This collection of products will help grantees: create transformative impact in your community, improve the lives of residents, especially those with low- and moderate-income levels; develop strategies that bring partners and resources together; and implement your program effectively. Homeowners can exclude canceled debt from income if it is qualified principal residence indebtedness. Adequate documentation of payroll review can be based on establishing a reasonable, objective set of records that can be verified by a third party. Construction and equipment for the project are not part of our contract. Grantees may only have one public facility in an activity. Does CDBG require a lead safe clearance test for homeowner rehab programs under $5,000? If no accomplishments have been demonstrated after 3-5 years, HUD may have reason to question the national objective compliance. Section 3 requirements do n Each CDBG project must be an eligible activity and meet a national objective. See the last question below and 24 CFR 570.506 for further information about recordkeeping requirements regarding code enforcement activities. In the subsequent year, the units of general local government (UGLGs) may apply for assistance from the State CDBG program. Community Development Block Grants (CDBG) | Georgia Department of How do we ensure compliance with the change of use rules with our CDBG activities? // Loop through all table rows, and hide those who don't match the search query Absent full and open competition consistent with the requirements of 24 CFR 85.36, there is no basis to determine the reasonability of the contract price. How should the CDBG grantee decide what amount of subsidy is appropriate? A CDBG grantee is not allowed to retroactively change its certification period to resolve noncompliance that has already occurred. 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. As States and units of general local government are subject to different procurement standards, there is no presumption that a state agency's or unit of government's procurement standards will conform to 85.36(b). There are a number of project costs that may be paid with CDBG funds without triggering the Davis-Bacon requirements. if (td) { When provided as a forgivable loan, the CDBG regulations do not specify if IRS Form 1099C must be issued when the mortgage is forgiven. }, U.S. Department of Therefore, all of the work may be performed by one contractor. Grantees that do not have bonding polices and requirements should follow the requirements at 24 CFR 85.36(h)(1). the housing rehabilitation beneficiary household) receives a grant or loan from a grantee or subrecipient, the federal procurement requirements do not apply to that private individual. They are cross referenced in the CDBG regulations at 24 CFR 570.502. If the activity met a national objective, if the grantee complies and if defaulted loans are rare, HUD is less likely to require repayment of loans that had to be written off. Instructions on how to complete the SF-424 form can be found at www.grants.gov. 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 as a basis to receive low income housing tax credits for a specific housing project. 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. The second threshold is when CDBG is used to fund residential construction contracts for properties that include 8 or more units. A stipend is a payment to defray out-of-pocket costs participants incur while attending job training. Entitlement and Indian CDBG Programs Contact information for urban city and county CDBG Entitlement Programs that receive CDBG funds directly from HUD rather than through the state. What is the low/moderate income preponderance test, and how is it calculated within the CDBG urban county context? Then, a new grant agreement can be issued for the reduced amount. For entitlement grantees, these standards apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. 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. Improvements to a facility such as a recreation center or homeless shelter would be eligible at 24 CFR 570.201(c) or Section 105(a)(2) of the HCDA, provided a national objective is met. In addition, activities assisted under 24 CFR 570.201(o) do not have to meet the public benefit standards. table = document.getElementById("myTable"); 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. 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: Certain CDBG activities or soft costs such as real property acquisition or architectural and engineering fees do not trigger Davis-Bacon requirements. Rehabilitation of commercial buildings may be eligible under 24 CFR 570.202(a), 570.203(a) or (b) and Section 105(a)(14) of the HCDA. For example, fund the architectural/engineering work in year one, fund the water and sewer line replacements in year two, and fund the street and sidewalk reconstruction in year three. All program requirements such as the 20 percent planning and general administration cap, the 15 percent public service cap, and the 70 percent overall benefit requirement are based on the combined grant amount and apply to the UC's grant as a whole. For each selected outcome, A CDBG grantee with a designated Choice Neighborhood may request automatic NRSA designation. Must the grantee set aside a specific percentage or dollar amount of its CDBG allocation for NRSA? And if so, is there a resource that describes the responsibilities of this position? 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 CDBG Review Activities process sends emails accordingly: A grantee local IDIS administrator can edit user privileges and/or update the CDBG First and Second contact in IDIS to add/remove individuals from receiving these auto-generated email notifications. 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. Activity Delivery Costs: ADC for the economic development activities should be included in the budgets of each activity. C. Change of Use: 24 CFR 570.503 for entitlