that such subsidies are necessary and reasonable.

CDBG grantees must verify the income of the household in order to determine its eligibility. Using this information, the grantee can establish a standard for how much of the household's gross income can be allocated to housing costs; a commonly-used standard is about 30% of adjusted gross income for principal, interest, taxes, and insurance (PITI). In many cases, PITI charges exceed 30% of the household's income. The example below shows how under...
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Homebuyer Assistance

If the city is providing CDBG down payment assistance, is the grantee required to ensure that no more than 30% of the beneficiary’s income be spent on housing to ensure affordability?

No, when providing homebuyer assistance, grantees are not required to ensure that applicant households pay no more than 30 percent of household income for housing expense. However, it is important to review a homebuyer's income and expenses, even when providing limited financial assistance such as down payment assistance, to help prevent applicants from entering into financial commitments that they will not be able to sustain over time. Grantees ...
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Homebuyer Assistance

If the grantee awards CDBG homeownership assistance as a loan, can it be forgivable?

Yes. A grantee may require the homeowner to remain in the unit for a selected period after it is purchased. If the homeowner does so, the balance of the loan is forgiven. This type of loan is used more frequently for housing rehabilitation but can be used for home purchases. A grantee may also impose "due on sale" provisions requiring repayment if the homebuyer sells the property, dies, or stops occupying it as their principal residence.

Homebuyer Assistance
Homebuyer Assistance

Is there a maximum contract price for a homebuyer assistance program? Is there a general rule or requirement of the price range a low income applicant should be looking for when they are home searching?

Absent limiting local program guidelines, and unlike the HOME program which limits the value of any homebuyer/homeowner property to 95% of the median purchase price for that area, CDBG regulations do not cap the maximum purchase price of a property. HUD does encourage the grantee to establish and follow written program and underwriting guidelines for its programs. These guidelines should include property eligibility and could include a limit on value.

Homebuyer Assistance
Homebuyer Assistance

Is there a method for other people, who are not low- or moderate-income, to receive CDBG homeownership assistance? If so, is it an activity frequently carried out by grantees?

Yes, as a public service under 24 CFR 570.201(e) of the Entitlement CDBG regulations and Section 105(a)(8) of the Housing and Community Development Act (HCDA). However, the only homeownership activity that is allowed as a public service is downpayment assistance. (Note that there is no requirement that only 50 percent of the downpayment required be provided when such assistance is carried out as a public service.) This activity is not frequently ...
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Homebuyer Assistance

May anyone requesting homeownership assistance receive such assistance as identified at Section 105(a)(25) of the HCDA? Why?

No. Only low- and moderate-income households may benefit from these activities because the statute specifically states, "(25) provision of direct assistance to facilitate and expand homeownership among persons of low and income ..." In addition, each of the five eligible activities identified above contain the language "low and moderate income homebuyers." Therefore, Section 105(a)(25) of the Housing and Community Development Act (HCDA) restricts...
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Homebuyer Assistance

May CDBG homeownership assistance be provided as a grant?

Yes. It is at the grantee's discretion regarding the provision of assistance as a grant or loan. Most grantees award CDBG funds for homeownership assistance as a loan, often forgiven over a period to avoid windfalls by the purchaser while allowing equity to accrue.

Homebuyer Assistance
Homebuyer Assistance

Must the low- and moderate-income housing national objective criterion be met if the CDBG downpayment assistance is provided as a public service?

No. The activity may also meet the low- and moderate-income limited clientele national objective provisions at 24 CFR 570.208(a)(2)(i)(B) or (C).

Homebuyer Assistance
Homebuyer Assistance

The city offers homeowners forgivable mortgage loans funded through the CDBG program for qualifying activities involving home ownership, down payment or rehabilitation of property. Recently, the City's finance department received information during an IRS webinar that said the City is required to issue 1099C forms when a mortgage loan is forgiven, thus reporting the forgiven loan as taxable income for the homeowner. Are we required to report the forgiven loan as taxable if it was funded with CDBG dollars?

The CDBG regulations permit grantees to decide how to provide CDBG assistance. The CDBG dollars can be provided as a grant or a loan, as an interest reduction or a loan guarantee. When provided as a forgivable loan, the CDBG regulations do not specify if IRS Form 1099C must be issued when the mortgage is forgiven. According to IRS Publication 4861, if a debt for which a person is personally liable is forgiven or satisfied for less than the full a...
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Homebuyer Assistance

The terms homeownership assistance and down payment assistance seem to be used interchangeably. Is there a difference and where is it in the list of eligible CDBG activities?

The following sections will address both activities, which are different. As an overview, down payment assistance is exactly what it sounds like: paying part of the required down payment. Except when done as a public service, the assistance is limited to 50% of the required down payment. There are numerous other ways of supporting homeownership for low and moderate income households, including reducing mortgage principal and interest, and paying ...
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Homebuyer Assistance

We have targeted low/mod families to purchase our completely renovated homes; however, we have not been successful in locating eligible families to qualify for a mortgage. What would you recommend we do in order to complete the national objective and close these activities? Should we consider lease purchase, rent, or market all social economic classes for purchase if able to qualify for a mortgage?

The CDBG regulation at 24 CFR 570.208(a)(3) requires that each of the homes must be occupied by households that earn less than 80 percent of area median income adjusted for household size, unless the housing is located within a designated Neighborhood Revitalization Strategy Area, where pursuant to 24 CFR 570.208(d)(5)(ii), the homes may be considered to be a single structure for purposes of determining whether or not at least 51 percent of the h...
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Homebuyer Assistance

What are some of the activity delivery costs of homeownership assistance that may be charged to the CDBG activity?

The salary of the grantee's staff person(s) taking and processing applications from interested homebuyers and conducting the classes listed above may be charged to homeownership assistance proportionate to the amount of time grantee staff spends on these activities. Some grantees require credit counseling and homebuyer education classes to be completed before CDBG assistance is provided for homeownership assistance. Those classes may be considere...
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Homebuyer Assistance

What does "acquire guarantees of mortgage financing but not guaranteeing the mortgage itself" mean in the CDBG program?

This means if the private lender selected by the homebuyer offers a guarantee of the mortgage financing (as may occur with a Federal Housing Administration (FHA) mortgage), the grantee may purchase the guarantee to ensure repayment in case of default by the homebuyer. This section allows the purchase of mortgage insurance by the household but not the direct issuance of mortgage insurance by the grantee.

Homebuyer Assistance
Homebuyer Assistance

What does "financing the acquisition of housing occupied by the homebuyers" mean in the CDBG program?

Some households rent a condominium, townhouse, or single unit structure with the option of purchasing it. They may not be ready to purchase when moving in but may be ready in a year or so to begin the homebuying process. The grantee may use CDBG funds to make a loan to the individual or household to purchase the unit they occupy.

Homebuyer Assistance
Homebuyer Assistance

What does "subsidizing interest rates and mortgage principal amounts" mean in the CDBG program?

Grantees may provide an interest rate subsidy to make the payments more affordable. For example, a bank may provide a couple with a home loan with a five percent interest rate. The grantee may subsidize it so that the interest rate changes from five percent to three percent, thereby lowering the mortgage payment. Grantees may also subsidize the mortgage principal amount. For example, another couple acquired a mortgage for $75,000. The grantee awa...
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Homebuyer Assistance

What if the prospective CDBG-assisted homebuyer doesn't complete the process?

For example, Ms. C. completed the homebuyer education and credit counseling courses. She changed her mind about purchasing a home once she found out how much work she needed to do to clear items from her credit report. She advised the grantee that she was dropping out of its homeownership assistance program. What about the costs incurred by Ms. C's participation to date?

 

The costs of the homebuyer education and credit counseling courses may still be charged as activity delivery costs of homeownership assistance under 24 CFR 570.201(n), but only if the grantee enters all its homeownership assistance activities for the program year in IDIS under one activity. Although the participant did not complete the homebuying process, the courses she completed were not standalone courses and were required to be completed to p...
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Homebuyer Assistance

Where is homeownership assistance cited in the CDBG regulations, and where may you find the list of activities defined as homeownership assistance? What are those activities?

Homeownership assistance is cited at 24 CFR 570.201(n) of the Entitlement CDBG regulations, and the list of activities is found at Section 105(a)(25) of the Housing and Community Development Act (HCDA) of 1974, as amended. The activities as defined in the statute are: subsidizing interest rates and mortgage principal amounts; financing the acquisition of housing occupied by the homebuyers; acquiring guarantees of mortgage financing obtained by ho...
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Homebuyer Assistance

Why is downpayment assistance limited to 50 percent of the required down payment? Can the amount of CDBG funds provided as downpayment assistance be used for any of the other homeownership activities identified at Section 105(a)(25) of the HCDA, which include subsidizing of the mortgage principal amount?

Section 105(a)(25) of the Housing and Community Development Act (HCDA) limits downpayment assistance to a maximum of 50 percent of any downpayment required from low- or moderate-income homebuyers. This is a statutory requirement, so it cannot be waived. The amount of the required downpayment may vary among jurisdictions. However, the amount of downpayment assistance paid with CDBG funds must be necessary and reasonable in accordance with 2 CFR 20...
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Homeless

When carrying out activities that benefit homeless persons, is the CDBG grantee (or subrecipient) required to ensure that the beneficiaries met the categories of definitions of homeless at 24 CFR 91.5 in connection with the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act?

No. The CDBG program allows grantees to define "homeless" for presumed low- and moderate-income benefit activities. The CDBG regulations and the CDBG Guide to National Objectives and Eligible Activities for Entitlement Communities do not define "homeless persons". However, the Consolidated Plan regulations do, and the CDBG program is one of the programs covered by the Consolidated Plan; but the Consolidated Plan regulations govern the development...
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Homeless

Which definitions of homeless can be used in the CDBG program to show that persons may be presumed to be low- and moderate-income?

The regulations at 24 CFR 91.5 identify several definitions/types of homelessness. Listed below are those definitions/types and if persons meeting them may be presumed low- and moderate-income as stated at 24 CFR 570.208(a)(2)(i)(A) for Entitlements and 24 CFR 570.483(b)(2)(ii)(A) for States. At risk of homelessness: No. Every individual or family at risk of homelessness may not be low- and moderate-income because being considered at risk of home...
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Homeless

Can persons presenting evidence of homelessness be considered homeless for CDBG program purposes?

The Entitlement CDBG program regulations at 24 CFR 570.506(b) state that grantees may substitute evidence that the assisted person is homeless. This evidence may come from the person's participation in another program serving homeless persons such as those identified above.

Homeless
Homeless

May an entitlement grantee provide CDBG funds to support the local Continuum of Care (CoC), or one of the non-profits participating in the local CoC, by paying for costs associated with administration of the Homeless Management Information System (HMIS)?

CDBG funds cannot be used to pay for the administration costs for HMIS since such costs are not a CDBG-eligible activity. CDBG funds may not be used to pay the general administrative costs of the Emergency Shelter Grant (ESG) program or other homeless programs under the authority of Section 105(a)(13) of the Housing and Community Development Act of 1974, as amended (HCDA), or 24 CFR 570.206 of the Entitlement CDBG regulations. HMIS is used to col...
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Homeless

May CDBG funds be used for any costs other than administrative costs for the HMIS?

CDBG funds may support only those Homeless Management Information System (HMIS) costs that are activity delivery costs of a public service activity in accordance with 24 CFR 570.201(e) for Entitlements and Section 105(a)(8) of the HCDA for States. The grantee must be carrying out a CDBG-eligible public service that meets a national objective. An example of eligible CDBG costs would include staff time using HMIS for client case management for serv...
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Homeowner Rehabilitation

Does the CDBG program have a definition of homeownership like the HOME program does? Specifically, can a housing unit that is an installment purchase be assisted with CDBG funds?

The CDBG regulations are silent on a definition of homeownership. Each Grantee must describe the activities it will undertake and how it will define homeownership in its Consolidated Plan and Policies and Procedures. If in this situation the seller retains ownership rights then the current resident is not considered a homeowner but rather a renter. Under that scenario, not only is your CDBG investment unsecured but (assuming your intent is rehabi...
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Homeowner Rehabilitation

We have difficulty obtaining sufficient responses for a truly competitive bidding process for our CDBG rehab program. Our policy is to have a minimum of two bids plus our internal cost estimate which meets state code. However, occasionally we have only one bid, necessitating a costly and time consuming rebidding process. Is it acceptable to have one bid, or must we decline the project until two bids are submitted?

Grantees and subrecipients that are governmental entities are required to use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in 2 CFR 200.320. When procuring for a housing rehabilitation contractor, the applicable procurement methods would include small purchase (currently up to the simplified acquisition ...
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Homeowner Rehabilitation

A CDBG project involves making repairs to the exterior of an owner-occupied duplex in which one of the households is above the 80% AMI income limit and the other one is below. If $30,000 of CDBG funds will go into the rehabilitation of both units, does the Lead Safe Housing Rule require us to perform interim controls on the unit that does not meet the income limit? Our understanding is that we would have to apply interim controls to both units.

Yes, the CDBG rules allow for the rehabilitation of both parts of a duplex, as long as one household is below 80% of area median income (570.208(a)(3)). Therefore, the grantee can treat both units. Assuming that the property was constructed prior to January 1, 1978, your interpretation about lead is correct. 24 CFR 35.930(c) states that for residential property receiving an average of more than $5,000 and up to and including $25,000 per unit in f...
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Homeowner Rehabilitation

Does CDBG require a lead safe clearance test for homeowner rehab programs under $5,000? Our understanding is that clearance is not required if the disturbance of the paint surface is de minimis.

For housing rehabilitation work costing under $5,000 per unit, the "do no harm" approach is used. You are correct that clearance is not required when painted surface areas are below HUD's de minimis threshold (only).Note that when clearance is required, HUD's Lead Safe Housing Rule (LSHR) requires a clearance examination be done by an independent party instead of the certified renovator's cleaning verification procedure. HUD's LSHR regulations ar...
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Homeowner Rehabilitation

In the CDBG Program, can a "for profit" entity administer/manage the jurisdiction’s Housing Rehabilitation Program as a subrecipient?

A for-profit entity cannot be a subrecipient unless it is a qualified microenterprise as stated in 24 CFR 570.201(o). A subrecipient is defined at 24 CFR 570.500(c) as a public or private nonprofit agency, authority, or organization, or a for-profit entity authorized under 570.201(o). If the for-profit is not a qualified microenterprise, it cannot be considered as a subrecipient. A grantee may procure a contractor (which may be a for-profit) to a...
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Homeowner Rehabilitation

Are there federal guidelines for appliance allowance?

There are no specific guidelines or maximum amounts for the cost of appliances included in housing rehabilitation. The cost of appliances, as with all federal grant program costs, must meet the test of reasonableness. Most communities include specifications for allowable appliances in their housing rehabilitation standards. In addition to energy efficiency standards, such as requiring Energy Star compliance, the specifications often refer to an a...
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Homeowner Rehabilitation

If our CDBG funded rehab program takes into consideration family size, can we count expectant children as part of the household?

The CDBG regulations do not specify if children expected to be born to pregnant women are included as members of the household. It would be up to your local program to develop and follow policies for the rehabilitation program to address this issue, but it would be reasonable to anticipate imminent changes in family composition.

Homeowner Rehabilitation
Homeowner Rehabilitation

Can CDBG be used to pay for appliances in a minor home repairs program and do these repairs have to comply with code?

CDBG funds can be used in minor home repair and/or specialty repair programs including using CDBG funds for the acquisition of appliances that are required as part of the rehabilitation. CDBG has no minimum investment requirement and no requirement that units meet code upon completion, although this is sometimes required by grantees.

Homeowner Rehabilitation
Homeowner Rehabilitation

I have a property that has requested CDBG funds for rehabilitation, but the property is owned by a trust. I know that CDBG funds can be expended if the property is owned in fee-simple title, as a life estate, or a 99 year leasehold, but is living trust a valid form of ownership for CDBG?

CDBG regulations are silent on acceptable forms of ownership or the how CDBG funds are secured. The project must be eligible and meet a national objective. The Grantee should have policies and procedures in place that both ensure federal compliance but also delineate how the program will be operated, including types of properties and acceptable ownership.

Homeowner Rehabilitation
Homeowner Rehabilitation

If someone received a CDBG assisted homeowner rehabilitation loan in 2008, can they come back and receive additional CDBG assisted rehabilitation funding?

CDBG funds may be used more than once to rehabilitate the same housing structure. This may be necessary because the work was not performed satisfactorily the first time or there is a different problem that needs resolution. There is no time limit. If years have passed, the household should be income qualified again to ensure that the low/moderate income housing national objective is met.

Homeowner Rehabilitation
Homeowner Rehabilitation

Are mobile homes eligible to be rehabilitated with CDBG funds? This is a single family residence and they own the lot that the mobile home is on.

The CDBG regulations allow the rehabilitation of owner-occupied mobile homes if they are considered part of the community's permanent housing stock. Your policies and procedures should govern what/and how they are included in your program. 

Homeowner Rehabilitation
Homeowner Rehabilitation

The city currently uses CDBG funds to operate a homeowner rehab program. A homeowner recently applied for the program to obtain assistance in making improvements to her home. The applicant has an addition to the garage that was not built to code and would require extensive work to make it safe. Is it possible to demolish only the portion of the garage that was not built to code using CDBG funds? If so, should the demolition be done separate from the other rehabilitation work completed at the home?

CDBG regulations permit funds to be used to rehabilitate a garage or additions to a housing structure incidental to the rehabilitation of the home. Assuming that your local guidelines include detached garages as an eligible housing rehabilitation activity, then demolition and reconstruction of the unsafe addition may be eligible as housing rehabilitation and meet the low/moderate income housing national objective. There is no CDBG requirement for...
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Job Training

Can CDBG funds be used to pay salaries for persons participating in CDBG-assisted job training programs?

No. Salaries for job training participants are not considered an activity delivery cost of job training. However, the salary of the person providing the job training is considered an eligible activity delivery cost of job training.

Job Training
Job Training

Can CDBG funds be provided to job training participants for transportation and lunch expenses?

Yes. CDBG funds may be used to pay stipends to persons participating in CDBG-assisted job training programs. A stipend is a payment to defray out-of-pocket costs participants incur while attending job training. Stipends usually cover round-trip transportation costs (bus, subway, etc.) and may also include lunch.

Job Training
Job Training

Can CDBG funds for stipends be provided directly to the job training participants?

Yes, although this is not recommended. The grantee may provide bus and/or subway passes to job training participants that cover transportation costs for the length of the job training. The grantee may also provide job training participants with a voucher daily that covers the cost of lunch from nearby restaurants. If a person brings his/her lunch, he/she would not receive a lunch voucher.

Job Training
Davis-Bacon

Does the use of CDBG funds to pay for construction loan interest trigger Davis-Bacon? By this I do not mean using CDBG assistance to write down the interest rate charged on a construction loan.

Federal labor standards provisions apply to construction work financed in whole or in part with CDBG funds of more than $2,000. “Financing" is not limited to the act of paying for construction work directly. "Financing" can mean, for example, using CDBG assistance to pay the interest charged to reduce the interest rate on a construction loan (including certain collateral accounts). Generally, "financing" also means using CDBG funds to provide p...
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Davis-Bacon

Our agency owns a mixed use residential building. There are six residential units and two commercial units. We are planning renovations in excess of $2,000 which will be funded with CDBG. Does Davis-Bacon apply because although there are less than eight residential units it is a mixed use building?

The Davis-Bacon applicability threshold for residential property is 8 or more units. For mixed use property, there is no unit threshold except that, if the entire rehabilitation is clearly limited to the residential portion, the residential threshold applies. However, if the commercial space is also rehabilitated, Davis-Bacon would apply. It should be noted that some states have labor laws that may also apply to CDBG-funded construction projects....
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Davis-Bacon

When it comes to prevailing wage in compliance with the labor laws, we have been told to always compare Federal Prevailing Wage Rates with our State Prevailing Wage Rates for the same trade and use the higher of the two. Is there language in the federal Law that states that and if there is, where can I find it?

The federal law that applies federal prevailing wage rates (Davis-Bacon rates) to CDBG funding is Section 110 of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5310). Section 110 requires the payment of wages at rates "not less than" the local prevailing wages determined by the U.S. Secretary of Labor under the Davis-Bacon Act. This means that the federal wage rates are only a minimum, and if state laws, applicable to th...
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Davis-Bacon

A group home is constructing an addition to expand capacity. Is there an exemption to Davis-Bacon?

The applicability of Davis-Bacon under CDBG turns on whether the property is in fact a residential property containing less than 8 units. If the group home is in fact residential, as opposed to a transient homeless shelter, and is designed similar to a single-family home, it would not be covered by Davis-Bacon under the language of Sec. 110 of the HCD Act. The fact that the property is considered a public facility for program eligibility purposes...
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Davis-Bacon

In cases where the work is being contributed in-kind, or paid for from another source and CDBG funds are only paying for materials, does Davis-Bacon still apply?

Bona-fide volunteers are excluded from Davis-Bacon requirements under CDBG (and other HUD programs). HUD Regulations at 24 CFR Part 70 provide definitions and additional guidance concerning the use of volunteers. Generally, volunteers are defined as individuals who: Perform services for a public or private entity for a civic, charitable, or humanitarian reason, without promise, expectation, or receipt of compensation for services rendered; May b...
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Davis-Bacon

Are certified payrolls for apprentices in a Step-Up program required for Davis-Bacon projects? If so, would that mean that the apprentices must be assigned work classifications that match with classifications on the applicable wage decision?

Your question is about federal labor standards requirements for apprentices in a Step-Up program. The applicable requirement is found in Chapter 4 of the HUD Handbook on Federal Labor Standards Requirements in Housing and Urban Development Programs. In addition to reviewing this chapter, you should specifically note paragraph 4-2 that provides guidance on apprentices and states that: "E. Proper classification of work. Each laborer and mechanic sh...
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Davis-Bacon

What are acceptable ways to confirm that payroll hourly rates have been reviewed and found to correspond with the ones on the applicable wage determination?

Adequate documentation of payroll review can be based on establishing a reasonable, objective set of records that can be verified by a third party. A suggested format would include a brief statement, signed and dated by the reviewer, indicating that a specifically identified payroll document had been compared to specific wage determination, along with notation whether or not any discrepancies have been identified. The applicable payroll and wage ...
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Davis-Bacon

We are currently reviewing an application for an owner-occupied rehabilitation program that plans to offer loans of approximately $20,000 or less to home owners for necessary repairs. The organization plans to do 10 owner occupied rehabs of single family, one-unit properties. What I have read so far is that the minimum threshold for Davis-Bacon to apply is if it is a building of 8 units or more, and therefore would not apply to a program that intends to rehab multiple (possibly over 8) 1-unit properties. Is this a correct interpretation?

Davis-Bacon in CDBG is driven by the number of units on a property or on contiguous lots, owned and operated as a single project. Separately owned single-family homes of separate parcels are exempt, regardless of how many units are in the same contract.

Davis-Bacon
Davis-Bacon

We have granted funding to a domestic violence shelter that has a 5-bedroom (single "unit") house which offers emergency shelter to women facing domestic violence for an average of about 21 days. They will be using the funds to make repairs to the home. Would Davis-Bacon Wages apply? I know it does not apply to residential dwellings, but I do not know if this space is considering residential.

Under the CDBG program, facilities that are designed for use in providing shelter for persons with special needs are considered public facilities and not permanent housing. Such shelters would include shelters for victims of domestic violence. Use of CDBG funds in a construction contract in excess of $2,000 to repair the shelter would trigger prevailing wages as defined by the Davis-Bacon Act.

Davis-Bacon
Davis-Bacon

If I use CDBG dollars for demolition and cleaning of a site for a larger project which triggers Davis-Bacon, is it required the private dollars invested for construction also follow the rules of Davis- Bacon? My State has done away with prevailing wage requirements.

Davis-Bacon wage rates apply when CDBG funds pay in whole or in part for any direct cost of construction and the construction meets one of the following thresholds: Residential: property has more than 8 units Non Residential: Any construction work valued at more than $2,000 Certain CDBG activities or soft costs such as real property acquisition or architectural and engineering fees do not trigger Davis-Bacon requirements. There are instances wh...
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Davis-Bacon

If CDBG funds only pay for pre-development costs on a project that will ultimately lead to jobs for low- and moderate-income people, does the use of the CDBG funds in the project trigger Davis-Bacon requirements? CDBG funds will not be used to pay for any other part of the project which may include acquisition, construction, or rehabilitation.

There are a number of project costs that may be paid with CDBG funds without triggering the Davis-Bacon requirements. These include: Acquisition costs, Financing costs, and Soft costs such as the cost of legal, architectural and engineering, and construction management services. The use of CDBG for predevelopment costs such as those described in your question will not alone trigger Davis-Bacon prevailing wage requirements. However, if any const...
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Davis-Bacon

The City is initiating an energy efficiency program for residents using CDBG funds. We will have 2 contractors: an energy audit contractor and a construction contractor. We plan to have one agreement with each contractor to cover the entire project. The homes are scattered sites throughout the city and have individual homeowners. Even though we are expending over $2,000 and assisting approximately 10 homes, does Davis-Bacon apply since the homes are not located on contiguous lots and are individually owned?

There are two thresholds that trigger Davis-Bacon in the CDBG Program. The first is when CDBG is used to fund construction contracts of more than $2,000 in non-residential properties. The second threshold is when CDBG is used to fund residential construction contracts for properties that include 8 or more units. A Davis-Bacon covered residential property is defined as 8 or more units in one or more buildings on an undivided lot or on contiguous l...
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Davis-Bacon

Is Davis-Bacon triggered when there is interior and/or exterior rehabilitation of a condo unit within a multi-unit condominium where the occupant of the condo unit owns the air space through a recorded warranty deed? There are 4 units per building and 20 buildings on the property.

For CDBG projects, residential properties containing 7 or fewer units are exempt from Davis-Bacon. However, the eight-unit threshold applies to the number of units on a property; not the number of units being rehabilitated or constructed and not the number of units funded with CDBG dollars. A property is defined as one or more buildings on an undivided lot or on contiguous lots or parcels which are commonly-owned and operated as one rental, coope...
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Davis-Bacon

A business wants to apply for an infrastructure loan/grant to create a road to a building that is not built yet. The building will be paid for by the business and the business will create 15 jobs. The business wants to use the building as match/leverage for the infrastructure. The jobs will be in the building once it is built. Are the match funds from the private business that will be used to build the building considered part of the CDBG project and therefore Davis-Bacon is required on the construction of the building? Or because the private business is paying for the construction of the building not CDBG funds for that activity – is Davis-Bacon exempt?

The construction of a road using a CDBG infrastructure loan is subject to Davis-Bacon labor standards if the cost of construction is $2,000 or more, regardless of whether it is financed partially or completely with CDBG funds. If the CDBG activity is one large construction contract covering both the building and the road, then Davis-Bacon labor standards will apply to the construction of the building. Even though CDBG is not being used for the bu...
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Davis-Bacon

Does the use of CDBG funds to pay fees to a general contractor/builder managing a project trigger Davis-Bacon requirements?

There are a number of project costs that may be paid with CDBG funds without triggering the Davis-Bacon requirements. These include: Acquisition costs, Financing costs, and Soft costs such as the cost of legal, architectural and engineering, and construction management services. You can find HUD’s description of the applicability of Davis-Bacon to CDBG projects provided on the Factors of Labor Standards Applicability page. If the fees to a ge...
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Davis-Bacon

We have a public sewer project where we are paying only for site work. Construction and equipment for the project are not part of our contract. Is it necessary to require Payment and Performance Bonds and Prevailing Wage of the contractor that is building the sewer plant? We are requiring this of the contractor that is doing the site work.

Davis-Bacon wage rates apply when CDBG funds pay in whole or in part for any direct cost of construction and the construction meets one of the following thresholds: Residential: Property has 8 or more units Non Residential: Any construction work valued at more than $2,000 Since CDBG funds are being used to finance part of the construction of the project, in this case site work, Davis-Bacon wage rates apply to the entire construction project. Yo...
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Davis-Bacon

When do Davis-Bacon requirements apply to construction on residential property?

Davis-Bacon applies to the rehabilitation of residential property only if the property contains 8 or more units. Residential property that contains 7 or fewer units is exempt. Although the statute refers to the rehabilitation of residential property, this exemption has been interpreted to include the new construction of residential property containing 7 or fewer units. Typically, single-family homeowner properties are excluded under this exemptio...
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Fair Housing and Section 504

Is there an ADA compliance requirement when we are using CDBG to rehabilitate a multi-unit housing development?

Accessibility requirements for CDBG assisted rental rehabilitation are based on the Fair Housing Act and Section 504 of the Rehabilitation Act of 1973, rather than the ADA. The ADA generally applies to public facilities and housing provided directly by state and local governments. For a multi-family project, the new construction accessibility standard must be met if the project has 15 or more total units and the cost of the rehabilitation is at l...
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Fair Housing and Section 504

Are we required to have an affirmatively furthering fair housing policy in place for projects or programs that do not involve housing construction or rehab? For example, a subrecipient is using CDBG for an intersection improvement and another for a wheelchair accessible play structure must they have an Affirmative Fair Housing Policy?

The unit of local government receiving CDBG funds must affirmatively further fair housing. This statutory requirement is recognized in the certifications it signs as part of its Consolidated Plan submission for CDBG funds. The AFFH policy covers the entire program, including all activities and all subrecipients. There is no need to develop separate policies. The required certification regarding fair housing reads as follows: “Affirmatively Furt...
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Fair Housing and Section 504

Is a grantee required to have an ADA Officer/Coordinator due to Section 504 and the ADA? And if so, is there a resource that describes the responsibilities of this position?

There are two resources that should help clarify what is required: Basically CDBG for Entitlements, Chapter 19 Fair Housing   HUD CPD Notice 05-10: CDBG and Section 504 Americans with Disabilities Act, Architectural Barriers Act In terms of designating a specific person, Basically CDBG provides the requirements under Section 504 where grantees with more than 15 employees must have a 504 coordinator. This person may already exist within you...
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Section 3

CDBG funds will eventually be used to pay for the actual construction work to rehab a community center. However, the professional services for the design and engineering of the center will be paid with local, non-federal funds. Are these professional services subject to the same Section 3 reporting requirements as the construction work?

The professional service work for design/engineering that was completed prior to your involvement would not be included in any Section 3 reporting since no covered HUD grant funds were used. Construction, and construction-related, and any contracts are subject to Section 3 requirements if $1 of covered HUD funds is used. 24 CFR Part 135 - Section 3 Regulations states: Section 3 covered contract means a contract or subcontract (including a profess...
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Section 3

A project funded by FHWA and CDBG is in conflict with Section 3 requirements for preferential treatment. How do we resolve this conflict?

You are correct. There is a conflict with Section 3 which requires that preferential hiring be afforded to those living in the project area and FHWA regulations that prohibit preferential hiring. In 2010, FHWA developed a livability initiative to better coordinate federal aid highway programs with grant programs administered by HUD and EPA. Under this initiative, FHWA may waive on a case by case basis the prohibition on local hiring preferences t...
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Section 3

When is Section 3 triggered for a CDBG project?

Section 3 applies to projects of a certain scope and monetary amount and is triggered when the following thresholds are met and new hiring and/or contracting opportunities are generated by the use of grant funds. Scope: Section 3 requirements apply to projects that involve work arising in connection with the construction or rehabilitation of a HUD-assisted project, regardless of how the grant funds are actually spent. Section 3 requirements do n...
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Section 3

Would Section 3 requirements apply only to the construction/rehabilitation phase of a community center or do they continue to the employees/staffing of the community center?

Section 3 requirements do not apply to projects that do not involve housing construction, rehabilitation, or other public construction, such as a community center. The requirements would not apply to the staffing of the community center even if the construction / rehabilitation of the community center was a Section 3 covered project.

Section 3
Section 3

How do you establish the basis for the 10% goal for contracts? Is it based on the total value of the construction contract or is it based on the value of the covered contracts for building trades work, such as carpentry, masonry, plumbing, electrical, and demolition?

The regulations at 24 CFR 135.30(c)(1) establish a goal that at least 10% of the dollar amount of Section 3 covered contracts for building trades work be awarded to Section 3 businesses. The Section 3 requirements would apply to aggregate amount of all projects involving housing construction, rehabilitation, or other public construction. Therefore the numerical goal would be 10% of the total dollar amount of all covered contracts.

Section 3
Acquisition-Disposition-Demolition

What are the basic principles to meet CDBG eligibility and national objective requirements for acquisition, demolition, and disposition activities?

Each CDBG project must be an eligible activity and meet a national objective. Acquisition of real property, demolition and disposition are all eligible activities. Meeting a national objective can be more complex. CDBG grantees must identify the planned end use for all properties that they acquire. However, when the planned use does not come to fruition, grantees often struggle to find alternative end uses for these properties. Nonetheless, ...
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Acquisition-Disposition-Demolition

Our community wants to demolish some blighted properties. How can we meet a CDBG national objective with this activity?

The main option is to treat the demolition as an activity that aids in the prevention or elimination of slums and blight, either on a spot basis (SB) or an area basis (SBA) (24 CFR 570.208(b)). For the removal of isolated instances of blight, the SB criteria are the most appropriate. Use of SBA covers more properties; establishing an area as blighted requires more documentation. In cases where removal of blight is the goal of the demolition, the ...
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Acquisition-Disposition-Demolition

If our community wishes to qualify a demolition activity as meeting the CDBG national objective of benefiting low- and moderate-income persons, is there a way to accomplish this?

If the demolition is integral to another activity meeting the national objective of benefitting low- and moderate-income persons, the demolition could meet a national objective other than slums and blight. For example, a grantee could demolish a vacant structure and remove the debris to make a neighborhood park and playground that will serve a predominantly residential low- and moderate-income neighborhood. It is very difficult to qualify a stand...
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Acquisition-Disposition-Demolition

If our community must acquire the property with CDBG funds in order to carry out the demolition, how can we meet a national objective?

When using CDBG funds to acquire such properties (24 CFR 570.201(a)), the situation can be more complicated. This is due to the fact that both the acquisition and demolition activities must meet a national objective. In this case, the demolition would have to meet the slum and blight national objective, either on an area basis (SBA) or a spot basis (SB), unless the demolition is integral to another activity that benefits lower-income persons, suc...
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Acquisition-Disposition-Demolition

If our community must acquire and dispose of a property, how can we meet a national objective under the CDBG program?

Once property is acquired, the grantee must either retain the property or dispose of it. CDBG recipients that hold the property must put it to an eligible use that meets a national objective within a reasonable period of time, because land banking is ineligible in CDBG. If the property is acquired for a public purpose and then sold, national objective compliance is determined based on the end use of the property. Some public uses that are eligibl...
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Acquisition-Disposition-Demolition

If property is acquired with CDBG funds, what kind of expenses are eligible at the time of disposition?

Real property acquired with CDBG funds may be managed and maintained as an eligible disposition expense, but such work must be limited in duration. Properties that have not achieved an end use within three to four years run the risk of monitoring or audit findings. Grantees or subrecipients may pay for ongoing maintenance of acquired properties, which could include repairs, utilities, yard work and similar expenses. CDBG funds may only be used to...
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Acquisition-Disposition-Demolition

What are some common ways in which properties are disposed in the CDBG program?

Grantees that think strategically may also dispose of property to other organizations, such as private developers. Here again, the disposition must lead to an eligible end use, such as affordable housing or low- to moderate-income (LMI) area benefit activities such as a park. Some private end uses that will likely qualify are: Sale or donation of lots to adjacent income-eligible property owners to ensure continued maintenance as side yards (LMH)...
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Acquisition-Disposition-Demolition

What if the housing or other use (LMI)-benefiting use that was planned for our CDBG activity does not materialize?

In such cases, the change of use rules apply, as described at 24 CFR 570.505 for entitlement grantees and 24 CFR 570.503(a)(7) for subrecipients. Change of use rules apply to real property acquired or improved using CDBG funds in excess of $25,000. Note that demolition costs are not counted toward the $25,000. For entitlement grantees, these standards apply from the date CDBG funds are first spent for the property until five years after closeout ...
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Acquisition-Disposition-Demolition

How do we ensure compliance with the change of use rules with our CDBG activities?

First, determine that the property originally met a national objective; if it never met a national objective, the costs are ineligible and all funds expended on the property must be reimbursed to the program. Second, if the property did meet a national objective, calculate whether the CDBG costs of acquisition and improvements exceeded $25,000. If lower than $25,000, the grantee may dispose of property with no further requirements. If over $25,00...
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Acquisition-Disposition-Demolition

What other requirements in addition to the CDBG regulations apply when real property is acquired under the CDBG program?

Pursuant to 24 CFR 570.606, CDBG grantees must follow the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA), as amended. The URA, passed by Congress in 1970, establishes minimum standards for federally funded programs and projects that require the acquisition of real property (real estate) or displace persons from their homes, businesses, or farms. The URA's protections and assistance apply to the acquisition,...
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Acquisition-Disposition-Demolition

Is there a requirement to do a financial analysis to determine the amount of CDBG funds to provide to a subrecipient for the acquisition of real property?

The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) requirement addresses value and the CDBG portion acknowledges the OMB requirement of cost reasonableness. CDBG regulations do not mandate a financial analysis, except that grantees must ensure that costs are reasonable. In addition, real property acquired with CDBG funds and real property acquired with other funds for a CDBG-funded project are subject to th...
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Acquisition-Disposition-Demolition

In a CDBG acquisition activity, do the environmental review requirements at 24 CFR Part 58 apply?

Under 24 CFR Part 58, the Responsible Entity (unit of local government) must determine the appropriate level of environmental review, ensure that the project complies with all applicable environmental laws and authorities, document any mitigation measures and conditions, and complete all required approvals. To determine the appropriate level of environmental review, all proposed or anticipated activities must be grouped together (24 CFR §58.32),...
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Acquisition-Disposition-Demolition

When disposing of a property purchased with CDBG funds, does the grantee need to ensure that the property will continue to meet a national objective?

Yes, the new use must meet a national objective or the program must be repaid. If a subrecipient is involved, the subrecipient agreement must specify the terms under which a national objective must be met. The CDBG regulations state that the project must meet a national objective until five years after expiration of the subrecipient agreement, or longer as required by the grantee. If the property ceases to meet a national objective during that te...
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Audits and Budgeting

When is a 2 CFR Part 200 audit or Single Audit required, and how much oversight is a grantee required to have over these audits?

A 2 CFR Part 200 audit is required if your organization expends more than $750,000 in federal funds during your fiscal year. CDBG grantees and subrecipients that expend $750,000 or more in a year in federal awards must have an audit conducted in accordance with 2 CFR Part 200, Subpart F—Audit Requirements except when they elect to have a program-specific audit conducted. A program audit is an audit of one federal program (such as CDBG). A progr...
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Audits and Budgeting

Can a city utilize CDBG contingency funds from previously awarded projects to incur or pay for Pre-Award costs as a method to get a jump-start on expending its entitlement funds, or does the source of the Pre-Award funding have to be city general revenue funds or some other non-federal funding source?

The Reimbursement for Pre-Award Costs provision is found in the Community Development Block Grant regulations at 24 CFR 570.200(h). Under this provision, before the date of the grant agreement, a grantee or their subrecipients may carry out a project using non-CDBG funds with the understanding that they may reimburse those non-CDBG funds from one or more future CDBG program grants. Grantees may use general funds or obtain a private loan to assist...
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Audits and Budgeting

We are currently working on a street reconstruction project where a contractor has signed an agreement to construct the project for the city. No construction work has started. Are we able to pay for materials in advance and store them at our public works yard or do we need to wait until actual materials are needed at the job site?

In order for the grantee to comply with 24 CFR 85.20(b)(7), grantees must have procedures in place to minimize the time elapsed between the transfer of funds from Treasury and disbursement by the grantee. You should have procedures in place to avoid time gaps between drawdowns and disbursement of funds and should make every attempt to make drawdowns as close as possible to the time of making the disbursement. It appears as if the project may be u...
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Audits and Budgeting

What rules govern unspent prior year income when reallocating in the next program year? Do the funds have to all go in housing community development or can they be split, within the caps between public service, administration and housing/community development?

Compliance with the public service and planning and administrative limits is calculated separately for each program year. For this purpose, a grantee includes program income in these calculations based on the program year in which the program income is received. Specific guidance for determining compliance with the public service and planning and administrative limits is included in the Community Development Block Grant Program - Guide to Nationa...
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Audits and Budgeting

Which source(s) did HUD use to calculate the individual categories (population size, poverty, & overcrowding) in determining the funding amounts for entitlement communities? For example, in FY12 they used the 2010 Census for population size and used the American Community Survey 2005-2009 Estimates for poverty and overcrowding.

For the poverty, overcrowding, and pre-1940 housing variables, HUD used the ACS 2007-2011 data. For the population and growth lag variables, HUD used the 2012 population estimates. HUD used the revised population estimate for communities that successfully challenged their population estimates with the Bureau of Census.

Audits and Budgeting
Audits and Budgeting

We want to charge activity delivery costs that were previously billed to CDBG administrative costs. Dowe need to update our annual Action Plan to show this budget change?

Please review your Citizen Participation Plan to determine if any budget changes (program administration vs. activity delivery) require an amendment to your Consolidated Plan / Annual Action Plan and act accordingly. Budgets for activity delivery and program administration cannot be combined in your Annual Action Plan or in IDIS. These activities have different regulatory citations for eligibility and national objectives and must be described sep...
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Audits and Budgeting

Should a city department that we fund with CDBG dollars have their own DUNS Number? Our Community Development Department has their own DUNS Number, but other city departments tend to use our DUNS Number.

In most cases, a Memorandum of Understanding (MOU) is the agreement between departments in the same City. So, if the department you are funding is part of the same legal entity, a separate DUNS number would not be required. However, if a legal agreement is executed between the Community Development Department and another department receiving a subaward of $25,000 or more of CDBG funds, the subaward must be reported in the FFATA Subaward...
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Code Enforcement

What is code enforcement for CDBG program purposes?

Code enforcement is a process whereby local governments gain compliance with ordinances and regulations regarding health and housing codes, land use and zoning ordinances, permitting, sign standards, and uniform building and fire codes in deteriorated or deteriorating areas in which such enforcement, together with public or private improvements or services to be provided, may be expected to arrest the decline of the area. Since, for CDBG program ...
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Code Enforcement

What costs may CDBG funds be used for in accordance with 24 CFR 570.202(c)?

CDBG funds may be used to pay salaries for code enforcement inspectors for the time spent conducting such inspections in CDBG-eligible areas (areas that meet the state/local definition of deteriorated/deteriorating). In addition, items needed to conduct such inspections such as coveralls to protect their clothing and hand-held electronic devices such as tablets are also eligible. Finally, legal proceedings such as hearings to address appeals of v...
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Code Enforcement

What CDBG national objective(s) does code enforcement activities meet under 24 CFR 570.202(c)?

There are three national objectives for the CDBG program: benefiting low-moderate income persons, removing slum and blight, and meeting urgent needs. The primary national objective used by grantees carrying out CDBG-assisted code enforcement is benefit to low- and moderate-income persons on an area basis [24 CFR 570.208(a)(1)]. Grantees may use the slum/blight area (SBA) national objective as well. However, because grantees are required to expend...
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Code Enforcement

Can CDBG funds be used to conduct code enforcement in any area where at least 51 percent of the residents are low- and moderate-income persons?

To be an eligible area for carrying out CDBG-assisted code enforcement, the area must be deteriorated/deteriorating in accordance with state/local law. Even if an area contains 51 percent low- and moderate-income persons, if it does not contain areas that meet a definition of deteriorated/deteriorating, then CDBG funds may not be used to conduct code enforcement in those areas. On the other hand, an area that is less than 51 percent low-and moder...
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Code Enforcement

What is considered a deteriorated/deteriorating area for CDBG program purposes?

The term is not defined in the statute or regulations governing the CDBG program. The CDBG program gives grantees the flexibility and latitude to use their own definitions and criteria when defining deteriorated/deteriorating. The grantee may use its state/local law definition of deteriorated/deteriorating or use the criteria at 24 CFR 570.208(b)(1) or 24 CFR 570.483(c)(1) to define deteriorated/deteriorating. The definition should have criteria ...
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Code Enforcement

Does HUD specify what (or how many) other activities the grantee must also carry out in eligible deteriorated/deteriorating areas in conjunction with CDBG-assisted code enforcement? Must those other activities be funded with CDBG?

While HUD does not specify what activities or how many other activities the grantees must carry out when conducting CDBG-assisted code enforcement, the regulations require code enforcement to be performed in conjunction with improvements, rehabilitation, or services. The Entitlement CDBG regulations at 24 CFR 570.202(c) state that code enforcement may be carried out with CDBG funds "...when such enforcement together with public or private improve...
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Code Enforcement

Must grantees have written strategies and plans in place to address code violations before using CDBG funds for code enforcement?

No. There is no regulatory or statutory requirement for grantees to have written strategies and plans in place to address code violations before carrying out CDBG-assisted code enforcement. However, having a written strategy in place may help a grantee ensure that it complies with all program requirements, by spelling out the definition of deteriorated to be used, how the grantee will identify eligible areas and their boundaries, what other progr...
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Code Enforcement

Are grantees required to assist property owners in addressing the code violations discovered during a CDBG-assisted code enforcement inspection?

No. There is no regulatory or statutory requirement for grantees to assist property owners with addressing code violations discovered during CDBG-assisted code enforcement inspections. The property owners are responsible for addressing the code violations and may request assistance from grantees to do so via the CDBG program or local government programs. Grantees have the discretion to determine what CDBG-assisted activities they will fund, and H...
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Code Enforcement

If CDBG funds will be used to carry out the improvements needed to address code violations, can those improvements be carried out under the code enforcement eligible activity at 24 CFR 570.202(c)?

No. The necessary improvements may be eligible under a different eligibility category, depending on the type of structure and the activity to be carried out. Improvements to a housing structure would be eligible at 24 CFR 570.202(a) or Section 105(a)(4) of the Housing and Community Development Act of 1974 (HCDA), as amended, if the low- and moderate-income housing national objective can be met. Improvements to a facility such as a recreation cent...
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Code Enforcement

Can CDBG funds be used to enforce codes relating to junk cars parked on streets, un-mowed lawns, graffiti on fences, flyers posted on telephone poles, etc.?

HUD would look askance at using CDBG funds to enforce local codes that deal only with such nuisances, without also addressing the physical conditions of buildings. HUD recognizes that issues like unkempt yards, accumulation of debris or junk cars, etc., can further contribute to the deteriorated appearance of a neighborhood. HUD also recognizes that local codes may be written to address a broader spectrum of local health, safety and appearance is...
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Code Enforcement

Can CDBG funds be used to pay the salaries of code enforcement inspectors that conduct inspections city- or county-wide?

It depends. CDBG funds may only be used to pay the salaries for code enforcement inspectors for the time spent conducting inspections in areas that meet the state/local law definition of deteriorated/deteriorating or use the criteria at 24 CFR 570.208(b)(1) or 24 CFR 570.483(c)(1) to define deteriorated/deteriorating. It is very unlikely that an entire city or county would be designated as deteriorated/deteriorating. In order to conduct CDBG-assi...
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Code Enforcement

Here is an example to help illustrate the question in FAQ 3638: If Grantee X's total code enforcement division budget is $5 million, and the grantee can show that 40 percent of all code enforcement inspections were performed in CDBG-eligible neighborhoods, can the grantee charge $2 million to the CDBG program?

No, unless the entire city or county meets a state/local definition of deteriorated/deteriorating or the city or county uses the criteria at 24 CFR 570.208(b)(1) or 24 CFR 570.483(c)(1) to define deteriorated/deteriorating, and the entire city/county can qualify as meeting one of three national objectives. Code enforcement activities are CDBG-eligible if carried out in areas that meet a state/local definition of deteriorated/deteriorating, but if...
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Code Enforcement

What are the additional requirements if grantees want to use CDBG funds to pay for coveralls and hand-held electronic devices to be used in its code enforcement activities?

Grantees may only use CDBG funds to purchase uniforms and/or coveralls if they are a job requirement for code enforcement inspectors and a regular jurisdiction-incurred expense. Coveralls and hand-held electronic devices may only be used by code enforcement inspectors when they are conducting CDBG-eligible code enforcement inspections. The items cannot be purchased with CDBG funds and used by code enforcement inspectors for code enforcement inspe...
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Code Enforcement

What requirements, if any, pertain to the use of CDBG funds for legal proceedings for CDBG-assisted code enforcement violations?

Legal proceedings costs such as the salaries of hearing officers and attorneys may only be paid with CDBG funds to address issues raised by the code enforcement inspections that were CDBG-assisted. Hearings are scheduled to ensure that property owners receive due process if they challenge the citation or fine assessed. CDBG funds may be used to pay the costs of the hearing. For example, the salaries of the hearing officers may be paid with CDBG f...
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Code Enforcement

Are there other staff and incidental costs of code enforcement that may be paid with CDBG funds?

Yes. The staff costs associated with processing and issuing the citations, collecting and processing the fines, and postage are all eligible activity delivery costs of CDBG-assisted code enforcement. Staff may include a clerk or another staff member that performs these activities. However, CDBG funds may only be used to pay staff costs for the time spent on these activities pertaining to CDBG-assisted code enforcement. Records must be kept to sho...
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Code Enforcement

Vehicles are often used by code enforcement inspectors for transportation from one site to another. May CDBG funds be used to pay for that vehicle?

The regulation at 24 CFR 570.207(b)(1) states that purchase of equipment with CDBG funds is generally ineligible. CDBG funds may be used to lease vehicles. In addition, 24 CFR 570.207(b)(1)((iii) states that CDBG funds may be used to purchase or pay depreciation in accordance with 2 CFR part 200, subpart E. Depreciation costs may be paid in accordance with 2 CFR 200.436 proportionate to the amount of time the vehicle is used for CDBG-assisted cod...
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Code Enforcement

Are code violation fines collected considered CDBG program income?

No because these funds do not meet the definition of program income as defined at 24 CFR 570.500(a). Rather, the fines should be treated as applicable credits or general revenue. Applicable credits are receipts or reductions of expenditure type transactions that offset or reduce expense items allocable to Federal awards. Applicable credits shall be credited to the Federal award (in this case, CDBG funds) either as a cost reduction or cash refund,...
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Code Enforcement

What records must grantees keep in their files to show that the CDBG-assisted code enforcement meets all CDBG program requirements?

At a minimum, grantees' files must contain: The definition of deteriorated/deteriorating used by grantees.  If the state/local law definition of deteriorated/deteriorating is used, a copy of the definition with the citation should be included. A description of the conditions of the areas in which CDBG funds are used for code enforcement, demonstrating that these areas meet the state local law definition of deteriorated/deteriorating or mee...
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Code Enforcement

Can CDBG funds be used to pay training costs for code enforcement inspectors?

Yes. CDBG funds may be used to pay for training costs so that code enforcement inspectors are kept up-to-date on changes in the code enforcement industry and maintain their professional credentials. Such costs are eligible under 24 CFR 570.202(c) and are considered activity delivery costs. However, note that the cost of obtaining a license is the responsibility of the employer and not an eligible CDBG expense.

Code Enforcement
Code Enforcement

How long is an area considered SBA eligible?

Under 570.208(b)(1)(iii), the designation of an area as slum or blighted under the Slum Blight Area (SBA) national objective is required to be reevaluated every ten (10) years for it to remain qualified. The requirements for meeting this national objective are under 570.208(b)(1).

Code Enforcement
Code Enforcement

I’m doing code enforcement on housing so why can’t it be eligible under LMH?

Under 570.208(a)(3) an activity is eligible only if it is carried out for the purpose of providing or improving permanent residential structures which, upon completion, will be occupied by low and moderate income households. Code enforcement as an activity does not provide such a direct benefit to the household. It is the correction of the code violation, such as rehabilitation, that directly benefits the household and would be eligible under the...
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Code Enforcement

When do I need to make sure the overall income benefit is documented?

Each grantee certifies over a specified period of time (one (1), two (2), or three (3) years), a minimum of 70% of CDBG funds shall be expended for activities benefitting low to moderate income persons. Code enforcement may count toward the overall benefit requirement if the national objective of low and moderate area (LMA) is used. When code enforcement activities are undertaken under the slum and blight area (SBA) or urgent need national object...
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Code Enforcement

There is one particularly large building in the center of a neighborhood that has become an eyesore. Can we use CDBG to conduct code enforcement on it?

Yes. As long as the building is within the designated deteriorated or deteriorating area and the code enforcement is performed in conjunction with planned improvements, rehabilitation, or services to the area.

Code Enforcement
Code Enforcement

Can we do code enforcement on commercial and industrial buildings? What about vacant lots?

Code enforcement and inspections may take place in primarily residential areas and will allow enforcement activities for commercial and industrial buildings, as well as vacant land within the designated deteriorated or deteriorating area as long as the activity is able to meet the low to moderate income area (LMA) national objective and code enforcement is performed in conjunction with planned improvements, rehabilitation, or services to the area...
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Code Enforcement

Can the code enforcement activity be used to pay for a neighborhood cleanup?

Under 570.202(c) a neighborhood cleanup would not be eligible as a code enforcement activity. This activity may be CDBG eligible as an improvement or service to the community if undertaken by a non-profit as a public service under 570.201(e).

Code Enforcement
Code Enforcement

Can I use the code enforcement activity to help low income homeowners correct their code violations?

Under 570.202(c) the costs of correcting the code violations are not eligible. The eligible activity of rehabilitation (570.202(a) and (b) and Section 105(a) (4)), however, can be used to correct code violations.

Code Enforcement
Code Enforcement

A hurricane caused a great deal of damage in our community but not enough to receive a Presidential declaration.Can I still consider this an urgent need?

Code enforcement may meet the urgent need national objective if the grantee is able to certify the following: The buildings inspected pose a serious and immediate threat to the health and welfare of the community. The disastrous occurrence is of a recent origin (within 18 months before the grantee’s certification), or the disastrous occurrence recently became urgent.  The grantee is unable to finance the activity on its own and no other f...
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Code Enforcement

My county inspection staff went to a training and came back saying CDBG was eligible to pay their salaries and operating costs. Is this true?

The salaries and expenses of the county inspection staff may be eligible costs if they are carrying out code enforcement and inspections in CDBG-eligible areas. As the grantee you must be able to document CDBG funds are not being used for general government expenses and instead can be directly associated with code enforcement in primarily residential deteriorated or deteriorating areas where the enforcement, together with public or private improv...
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Code Enforcement

When can I use CDBG funds for code enforcement?

Under 570.202(c) code enforcement must be undertaken in conjunction with improvements, rehabilitation, or services with the purpose of ensuring the deteriorated or deteriorating areas are not detrimental to public health and safety. Code enforcement activity may take place in residential, commercial, or industrial areas.

Code Enforcement
Code Enforcement

What is HUD’s definition of code enforcement?

For Entitlements, HUD’s definition of code enforcement can be found under 24 CFR 570.202(c). The definition is stated as: Costs incurred for inspection for code violations and enforcement of codes (e.g. salaries and related expenses of code enforcement inspectors and legal proceedings, but not including the cost of correcting the violations) in deteriorating or deteriorated areas when such enforcement together with planned public or private imp...
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Consolidated Plan

What if an entitlement does not want to administer its CDBG program, what are the options?

The entitlement city of Apple (the city) does not want to administer its Community Development Block Grant (CDBG) program. It is not sure how to proceed. What are the options available to Apple? The entitlement city may contract with a nearby unit of government (city, town, county, state agency, council of governments, etc.) to run its CDBG program on its behalf. The city may also contract with another unit of government to run specific component...
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Consolidated Plan

What are the types of agreements that the entitlement city in FAQ 3540 would have to enter with other entitlement cities/towns and urban counties?

If the city is entering into an agreement with another entitlement to administer its CDBG program, it may enter into a Memorandum of Understanding, subrecipient agreement, or interlocal agreement that details the scope of work, budget, timeframe, etc. While not required by 2 CFR Part 200 regulations, the city could formally procure the services of the other jurisdiction(s). Apple must still have a written agreement and must still oversee the othe...
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Consolidated Plan

If the city decides to have Entitlement B administer its CDBG program, is there a limit on how long such an agreement can be in effect?

No. There is no limit on how long an MOU or contract between Entitlement B and the city can be.

Consolidated Plan
Consolidated Plan

If the city decides to enter a joint agreement with the urban county or join the county as a participating unit of general local government via a cooperation agreement, is there a limit on how long those agreements can be in effect?

Yes and no. For joint agreements and cooperation agreements, there can be an renewable clause therein stating the agreements automatically renew. This is unless the city notifies the urban county during its year of requalification it no longer wants to have a joint agreement with the county or opts out of the county as a participant in its CDBG program. Note that the city may opt out of the urban county or terminate its joint agreement only durin...
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Consolidated Plan

What certifications are required upon submission of the Consolidated Plan (Con Plan) or annual action plan?

The consolidated plan certifications required by a jurisdiction can be found at §91.225 (local governments), §91.325 (States) and §91.425 (HOME Consortia). The specific certifications required are determined by whether a jurisdiction is a member of a HOME consortia, a state entity or a local government. The following chart highlights the general certifications required by each type of jurisdiction. General Certification Local Jurisdiction ...
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Consolidated Plan

Is it OK if the Consolidated Plan General Certification combines the acquisition/relocation and the anti-displacement and relocation certifications into one document?

Yes. However, grantees should note even though each certification requirement is combined in a single certification document, they are still separate regulations and HUD will review them as separate items.

Consolidated Plan
Consolidated Plan

Are original signatures required on the Consolidated Plan certifications and SF-424s?

Yes. HUD still requires original ink signatures on all certifications and SF-424s. Grantees must submit all original executed certification to HUD directly.

Consolidated Plan
Consolidated Plan

Will HUD accept electronic signatures on the SF-424 and certifications?

No. HUD will not accept electronic signatures on certifications and SF-424s. HUD still requires original ink signatures on all certifications and SF-424s.

Consolidated Plan
Consolidated Plan

Can Consolidated Plan Certifications be attached to the plan and sent in through the e-Con Planning Suite?

No. A grantee must submit all original executed certifications to HUD directly. This is because HUD requires original signatures on all certifications and SF-424 documents. Scanned copies of signed certifications can be attached in the AD-25 screen of the e-Con Planning Suite for informational purposes only and are not considered to be official submissions.

Consolidated Plan
Consolidated Plan

Can HUD reject my Consolidated Plan because it is missing certifications?

Yes. The regulations at 24 CFR 91.500(b) state that HUD may disapprove a plan as substantially incomplete due to missing certifications.

Consolidated Plan
Consolidated Plan

When is the Consolidated Plan considered to be officially submitted?

A Consolidated Plan is considered officially submitted when the HUD field office receives 1) all executed original SF-424s; 2) all required executed original certifications; and 3) the email notification that the Con Plan or annual action plan has been submitted in IDIS. HUD's 45-day review period begins when the last item is received by the field office. This could include the executed original SF-424s, the required executed original certificat...
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Consolidated Plan

Which version of the Application for Federal Assistance, also known as the SF-424 form, should I use?

The most updated version of the Application for Federal Assistance, or SF-424 form, may be found at www.grants.gov. Select the Forms tab then select the SF-424 Family version. The most recent SF-424 form will be found near the top of the list of forms, OMB #4040-0004.

Consolidated Plan
Consolidated Plan

Should an SF-424 form be submitted for each grant?

Yes. Grantees should submit one original executed SF-424 Form for each CPD grant the jurisdiction receives (CDBG, ESG, HOME, HOPWA, HTF).

Consolidated Plan
Consolidated Plan

Where can I find instructions on how to complete the SF-424 Form?

Instructions on how to complete the SF-424 form can be found at www.grants.gov. Select the Forms tab; then select Form Instructions. Click on SF-424 Instructions. Instructions to complete the SF-424 form are provided.

Consolidated Plan
Consolidated Plan

What is the Applicant Identifier on the SF-424 Form?

The Applicant Identifier (Item 4) is the number assigned by HUD to the grantee for the grant program. For example, B-12-DN-03-0014 is considered as an applicant identifier.

Consolidated Plan
Consolidated Plan

Where do I find the most recent version of the certifications?

The most recent version of certifications can be found on the Consolidated Plan Guides, Tools, and Training page.

Consolidated Plan
Cost Reasonableness

What is the eligible use of CDBG funds for costs associated with staff who are on leave due to the closure of the grantee or subrecipient's office, and the costs of the grantee or subrecipient's unused or partially utilized space in response to COVID-19?

Cost Reasonableness

When completing the SF-425 line 10a Cash Receipts should I include the total amount of funds received through IDIS drawdowns for the reporting period, including both EN and AD fund types? Or should I only include EN funds?

Notice CPD-12-012: Submission of Federal Financial Report Standard Form 425 provides guidance for the Entitlement Communities, Insular Areas, and Non-Entitlement Counties in Hawaii under the Community Development Block Grant (CDBG) program on the submission of the Federal Financial Report. The amount of funds received through IDIS drawdowns from the beginning of the reporting period through the end date of the reporting period plus the cash on ha...
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Cost Reasonableness

What is the time frame in which we must disburse advanced funds to our subrecipients for eligible program expenses? Is it once CDBG funds are drawn down and wired to our county treasurer? How do we handle the funds if that time frame has elapsed?

Disbursement of funds must occur in a timely manner. The general rule is that CDBG funds must be used within three business days they are drawn down. If disbursement takes longer than three business days, written justification should be maintained in the files. Funds drawn down erroneously must also be returned to HUD in a timely manner. Per 24 CFR Part 85.21(b) / [2 CFR 200.305(b)] [also referenced at 24 CFR 570.502(b)(3)(i)], recipients and sub...
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Cost Reasonableness

24 CFR Part 85.21(f)(1) says to disburse interest earned on RLFs. Does this refer to the interest earned on the RLF account from the banking institution or the interest received from the loan repayment (program income)?

Each revolving loan fund's (RLF) cash balance must be held in an interest-bearing account, and any interest paid on CDBG funds held in this account is considered interest earned on grant advances and must be remitted to HUD for transmittal to the U.S. Treasury no less frequently than annually. Reference 24 CFR 570.500(b). This is not considered program income. [Reference: 2 CFR 200.80, Program Income] The payment of principal and interest on loan...
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Cost Reasonableness

At what hourly rate is donated, unskilled labor valued in the context of resources leveraged with CDBG funds?

The CDBG Program does not have a specific requirement for match or for leverage and has not defined the rate at which donated labor should be valued. The HOME Program has long used a rate of $10.00 per hour as its established rate for unskilled donated or voluntary labor. Labor from community groups, nonprofits (i.e., Habitat for Humanity's sweat equity program), friends, neighbors, corrections work crews, or federal job training programs such as...
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Cost Reasonableness

What is considered to be adequate documentation when funds are paid through an automated clearing house instead of a paper check or draft? Is a "screen shot" of our internal system indicating the vendor name and vendor number, purchase order number, and the amount sufficient support documentation in the event of a HUD Financial Audit?

HUD, like all other federal agencies is looking at digital documentation. You should work with your Field Office financial staff to determine whether the documentation you have is sufficient to show "proof of payment". However, even if that is determined to be sufficient, you are still required to maintain support documentation such as time sheets (# number of hours, rate of pay and benefits ties to the CDBG activity), invoices / proof of payment...
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Cost Reasonableness

Is there a deadline date for returning interest earned?

If your account earned interest on advances of CDBG funds, all but $500 for eligible administrative costs must be remitted to the U.S. Treasury promptly, but not less than quarterly, per 24 CFR 85.21(i) / [2 CFR 200.305(b)(9)]. In addition, interest earned on revolving fund balances must be remitted to U.S. Treasury no less than annually as stated as 24 CFR 570.500(b).

Cost Reasonableness
Cost Reasonableness

Where are the regulations that pertain to the disposition of assets purchased with CDBG funds?

The applicable CDBG regulation is at 24 CFR 85.32, Equipment / [2 CFR 200.313, Equipment]. 24 CFR 85.32(e) / [2 CFR 200.313(e)] pertains to the disposition of equipment by the grantee or subrecipient. 

Cost Reasonableness
Cost Reasonableness

When are funds for a project in our annual action plan considered to be obligated? Is it when the sub-grantee agreement with that municipality is executed or when the actual construction contract is signed by the municipality and the street contractor?

The Administrative Requirements for Grants and Cooperative Agreements to State, Local and Federally Recognized Indian Tribal Governments (24 CFR Part 85) / [2 CFR Part 200] which is applicable to the CDBG Program, includes the following definition: Obligations mean the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the grantee duri...
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Housing Counseling

If a housing counseling activity is administered in compliance with the requirements of this housing counseling certification rule, does that mean the activity will no longer be subject to the Community Development Block Grant (CDBG) program’s 15% cap on public services activities?

No. The Final Rule will not affect what activities are eligible as a public service and thus subject to the public services cap. The same housing counseling activities currently included under the public services cap will continue to be included under the cap when the housing counseling certification rule is implemented. The only difference will be that housing counseling (as defined at 24 CFR 5.100) will need to be conducted by HUD certified hou...
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Housing Counseling

My agency administers a Community Development Block Grant (CDBG)-funded activity that we have called housing counseling, but it is not as comprehensive/individualized as is defined in 24 CFR 5.100. Must we change our program to comply with the new housing counseling certification rule, as of August 1, 2021, the final compliance date for certification? Must we discontinue our program if it doesn’t comply? Or can we continue the program as currently designed?

A CDBG or CDBG Disaster Recovery (CDBG-DR) grantee still has the flexibility to design activities to meet its locally identified needs. The Final Rule does not mandate that anything previously characterized as “housing counseling” must now either meet the new requirements or stop receiving CDBG funds. (However, there is one exception: if a recipient is funding housing counseling under 24 CFR 570.201(k), Housing Services, in support of a HOME-...
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Housing Counseling

How do I determine if what my agency does under Community Development Block Grant (CDBG) or Community Development Block Grant – Disaster Recovery (CDBG-DR) is housing counseling as defined at 24 CFR 5.100?

If the agency is providing independent, expert advice customized to the need of the consumer to address the consumers’ housing barriers and achieve their housing goals (that includes an intake, financial and housing affordability analysis, an action plan, and a reasonable effort to have follow-up communication with the client when possible), then this is housing counseling as defined at 24 CFR 5.100, and the housing counseling must be provided ...
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Housing Counseling

The Community Development Block Grant (CDBG) and Community Development Block Grant – Disaster Recovery (CDBG-DR) are listed in the certification rule as “HUD Programs where housing counseling is funded under the HUD program.” How are the CDBG and CDBG-DR programs affected by the Final Rule on housing counselor certification?

Housing counseling is an eligible activity under several different categories of activities in the CDBG and CDBG-DR programs. Depending on the program design and the intended beneficiaries, housing counseling may be eligible as a public service (under 24 CFR 570.201(e)), as part of a homeownership assistance activity (24 CFR 570.201(n)), or as a housing service in support of the HOME program (24 CFR 570.201(k)). If a recipient uses CDBG or CDBG-D...
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IDIS

How should CDBG grantees enter homeownership assistance activities in the Integrated Disbursement and Information System (IDIS)?

The grantee may choose to enter all homeownership activities under one IDIS activity number or each one under a separate IDIS activity number. The grantee has the discretion to choose the method it prefers. However, there must be an address entered for each assisted unit in an IDIS activity.

IDIS
IDIS

Does HUD have any rule for setting up CDBG activity and reporting activity delivery costs (ADC) in IDIS?

Yes. HUD has policies and procedures for setting up activities and reporting activity delivery costs (ADC). The following provides guidance on how to set up activity and report ADC in IDIS for different types of major CDBG activities. 1. Acquisition and Disposition: When setting up acquisition and disposition activities in IDIS, grantees should set up one activity for each property assisted. Each activity must have the address of the property ass...
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IDIS

Does our organization need to submit a separate Cash on Hand report in IDIS for each of our open CDBG grants?

The Cash on Hand report should be completed for all of the grantee's CDBG grants combined.

More information about the PR29 CDBG Cash on Hand report is available in the Instructions for the IDIS Cash on Hand Quarterly Report

IDIS
IDIS

For CDBG multi-unit housing rehabilitation activities, if the rehabilitation involves multiple structures under common management, can a grantee set up all the addresses under one activity?

According to 24 CFR 570.208(a)(3), "If two or more rental buildings being assisted are or will be located on the same or contiguous properties, and the buildings will be under common ownership and management, the grouped buildings may be considered for this purpose as a single structure." When activities fit this description, yes, the grantee may set up all the addresses under one activity. However, if multi-unit projects are under different owne...
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IDIS

Our organization is trying to submit the CDBG Cash on Hand report, but IDIS will not allow for a negative dollar amount to be submitted. How do we submit with a negative amount?

The Cash on Hand report should not include any local non-CDBG funds (such as those used to pay for CDBG expenses before reimbursement is received through IDIS drawdowns), and therefore the report should not have negative amounts. The report should be reflective of only the CDBG funds that were received, returned, or disbursed during the quarter period of the report. More information about the PR29 CDBG Cash on Hand report is available in the Inst...
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IDIS

Our organization received an automatic email from IDIS regarding a flagged CDBG activity. Why were the individuals on the email included?

The CDBG Review Activities process sends emails accordingly: Sends email to the Grantee CDBG First contact [Grantee/PJ page] Sends email to the Grantee CDBG Second contact [Grantee/PJ page] Sends email to any Grantee user with the CDBG 'Set up Activity' user privilege Sends email to any Grantee user with the CDBG 'Update Activity' user privilege A grantee local IDIS administrator can edit user privileges and/or update the CDBG First and Second ...
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IDIS

Our program is making ADA improvements in public spaces throughout the city. How do I set this up in IDIS?

Each public facility or improvement should be set up as a separate activity in IDIS. If a facility serves an individual client group, use the matrix code assigned for that group (e.g. 03A for senior centers). If a facility serves multiple clients of groups without a designated matrix code, assign the matrix code for the type of public facility (e.g. 03E for neighborhood facilities). More information about reporting accomplishments for public faci...
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IDIS

Our staff works with subrecipients that carry out public facility improvements throughout the city. Can we set up a separate activity to cover those delivery costs?

No, unlike housing rehab programs (e.g. using matrix code 14H), delivery costs should be allocated to the specific activity set up for each individual public facility. More information about reporting accomplishments for public facilities activities in IDIS is available in the IDIS Online for CDBG Entitlement Communities Manual or the IDIS Online for State CDBG Grantees Manual ...
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IDIS

We already used 15% of program income (PI) for public services activities. We still have some program income on hand. Our current invoices are for other public service activities. Should we draw CDBG grant funds to pay these invoices?

The grantee should draw more program income for the public service activities. The grantee needs to use program income first to comply with 24 CFR 570.504(a)(2)(ii). The amount of CDBG funds obligated/expended* within a program year to support public service activities may not exceed 15% of the total grant awarded to the grantee for that year plus 15% of the total program income it received in the preceding program year. This cap on public servic...
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IDIS

We ran a PR56 after submitting our last voucher, but the current CDBG draw ratio and the Line Of Credit (LOC) balance did not change. What did we do wrong?

Please note the reporting module in Integrated Disbursement and Information System (IDIS) does not operate on a "real-time" basis; changes are made overnight. Thus, reports only capture changes to the system on the next business day. Even so, vouchers may take longer to process. A good rule of thumb is to run an updated PR56 Report two days after submitting a voucher to see the new draw ratio and LOC balance.

IDIS
IDIS

What are some ways for a CDBG grantee to check its timeliness on a regular basis?

A grantee should draw down funds from its LOC on a regular, periodic basis commensurate with cash needs, to ensure consistent bill payment. Each time the grantee submits a voucher in IDIS, for instance, it can run a PR56, CDBG Timeliness Report, which will provide the most updated draw ratio and Line of Credit (LOC) balance in the Line of Credit Control System (LOCCS).

IDIS
IDIS

What happens in IDIS when a CDBG grantee misses a Section 108 repayment?

Failure to remit the Section 108 payment seven (7) days prior to the due date constitutes a permissible basis for HUD to declare the Section 108 Guaranteed Loan in default. When a grantee does not make a timely payment on its Section 108 Guaranteed Loan, the CDBG grant funds are deducted from its line(s) of credit to pay amounts due on the Section 108 Guaranteed Loans. The deduction is processed in IDIS as a draw voucher, entitled Manual Payment,...
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IDIS

What IDIS reports would be helpful in assembling information for the CDBG Cash on Hand report?

The CDBG Cash on Hand Report should display only the CDBG funds that were received, returned, or disbursed during the quarter, and therefore you can use IDIS reports to assist in completing the information. Some reports that would be helpful are the PR07 for drawdowns, and the PR09 for Program Income and other local CDBG accounts such as Revolving Loan (RL) and Grant-Specific Repayment to Local Account (LA) funds receipted and drawn. More informa...
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IDIS

What privileges does an IDIS user need to submit the CDBG Cash on Hand report in IDIS?

CDBG grantee users who have rights to request or approve drawdowns may access the "view/submit Cash on Hand" screen by clicking on "Grant" > "Cash on Hand."

For instructions on how the local IDIS administrator can make updates to user privileges in IDIS, please see the How does a local IDIS administrator update a user's privileges? FAQ on the HUD Exchange.

IDIS
IDIS

Why do I see negative balances under Activity #2 on my PR02 report?

If there are balances under Activity #2, positive or negative, log into IDIS and search vouchers for Activity #2. Activity #2 is essentially the repository for CDBG funds adjustments. For example, when a grantee returns funds to its line of credit due to ineligible uses of CDBG grant funds for CDBG activities, those returned funds show up in Activity #2 as a negative draw (collection), and the grantee then transfers those funds to the original a...
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Income Determination

Can self-certifications of income be used in the CDBG Program to document that an activity has helped low- and moderate-income persons?

Yes. Income self-certifications are permissible pursuant to 24 CFR 570.506(b), but their use is generally limited to documenting beneficiary income for public service activities and even more limited when there is a direct financial benefit (e.g., day care subsidy, rental security deposit, etc.). Self-certifications are not intended to be used with housing and other direct-benefit activities, such as down payment assistance, where significant fin...
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Income Determination

What type of CDBG public services are better suited to the use of self-certifications?

Self-certifications are generally intended to be used for CDBG eligible activities where there is not a direct financial benefit to the recipient, the service is minimal, or there is only an indirect benefit, such as access to after-school programs for low- or moderate-income children.

Income Determination
Income Determination

Do CDBG self-certifications need to be checked for accuracy? Or do we just take the beneficiary on his or her "word?"

The CDBG regulation states that the recipient, meaning the grantee, can "substitute a copy of a verifiable certification from the assisted person that his or her family income does not exceed the applicable income limit established in accordance with §570.3..." "Verifiable," therefore, means that it can be and is subject to being checked for accuracy. The self-certification form should also contain a statement above the signature line that notif...
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Income Determination

How do we go about verifying CDBG self-certifications? Do we need to verify all self-certifications submitted?

HUD recommends source documentation be requested from the CDBG beneficiary for 20% of the certifications. The beneficiary should also be informed that all sources of income and assets must be included when calculating annual income, depending upon the specified definition of the CDBG grantee (e.g., Part 5 (24 CFR 5.609), or the IRS definition. Depending on local policies and procedures, the grantee or subrecipient would review verifiabley income ...
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Income Determination

Is the 20% threshold for verifications of CDBG self-certifications a hard and fast rule?

It is only a recommendation. HUD encourages CDBG grantees to establish their own policies and procedures for implementing a self-certification program. HUD recommends that grantees' local policies and procedures are consistent across similar types of CDBG-funded activities (e.g. for all public services that provide indirect financial assistance to beneficiaries).

Income Determination
Income Determination

What are some issues to consider in establishing a CDBG self-certification policy?

Local discretion is important to implementing a CDBG self-certification program because only the grantee can know all the circumstances and risk factors that must be considered in setting up such a program. The flexibility a grantee exercises regarding the 20% sampling recommendation can be a function of several things. For instance, if the grantee is considering a policy for a non-profit subrecipient or a government agency, how comfortable is it...
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Income Determination

What about one-time benefits provided at a food bank or a community event where the provider will likely never make contact again with a participant? How are those CDBG self-certifications verifiable?

Many times, it is impractical, if not downright impossible, to secure income verification from the beneficiaries of certain CDBG activities. This is particularly true of public service activities, like food banks, where donated food is made available for individuals and families, often have little or no ongoing client relationship between the beneficiary and the provider. Grantees must use their best judgment in funding agencies providing these s...
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Income Determination

If one of our public service activities is monitored by HUD and a sample of verifiable income documentation is not available, will this result in a finding?

The percentage of self-certifications for which a grantee has back-up verifiable income documentation, though recommended to be 20%, is ultimately a function of several factors, as noted above. A discovery of no verifiable income documentation available on any sample taken, however, may be a concern or a finding and warrant further investigation, depending on the nature of the activity and the factors discussed above. Missing or incomplete docume...
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Neighborhood Revitalization Strategy Area

What are Neighborhood Revitalization Strategy Areas (NRSAs)?

A Neighborhood Revitalization Strategy Area (NRSA) is a Community Development Block Grant (CDBG) grantee-designated area targeted for revitalization. An NRSA is different from other local targeted areas in that the designation is reviewed and approved by HUD. In return for the designation, grantees are afforded enhanced flexibility in undertaking economic development, housing and public service activities with their CDBG funds.

Neighborhood Revitalization Strategy Area
Neighborhood Revitalization Strategy Area

What is the purpose of an NRSA?

NRSAs are intended to revitalize a targeted neighborhood by encouraging a coordinated approach through comprehensive place-based efforts. By targeting an area, CDBG grantees have the opportunity to stimulate investment and empower low-income residents in distressed neighborhoods.

Neighborhood Revitalization Strategy Area
Neighborhood Revitalization Strategy Area

How can a community benefit from an NRSA?

A community will benefit from a comprehensive place-based approach by using CDBG dollars to leverage additional funding for the neighborhood. An NRSA designation encourages and requires extensive community consultation and participation in revitalization efforts. Grantees also receive enhanced flexibility when undertaking economic development, housing and public service activities when using their CDBG funds. Regulatory relief and greater flexibi...
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Neighborhood Revitalization Strategy Area

What is an example of a project where housing units can be aggregated?

A grantee wants to encourage homeowners to remain in the neighborhood and offers a homeowner rehabilitation program. During the program year, 50 homes are rehabilitated within the NRSA. Using the flexible benefit of aggregating housing units, the grantee will only need to document that 26 of these units were owned by low to moderate income homeowners, rather than all 50.

Neighborhood Revitalization Strategy Area
Neighborhood Revitalization Strategy Area

What is an example of using the LMA national objective for job creation in an NRSA?

A grantee would like to increase jobs in the designated NRSA and offers incentives to a business to expand to an existing building in the neighborhood. Within the NRSA, the activity may be qualified under the low- and moderate-income area benefit (LMA) national objective criteria. As a flexible benefit, the business and grantee will need to report the number of full time jobs created but will not need to collect income information on every person...
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Neighborhood Revitalization Strategy Area

What is an example of an activity that exempts the aggregate public benefit standards?

The grantee operates a small business loan program for the purpose of creating new jobs. The amount of funding a grantee commits to any individual business cannot exceed $50,000 per job. Under the aggregate public benefit standard, all the business loans the grantee makes during any given program year need to, in essence, average out to no more than $35,000 per job. Several of the loans to businesses in the grantee's NRSA will cost well over $35,...
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Neighborhood Revitalization Strategy Area

What is an example of an activity that may be exempt from the public service cap?

A grantee would like to increase the employment rate in the neighborhood and offers a job readiness and interview skills training program. The grantee contracts with a CBDO to carry out the activity to serve 150 residents. The activity aligns with the housing and economic opportunities identified in the NRSA plan. In the grantee's Consolidated Annual Performance and Evaluation Report (CAPER), this activity is excluded from the tabulation of activ...
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Neighborhood Revitalization Strategy Area

When can a grantee request an NRSA?

A CDBG grantee may submit an NRSA strategy at any time. However, an NRSA is most effective when tied to a consolidated plan cycle. A grantee submitting an NRSA strategy in the middle of a consolidated plan cycle will also need to amend its plan to incorporate the targeted area. Prior to submission, grantees are encouraged to collaborate with HUD's field office staff prior to submission.

Neighborhood Revitalization Strategy Area
Neighborhood Revitalization Strategy Area

Can a grantee have more than one NRSA?

Yes. A CDBG grantee may have more than NRSA. Since an NRSA is neighborhood focused, it may be advisable to reduce the size of the NRSA or to divide an area into smaller NRSAs to increase the likelihood of achieving meaningful change. The grantee must submit NRSA strategies for each smaller area.

Neighborhood Revitalization Strategy Area
Neighborhood Revitalization Strategy Area

What is required for designation of an NRSA?

There are three primary areas for the NRSA designation: A grantee must define a geographical area that comprises a neighborhood that is primarily residential and contains a percentage of low- and moderate-income residents that is 70% or equal to the community's "upper quartile percentage" Documentation of consultations with community members and stakeholders An assessment of the housing market and economic conditions of the area and a comprehens...
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Neighborhood Revitalization Strategy Area

How will HUD review and approve NRSA applications?

The HUD field office will review the NRSA strategy for stakeholder involvement, performance measures, housing and economic opportunities planned, level of coordination with partners, ability to leverage funding, and the variety of activities and funding sources incorporated into the strategy. HUD will not look favorably upon strategies that focus exclusively on using only one NRSA incentive, such as the exception to the cap on public services, or...
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Neighborhood Revitalization Strategy Area

How long does the NRSA designation last?

An NRSA designation is in effect for up to five years. Grantees may apply for a renewal after the first five years. However, HUD approval will be based upon demonstrated progress made toward the strategy. At the end of each program year, HUD will review the grantee's progress on measurable outcomes. If the Department determines that progress towards achieving the expected improvements in the area is lagging substantially behind the projections, H...
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Neighborhood Revitalization Strategy Area

What performance measurements does HUD expect to see in a proposed NRSA strategy and how will these be assessed?

The grantee should identify achievable outcomes for the NRSA, particularly with respect to housing and economic opportunities, that can be measured and used to determine progress made. Outcomes may include such factors as higher homeownership rates; a reduction in vacancy rates; a rise in housing values; an increase in educational attainment; an increase in employment rates; and an increase in median household income. For each selected outcome, ...
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Neighborhood Revitalization Strategy Area

How can an NRSA fit into an existing local target area approach or designation?

An NRSA can complement or even focus more closely on existing target areas in the community. An NRSA can exist within or alongside an established service area, adding emphasis and extra tools to enhance the chances of success.

Neighborhood Revitalization Strategy Area
Neighborhood Revitalization Strategy Area

Can a Choice Neighborhood also be an NRSA?

A CDBG grantee with a designated Choice Neighborhood may request automatic NRSA designation. Choice Neighborhoods Implementation Grantees must be actively implementing their Transformation Plan. Choice Neighborhoods Planning Grantees must have completed their Transformation Plan. HUD's Office of Public and Indian Housing will confirm the Choice Neighborhood's status and barring any inconsistencies, HUD-CPD will presume that these areas have met t...
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Neighborhood Revitalization Strategy Area

Can a Promise Zone also be an NRSA?

Promise Zones are often larger than a single neighborhood; however, a Neighborhood Revitalization Strategy Area may be located within a portion of a designated Promise Zone. To request that a portion of the Promise Zone area also receive NRSA designation, the grantee should submit the NRSA proposed boundaries and demographic information for HUD review. Promise Zones located within a jurisdiction actively implementing comprehensive community revit...
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Neighborhood Revitalization Strategy Area

Can an Empowerment Zone (EZ), Renewal Community (RC) or Enterprise Community (EC) also be NRSA?

All federal Empowerment Zone (EZ) and Renewal Community (RC) designations expired on December 31, 2009. All Enterprise Community (EC) designations expired in 2004. In the past, HUD presumed the strategic plan for an EZ or EC within an Entitlement community met the above criteria and, therefore, approved an initial NRSA submission at the written request of the grantee without further review. Due to the age of these designations, HUD no longer acce...
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Neighborhood Revitalization Strategy Area

How will HUD assess the performance of an NRSA?

HUD does not mandate that a CDBG grantee set aside a specific amount or percentage of assistance that must be provided but does expect that the community will dedicate sufficient resources to make a noticeable difference. NRSAs should improve the housing and economic conditions in the area, along with physical and social outcomes. The community should plan wisely and not overstate goals, since progress will be measured against stated targets. For...
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Neighborhood Revitalization Strategy Area

Must the grantee set aside a specific percentage or dollar amount of its CDBG allocation for NRSA?

HUD does not mandate that a CDBG grantee set aside a specific amount or percentage of assistance that must be provided but does expect that the community will dedicate sufficient resources to make a noticeable difference. NRSAs should improve the housing and economic conditions in the area, along with physical and social outcomes. The community should plan wisely and not overstate goals, since progress will be measured against stated targets. For...
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Neighborhood Revitalization Strategy Area

Can a state or a state grant recipient undertake an NRSA?

States and state subgrantees cannot designate NRSAs but can instead establish Community Revitalization Strategy Areas (CRSA). See the following CPD Policy Notice CPD-97-1, which is being updated, but still valid.

Neighborhood Revitalization Strategy Area
Overall Benefit

A grantee expends close to 100% of its CDBG grant on activities that benefit low- and moderate-income persons in a single year. Why would a grantee want to pick a multi-year certification period? Are there advantages to selecting a multi-year certification period?

The grantee may want to select a multi-year certification period to carry out a large CDBG-assisted activity that will meet either the slum/blight or urgent need national objectives. One advantage is that a two- or three-year certification period will give the grantee a larger dollar amount to expend on activities that do not meet the low/moderate income benefit national objective versus having a one-year certification period. In addition, if the...
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Overall Benefit

A grantee wants to change its overall benefit certification period from one year to three years because it wants to carry out a large activity under the slum/blight area national objective. However, the one-year certification has not expired, since the grantee is only halfway through its current program year. What should the grantee do?

If a CDBG grantee wants to change its overall benefit certification period, and the current certification period has not expired, it must request a waiver of 24 CFR 91.225(b)(4)(ii). The waiver must be requested before the circumstances requiring the change in overall benefit certification period occur.

Overall Benefit
Overall Benefit

Are CDBG grantees required to certify that they will meet the overall benefit requirement?

Yes. This requirement is found at Section 104(b)(3)(A) of the HCDA and 24 CFR 91.225(b)(4)(ii).

Overall Benefit
Overall Benefit

Are there any CDBG funds excluded from the overall benefit computation?

Yes. CDBG planning and administration costs eligible under 24 CFR 570.205 and 570.206 are excluded from the overall benefit computation. Planning and administration costs are not included when determining compliance with national objectives, including the low- and moderate-income benefit national objective, because these costs are considered to benefit the CDBG program as a whole.

Overall Benefit
Overall Benefit

At the time of CDBG grant application, what certifications should grantees submit to HUD when they have a multi-year certification period?

Referencing the example in FAQ 3513, for 2014, the CDBG grantee would submit its certification for the three-year period (2014, 2015, 2016). In 2015 and 2016, the grantee would submit the same certification, listing the same years, for each of those years' action plans. In 2017, the grantee will submit a new certification for FY 2017, 2018 and 2019.Related FAQ(s)In 2014, a grantee has a three-year certification period of 2014, 2015, and 2016. In ...
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Overall Benefit

Can the grantee ask to extend that one-year certification period to cover additional years, so the grantee has more time to get into compliance?

Example: After a CDBG grantee's program year ends, it is discovered that it failed the chosen one-year certification to meet the 70 percent (70%) minimum overall low- and moderate-income benefit requirement.

 

No, an overall benefit certification period cannot be changed or extended once it is over. A CDBG grantee is not allowed to retroactively change its certification period to resolve noncompliance that has already occurred.

Overall Benefit
Overall Benefit

Does the CDBG overall benefit requirement include Section 108 loan guarantee funds?

Yes. If a CDBG grantee also has a Section 108 loan guarantee, the overall low- and moderate-income benefit requirement is required to be met. The CDBG grantee must include the Section 108 loan guarantee expenditure in its overall benefit test. The language at Section 104(b)(3)(A) and 24 CFR 91.225(b)(4)(ii) references a guarantee or a grant under Section 108, if applicable.

Overall Benefit
Overall Benefit

How does a CDBG grantee demonstrate compliance with the selected overall benefit certification period?

Overall benefit compliance is reported annually when the CDBG e grantee submits its PR26, the CDBG Financial Summary Report, as part of its CAPER. Part III of the PR26, Low- and Moderate-Income Benefit This Reporting Period, will show the dollars expended for low- and moderate-income benefit with line items within this part devoted to expenditure adjustments. Just below this section the grantee can show its progress meeting the test at the end of...
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Overall Benefit

How does HUD measure compliance with the overall low- and moderate-income benefit requirement?

For example, is it tested based upon: Expenditure of CDBG funds that occurs during the program year(s) listed in the certification? Expenditure of CDBG funds out of the individual grant years listed in the certification?

 

HUD measures compliance with this requirement by reviewing the expenditure CDBG funds that occurs during the one-, two-, or three-year certification period, as appropriate. It is not based on the expenditure of CDBG funds out of the individual year grant(s) listed in the certification. This is because some CDBG funds for a grant year may not be spent until the following or subsequent years. For example, a grantee planned to spend $500,000 from it...
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Overall Benefit

In 2014, a grantee has a three-year certification period of 2014, 2015, and 2016. In 2015, it submitted a three-year certification for 2015, 2016, and 2017. In 2016, it submitted a three-year certification for 2016, 2017, and 2018. Is this overlapping, or rolling, of overall benefit certification periods permitted?

No. Grantees may not overlap or roll their three-year certification periods annually. The correct method for submitting a three-year certification period is identified in FAQ 3512. Each CDBG grantee's certification period is separate and distinct. HUD will reject a grantee's Action Plan submission if it contains a certification that overlaps the period specified in a prior year's certification.Related FAQ(s)At the time of CDBG grant application, ...
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Overall Benefit

May CDBG grantees change their selected overall benefit certification periods whenever they want to do so?

No. CDBG grantees may only change their overall benefit certification periods when they submit their next certification. For example, if a grantee has a two-year certification period of 2016-2017, it may select a three-year certification period for 2018, 2019 and 2020 effective upon expiration of the previous two-year certification.

Overall Benefit
Overall Benefit

May compliance with meeting the CDBG overall benefit requirement be waived?

No. The CDBG overall benefit requirement is a statutory requirement which cannot be waived.

Overall Benefit
Overall Benefit

What is the CDBG overall low- and moderate-income benefit requirement, and where is it found? Are grantees required to certify that they will meet this requirement?

This CDBG requirement refers to a certification period of over one, two, or three years, a CDBG grantee shall expend not less than 70 percent of its CDBG funds in the aggregate for activities that benefit low- and moderate-income persons. This does not include planning and administrative costs, but does include program income. The grantee elects the period over which it will meet this requirement. This has also been referred to as the 70 percent ...
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Overall Benefit

When do I need to make sure the overall income benefit is documented?

Each grantee certifies over a specified period of time (one (1), two (2), or three (3) years), a minimum of 70% of CDBG funds shall be expended for activities benefitting low to moderate income persons. Code enforcement may count toward the overall benefit requirement if the national objective of low and moderate area (LMA) is used. When code enforcement activities are undertaken under the slum and blight area (SBA) or urgent need national object...
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Procurement

Must a contractor be registered at sam.gov and have a DUNS number to check for debarment?

The General Services Administration (GSA), a federal agency, is required by the Federal Acquisition Regulation (FAR) to compile and maintain a list of parties debarred, suspended, or disqualified by federal agencies. Contractors as well as recipients of federal financial assistance must be registered at Sam.gov. To determine if a proposed contractor is debarred, grantees should check the federal SAM database. Active registration in SAM is re...
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Procurement

The County signed an agreement with a sub-recipient (a municipality) to use CDBG funds to construct a recreation center. If the sub-recipient already has or is going to obtain the service of an architect to design and oversee the construction of this center and is using its own non-CDBG funds to pay for the architect's service, does CDBG procurement policy apply in the obtaining of this architect's service?

Grantees and subrecipients are required to follow the procurement standards at 24 CFR 85.36 and 84.40-48, respectively. Specifically, since the subrecipient is a unit of general local government, it is required to follow 24 CFR 85.36, which requires all procurement transactions to be conducted in a manner to provide, to the maximum extent practical, open and free competition. Since this is a federally assisted CDBG activity, the procurement of th...
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Procurement

Is there a Buy American requirement for CDBG-funded construction or public works projects similar to other federally-funded work?

There is no "Buy American" requirement for the federal Community Development Block Grant Program (CDBG). CDBG grantees and subrecipients must follow federal procurement rules when purchasing services, supplies, materials, or equipment. The applicable federal regulations are contained in:   State and local governments and Indian tribes – 24 CFR Part 85. Nonprofits, institutions of higher education and hospitals – 2 CFR Part 215.44 (forme...
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Procurement

Can a request for proposals (RFP) or a request for qualifications (RFQ) be used on CDBG project?

Grantees may use the request for quotations when carrying out procurement by small purchase procedures. With this method, price or rate quotations are obtained from more than one source for the procurement of services supplies, or other property that does not cost more than $100,000. Requests for quotations may also be used for sealed bid procurements where the contract will be awarded to the firm whose bid, conforming with all of the material te...
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Procurement

Can CDBG funds be used to pay a third party to do all the rehab inspections for a grantee?

CDBG regulations allow grantees to utilize third parties to perform the functions of program implementation. 24 CFR 85.36 (b) through (i) define procurement requirements applicable to third party service providers such as inspectors, specification writers, architects, engineers, etc. Grantees should follow local procurement policies that conform to state and federal requirements, found in 24CFR Part 85, including procurement standards, free and o...
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Procurement

Does a subrecipient have to procure for construction to build a public building if CDBG funding was used solely to acquire land? If yes then can it sole source the contractor, if the contractor was already competitively procured and awarded the sole rights to build public buildings from the state?

CDBG subrecipients are required to follow federal, state and local procurement requirements when choosing a construction contractor, regardless of whether  a grantee competitively procured contractors independently. For subrecipients the procurement rules are found at 84.40-84.48; 24 CFR Part 85.36 applies to grantees. They are cross referenced in the CDBG regulations at 24 CFR 570.502. Even though CDBG funds are being used in the acquisitio...
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Procurement

Are there disciplinary actions that must be taken if the code of conduct is violated in a CDBG project?

All procurements made with CDBG funds must comply with the applicable federal requirements found in 24 CFR Part 85.36. CDBG grantees are required to adopt written procurement standards for CDBG projects as required by 24 CFR Part 85.36(b). Grantees must develop and maintain a written code of standards that helps prevent conflicts of interest in procurement. The written code of conduct must apply to all employees, officers, agents of the grantee, ...
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Procurement

Following a formal sealed bid advertisement, an infrastructure project had only one contractor submit a bid for the project. Under a sealed bid procurement process, does more than one bid need to be received before proceeding with the project?

When only one bid is received in response to an invitation for bids, the grantee needs to carefully review and evaluate the relevant circumstances in making a decision about how to proceed. The review should include examination of the specifications to consider if they were sufficiently clear and not unduly restrictive, the process used to solicit adequate competition so that it could have been reasonably assumed that more than one bid would have...
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Procurement

A private nonprofit organization is receiving CDBG funds to construct a homeless shelter. They have private funds which they intend to use to hire a design team, including a construction manager. CDBG funding will finance the construction work, all of which will be procured using the standards at Part 84. What if any are the procurement requirements covering the private funds for the design team and construction manager?

This question addresses whether procurement applies to just CDBG costs or all of the costs in the project. Regardless of the portion of CDBG funds for the construction of a homeless shelter, if the funded entity is a CDBG nonprofit subrecipient, procurement rules in 24 CFR Part 84 apply to all of the costs associated with the project. In addition, any county-specific procurement requirements that are specified within your written agreement also apply.

Procurement
Procurement

If you are in the midst of a project and remove a prime construction contractor, what are the options for completing the work so that a nonprofit owner is in compliance with the federal requirements?

Federal procurement standards require all contacts in excess of $100,000 contain suitable provisions for termination, including the manner by which termination shall be effected and the basis for settlement. In addition, contracts must describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor. Please reference ...
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Procurement

Can local governments procure services from the state’s list of construction contractors? The state uses a sealed bid process to procure contracts.

HUD lays out the responsibilities that grantees must meet when conducting a procurement using federal funds in 24 CFR 85.36. While the procurement standards encourage intergovernmental agreements for the procurement of common goods and services (defined as standard commercial equipment, materials, supplies and services readily obtainable on the open market through conventional commercial marketing channels), procurement activities by CDBG entitle...
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Procurement

Are we able to piggyback on an existing contract for the purchase of equipment less than $100,000? City regulations allow piggybacking and the contract being piggybacked on has been procured through a competitive process which included federal procurement language.

Piggybacking in this case refers to using the results of another CDBG grantee's procurement for equipment after-the-fact, rather than the City conducting its own procurement. A grantee may not piggyback another grantee's procurement of a contract for goods and services. HUD lays out the responsibilities that grantees must meet when conducting a procurement using federal funds in 24 CFR 85.36. While 85.36 encourages intergovernmental agreements fo...
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Procurement

Please clarify if a PJ is permitted to utilize a competitively bid continuing services contract (for professional services such as engineering, surveying or architectural services) for on-going CDBG activities, during the life of the contract, that has been put in place for a specific period, such as three years? Following, the 3 year contract the on-going professional services contract would again be put out for competitive bids.

Although 24 CFR 85.36 does not mention the renewal of contracts, CPD Notice 96-05, page 3, last paragraph states that grantees are not allowed to renew or extend a contract without further competition. In addition, if professional services are required for a longer period of time than the contract specifies, those services must be secured through a new procurement. Therefore, if a grantee has a contract with a firm for professional services such ...
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Self Certifications

Can self-certifications of income be used in the CDBG Program to document that an activity has helped low- and moderate-income persons?

Yes. Income self-certifications are permissible pursuant to 24 CFR 570.506(b), but their use is generally limited to documenting beneficiary income for public service activities and even more limited when there is a direct financial benefit (e.g., day care subsidy, rental security deposit, etc.). Self-certifications are not intended to be used with housing and other direct-benefit activities, such as down payment assistance, where significant fin...
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Self Certifications

What type of CDBG public services are better suited to the use of self-certifications?

Self-certifications are generally intended to be used for CDBG eligible activities where there is not a direct financial benefit to the recipient, the service is minimal, or there is only an indirect benefit, such as access to after-school programs for low- or moderate-income children.

Self Certifications
Self Certifications

Do CDBG self-certifications need to be checked for accuracy? Or do we just take the beneficiary on his or her "word?"

The CDBG regulation states that the recipient, meaning the grantee, can "substitute a copy of a verifiable certification from the assisted person that his or her family income does not exceed the applicable income limit established in accordance with §570.3..." "Verifiable," therefore, means that it can be and is subject to being checked for accuracy. The self-certification form should also contain a statement above the signature line that notif...
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Self Certifications

How do we go about verifying CDBG self-certifications? Do we need to verify all self-certifications submitted?

HUD recommends source documentation be requested from the CDBG beneficiary for 20% of the certifications. The beneficiary should also be informed that all sources of income and assets must be included when calculating annual income, depending upon the specified definition of the CDBG grantee (e.g., Part 5 (24 CFR 5.609), or the IRS definition. Depending on local policies and procedures, the grantee or subrecipient would review verifiabley income ...
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Self Certifications

Is the 20% threshold for verifications of CDBG self-certifications a hard and fast rule?

It is only a recommendation. HUD encourages CDBG grantees to establish their own policies and procedures for implementing a self-certification program. HUD recommends that grantees' local policies and procedures are consistent across similar types of CDBG-funded activities (e.g. for all public services that provide indirect financial assistance to beneficiaries).

Self Certifications
Self Certifications

What are some issues to consider in establishing a CDBG self-certification policy?

Local discretion is important to implementing a CDBG self-certification program because only the grantee can know all the circumstances and risk factors that must be considered in setting up such a program. The flexibility a grantee exercises regarding the 20% sampling recommendation can be a function of several things. For instance, if the grantee is considering a policy for a non-profit subrecipient or a government agency, how comfortable is it...
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Self Certifications

What about one-time benefits provided at a food bank or a community event where the provider will likely never make contact again with a participant? How are those CDBG self-certifications verifiable?

Many times, it is impractical, if not downright impossible, to secure income verification from the beneficiaries of certain CDBG activities. This is particularly true of public service activities, like food banks, where donated food is made available for individuals and families, often have little or no ongoing client relationship between the beneficiary and the provider. Grantees must use their best judgment in funding agencies providing these s...
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Self Certifications

If one of our public service activities is monitored by HUD and a sample of verifiable income documentation is not available, will this result in a finding?

The percentage of self-certifications for which a grantee has back-up verifiable income documentation, though recommended to be 20%, is ultimately a function of several factors, as noted above. A discovery of no verifiable income documentation available on any sample taken, however, may be a concern or a finding and warrant further investigation, depending on the nature of the activity and the factors discussed above. Missing or incomplete docume...
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Timeliness

Is CDBG program income included in the timeliness test?

Yes. The timeliness test, which is taken 60 days before the grantee's program year end date, includes available grant balances undisbursed by Line Of Credit Control System (LOCCS) and CDBG program income the grantee has on hand. This includes the program income that a grantee may have on hand in a revolving loan fund (RLF), referenced as "RL" funds in IDIS.

Timeliness
Timeliness

We have an activity where there's been a slight delay in completing construction and submission of final invoices. We were counting on these funds to be drawn before our timeliness measurement date. CDBG funds are under contract where the final draws will occur 2-3 weeks after the measurement date, can we go ahead and draw the funds down before our measurement date so that we meet the 1.50 ratio?

No. Doing so violates the 2 CFR Part 200 cash management requirements regarding drawing funds in advance of cash needs [2 CFR 200.305(b)(1)]. Any funds drawn in such a manner will be included by HUD in computing your timeliness ratio anyway. The grantee must return the funds to the LOC unless it can revise the draws to another activity that has immediate cash needs. In addition, the grantee may owe interest to the U.S. Treasury.

Timeliness
Timeliness

We ran a PR56 after submitting our last voucher, but the current CDBG draw ratio and the Line Of Credit (LOC) balance did not change. What did we do wrong?

Please note the reporting module in Integrated Disbursement and Information System (IDIS) does not operate on a "real-time" basis; changes are made overnight. Thus, reports only capture changes to the system on the next business day. Even so, vouchers may take longer to process. A good rule of thumb is to run an updated PR56 Report two days after submitting a voucher to see the new draw ratio and LOC balance.

Timeliness
Timeliness

What are "factors beyond the CDBG grantee's reasonable control?" Does HUD have a list of reasons that it will automatically accept?

Factors beyond the grantee's reasonable control can be a wide range of issues. Each grantee's circumstances, however, will be considered on its own merits.

HUD recommends that a grantee with any circumstances leading to untimeliness discuss its situation with its field office as soon as possible to explore possible solutions.

Timeliness
Timeliness

What are some ways a CDBG grantee can avoid timeliness problems?

Select activities in the Action Plan that are ready to go and include a list of back-up activities that could be funded in case the originally selected activities encounter delays. Reprogram funds for a new activity that is ready to go and include the original activity in a later year's Action Plan once it is ready to proceed. Consider if any changes are needed to the citizen participation plan to facilitate fund reprogramming. Consider making f...
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Timeliness

What can a CDBG grantee do if it knows in advance it is going to be untimely?

A CDBG grantee may contact its CPD representative in the local HUD field office to request technical assistance. HUD staff may provide guidance to the grantee remotely or onsite on how best to manage its CDBG program.

Timeliness
Timeliness

What happens at a CDBG timeliness informal consultation?

At an informal consultation, a grantee is given the opportunity "to demonstrate," as stated in 24 CFR 570.902(a)(1)(ii) and (2)(ii), "to HUD's satisfaction that the lack of timeliness has resulted from factors beyond the grantee's reasonable control." Following this discussion, HUD will decide the appropriate corrective action by considering the grantee's progress with its workout plan. HUD will also determine whether the untimeliness was due, in...
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Timeliness

What is timeliness in the CDBG Program?

"Timely performance" means compliance with the requirement that a CDBG Entitlement grantee, or Hawaii nonentitlement county grantee, must carry out its program in a timely manner, as measured by the rate of expenditure of funds from the grantee's Line of Credit (LOC). A CDBG Entitlement grantee, in accordance with the CDBG regulations at 24 CFR 570.902, must have a balance no greater than one and one-half (1.5) times its annual grant remaining in...
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Timeliness

What resources are available to ensure a CDBG grantee stays below its 1.50 timeliness ratio?

HUD provides resources to CDBG grantees on its website on this topic. The first one, "Keeping Your CDBG Funds Moving: Guidelines for Managing Your Overall Community Development Block Grant Program in a Timely Manner" is a helpful pamphlet to help grantees review internal procedures and incorporate timeliness into daily operations. The second resource, "Ensuring CDBG Subrecipient Timeliness" provides guidelines for grantee selection, management,...
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Timeliness

What should be included in a CDBG Workout Plan?

The plan should show how the grantee will meet the 1.5 timeliness performance standard by a specific date and identify all the actions the grantee expects to take to meet the specified timetable. Actions may include hiring staff, canceling contracts or matching funds for specific projects. In addition, the plan should include a discussion of projects which are behind schedule and the possibility of replacing them with faster-moving projects, as ...
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Timeliness

Why does HUD include RLF balances in computing the CDBG timeliness ratio? Those funds are set aside for a specific type of activity, cannot be drawn for other activities and we cannot control the demand for these funds by potential beneficiaries.

HUD includes Revolving Loan Fund (RLF) balances because they fall under the definition of program income and therefore are subject to the same terms and conditions as CDBG grant funds, including the timely expenditure requirements. Despite RLFs being subject to different rules and circumstances, there are actions that a grantee can take to ensure those funds truly revolve and do not lead to a timely expenditure problem.

Timeliness
Timeliness

Why does HUD measure timely expenditure performance 60 days before the end of a CDBG grantee's program year, instead of on the last day of the program year?

HUD measures a CDBG grantee's timely expenditure performance 60 days before the end of a grantee's program year so if corrective actions or sanctions are imposed, a grantee will be informed of those actions prior to the start of the grantee's subsequent program year. Then, a new grant agreement can be issued for the reduced amount.

Timeliness
Timeliness

Why is it so important for a CDBG grantee to ensure that its Line of Credit balance does not exceed 1.5 times its most recent allocation, when the measurement is taken?

Section 104(e) of the Housing and Community Development Act of 1974, as amended, requires HUD to determine annually whether each CDBG entitlement grantee is carrying out its activities in a timely manner. In addition to meeting the legal requirements, CDBG funds must be spent on time to achieve the objectives of the program. CDBG funds are used to meet the economic, infrastructure and social needs of under-served, distressed neighborhoods and the...
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Timeliness

Will a CDBG grantee automatically be sanctioned for being untimely?

The first year a CDBG grantee is untimely, the HUD Field Office will send the grantee a finding letter and the grantee will be required to submit a workout plan showing how it intends to get back into compliance before the next timeliness measurement date. The plan might include how the grantee will speed up its overall expenditure rate, how it will spend down the backlog of funds, and how it will fix the problems that caused the untimely expendi...
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Timeliness

What are some ways for a CDBG grantee to check its timeliness on a regular basis?

A grantee should draw down funds from its LOC on a regular, periodic basis commensurate with cash needs, to ensure consistent bill payment. Each time the grantee submits a voucher in IDIS, for instance, it can run a PR56, CDBG Timeliness Report, which will provide the most updated draw ratio and Line of Credit (LOC) balance in the Line of Credit Control System (LOCCS).

Timeliness
Urban County

Where is the term "urban county" defined within the CDBG program and how many persons must a county have to qualify as an urban county?

Although mentioned at 24 CFR 570.3, Definitions, urban county is defined at Section 102(a)(6) of the Housing and Community Development Act (HCDA) of 1974, as amended. This provision defines an urban county as a county within a metropolitan area that has a population of 200,000 or more, not including metropolitan cities located therein. A county that has a minimum population of 200,000 may also qualify as an urban county if the unincorporated area...
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Urban County

What type of communities contribute to the population threshold for a county to be determined eligible for CDBG urban county status?

The types of communities contributing to the population threshold for a county are incorporated units of general local government (UGLGs) that don't qualify as entitlement grantees and choose to participate in the urban county's CDBG program and unincorporated areas. The population of entitlement communities (those having a population over 50,000) located within an urban county is not included. (A metropolitan city may relinquish its entitlement ...
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Urban County

What happens to a CDBG urban county with a population just over 200,000 if a participating unit of general local government becomes a CDBG entitlement community and drops out of the urban county?

It depends on when the county became an urban county. If it has been an urban county since 1999, it is grandfathered as an urban county and cannot lose that status. Section 102(a)(6)(D)(viii) of the Housing and Community Development Act (HCDA) states that, aside from any other provision of Section 102(a)(6), any county that was classified as an urban county because it met the population threshold or low and moderate-income preponderance test for ...
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Urban County

What is the low/moderate income preponderance test, and how is it calculated within the CDBG urban county context?

A new potentially eligible county may use this method of qualifying if it cannot get every unit of general local government (UGLG) to join the urban county, and, as result, the population of the participating UGLGs and the unincorporated areas does not add up to 200,000. (Note, however, that the county must first meet the 200,000 population threshold to be eligible.) An existing urban county may use this method of requalifying as an urban county ...
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Urban County

How may a metropolitan or a principal city located in a non-urban county assist that county in attaining CDBG urban county status?

A metropolitan city, or a principal city (designated by Office of Management and Budget – OMB) as such and having less than 50,000 population) may relinquish its entitlement status and join the urban county as a participating unit of general local government (UGLG), along with other UGLGs located therein. Including the metropolitan city's population with the county's population will result in the county obtaining the 200,000 or more population ...
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Urban County

What are "essential powers" within the CDBG program?

"Essential powers" refers to the ability of a county government to undertake essential community development and housing assistance activities in its unincorporated areas, if any, which are not units of general local government. In most counties, the county government's essential powers do not apply to incorporated units of general local government (UGLGs) within the county. If the county government cannot undertake essential community developmen...
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Urban County

What are the first steps in the qualification/requalification process for a CDBG urban county?

After HUD has notified an urban county of its eligibility, a county must contact each unit of general local government (UGLG) in writing and offer them the opportunity to participate or defer participation in the urban county's CDBG program. The UGLG must write back to the urban county with its decision to participate or defer participation in the county's CDBG program. The deadline to complete this step is contained in the annual Urban County No...
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Urban County

Why does the qualification/requalification period for CDBG urban county status occur every three years?

The qualification/requalification period is a statutory requirement and codified in the regulations at 24 CFR 570.307(d)(1). Section 102(d) of the Housing and Community Development Act (HCDA) states that, "The population of any UGLG which is included in that of an urban county ... shall be included in the population of such urban county for three program years beginning with the program year that its population was first so included." The regulat...
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Urban County

Can a unit of general local government (UGLG) join a CDBG urban county during any year of its three-year qualification period?

Yes. The UGLG may join the urban county's CDBG program during the first, second or third year of its qualification period.

Urban County
Urban County

Must a unit of general local government (UGLG) remain with the CDBG urban county until it requalifies, even when meeting the population threshold of 50,000 to become an entitlement?

Yes, because this requirement is statutory. Section 102(d) of the Housing and Community Development Act (HCDA) states: "... the population of any unit of general local government which is included in that of an urban county ... shall be included in the population of such urban county for three program years beginning with the program year in which its population was first so included ..." Therefore, even if an UGLG reaches the 50,000 population t...
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Urban County

What happens if an unincorporated area of a CDBG urban county incorporates as a unit of local government during the three-year period?

The newly incorporated unit of general local government (UGLG) will remain part of the urban county's CDBG program as an unincorporated area until the county requalifies. This means that the county will continue to have the ability to undertake essential community development and housing assistance activities in that area without a cooperation agreement. Once the county requalifies, and the newly incorporated UGLG is recognized by the Census Bure...
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Urban County

Who decides how the CDBG grant is used in an urban county--the county, participating UGLGs, or both? Are there any requirements regarding the distribution of CDBG funds to participating UGLGs?

Urban counties must conduct citizen participation activities and have at least two public hearings annually so the unincorporated areas and the participating units of general local government (UGLGs) and their citizens can discuss their communities' needs and proposed CDBG activities. In addition, in accordance with 24 CFR 91.100, urban counties must consult with business and civic leaders; local and regional government agencies; the Continuum(s)...
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Urban County

Are urban counties required to award CDBG funds to all participating UGLGs?

No. Although the demographics of the participating UGLGs are used to calculate the amount of the county's CDBG grant, the UGLG must be planning to carry out a CDBG-assisted activity to receive a CDBG grant award from the urban county. An urban county may distribute CDBG funds in the manner that it chooses. It may require UGLGs to apply for funding under a competitive or noncompetitive selection process, distribute funds among UGLGs using a formul...
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Urban County

Must the urban county carry out all CDBG-assisted activities itself or may the participating UGLGs also carry out activities?

The urban county may carry out all CDBG-assisted activities itself, even in the participating units of general local government (UGLGs), or choose to carry out activities only in the unincorporated areas and allow the participating UGLGs to carry out activities in their jurisdictions. The final decision on who will carry out activities in the urban county rests with the county.

Urban County
Urban County

Are UGLGs and urban counties allowed to negotiate the amount of CDBG funds the county will award to the UGLG?

The urban county needs to establish policies and procedures governing its process for selecting activities for funding, including when and how a county may provide funds to participating units of general local government (UGLGs). However, the CDBG regulations give each grantee the flexibility to design its program based on locally-identified needs and priorities. It is common for county governments to work with their participating UGLGs to help d...
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Urban County

Can a county take CDBG funds away from a participating UGLG after the county has awarded those funds to the city for an activity?

Yes. An urban county may take back CDBG funds awarded to an unit of general local government (UGLG) for various reasons. These reasons include but are not limited to untimely performance, noncompliance with cooperation and/or subrecipient agreements, ineligible activities, activity does not meet a national objective, noncompliance with Davis-Bacon requirements or fair housing requirements. The urban county ensures CDBG funds are used in accordanc...
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Urban County

What kind of written agreements are required between a CDBG urban county and participating UGLGs? If no agreement is required by state/local law, does this mean that no written agreement should exist between the urban county and its UGLGs?

There must be a written cooperation agreement between the urban county and its participating units of general local government (UGLGs) unless the urban county can undertake essential community development and housing assistance activities in incorporated areas. Urban counties must have cooperation agreements with UGLGs unless state/local law gives the urban county essential powers countywide, even in incorporated UGLGs. Since participating UGLGs ...
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Urban County

Is a joint agreement the same as a cooperation agreement within the CDBG program?

No. A joint agreement between an entitlement grantee and an urban county permits the urban county to administer an entitlement grantee's CDBG program in addition to its own. A cooperation agreement allows an urban county to carry out eligible activities in participating units of general local government (UGLGs) where it cannot undertake essential community development and housing assistance activities. Therefore, UGLGs cannot have joint agreement...
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Urban County

Can a CDBG urban county and entitlement grantee enter into a joint agreement whenever they have the desire to do so?

No. 24 CFR 570.308(a) states that a joint request shall only be considered if submitted at the time the county is seeking a three-year qualification or requalification as an urban county.

Urban County
Urban County

The CDBG Urban County Notice is published annually. May an extension to the deadlines outlined in the Notice be granted?

Yes. Urban counties must contact their field offices with extension requests. The field offices will contact Headquarters to request the extensions. Note that no extensions will be granted past mid-September.

Urban County
Urban County

Can an urban county fail to receive a CDBG grant during any year of its three-year qualification period?

Yes. If the urban county fails to apply for its CDBG grant by not submitting its SF 424, Consolidated Plan/Action Plan, and certifications by August 16 of that year, it will not receive a CDBG grant. This has the effect of the urban county relinquishing its status for that year. The urban county may requalify the following year for the next three-year qualification period if it wants to do so.

Urban County
Urban County

What options do UGLGs have if they decide not to participate in the urban county's CDBG program?

Non-entitlement units of general local government (UGLGs) choosing not to participate in the urban county's CDBG program may apply for CDBG funds from the State where it is located or choose not to participate in the CDBG program at all. An UGLG that reaches the population threshold to become an entitlement will be notified of its status. The UGLG must respond in writing to the county and field office that it either accepts or defers its entitlem...
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Urban County

What happens to the UGLGs when an urban county does not apply for its CDBG grant?

In the subsequent year, the units of general local government (UGLGs) may apply for assistance from the State CDBG program. For example, if an urban county does not apply for its CDBG grant by August 16, 2018, it will not receive its 2018 CDBG grant. In 2019, the UGLGs may apply to the State CDBG program for assistance. Theoretically, the state may choose to award any leftover FY 2018 funding to these UGLGs. To do this, the state would have to do...
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Urban County

Can urban counties fund CDBG activities within entitlement communities or non-participating UGLGs that are located inside its boundaries, but outside its jurisdiction? What is the difference between being located within the geopolitical boundaries of the county and being a part of an urban county?

The urban counties must meet all requirements at 24 CFR 570.309. The requirements state that "CDBG funds may assist an activity outside the jurisdiction of the grantee only if the grantee determines that such an activity is necessary to further the purposes of the Act and the recipient's community development objectives, and that reasonable benefits from the activity will accrue to residents within the jurisdiction of the grantee. The grantee sha...
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Urban County

Can CDBG urban counties and entitlement communities located within their boundaries partner to carry out an eligible activity?

Yes, if there is a written agreement between the entitlement community and urban county that fully details the activity to be carried out and how it will meet a national objective. HUD encourages the entitlement community and urban county to ensure their residents benefit in proportion to the percentage of CDBG funds contributed by each entity for the activity. For example, if the entitlement community and urban county each contributed 50 percent...
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Urban County

Can an urban county transfer CDBG funding from one participating city to another?

No. Pursuant to the Consolidated and Further Continuing Appropriations Act, 2016, Pub. L. 114-113, a unit of general local government may not sell, trade, or otherwise transfer all or any portion of such funds to a metropolitan city, urban county, unit of general local government, or Indian tribe, or insular area that directly or indirectly receives CDBG funds in exchange for any other funds, credits or non-Federal considerations, but must use su...
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Urban County

Where can I get resources to help the incorporated areas, the county commissioners, and other elected officials, especially, understand the CDBG urban county qualification and requalification process?

HUD has produced a technical assistance product on the urban county qualification and requalification process. Access the product on the HUD Exchange Explore CDBG page by clicking on the link titled, "The Urban County CDBG Qualification Process--Requirements, Procedures and Deadlines." The following table compares requirements for Joint Agreements and Cooperative Agreements. JOINT AGREEMENT COOPERATION AGREEMENT A joint agreement is an ag...
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Content current as of September 17, 2021.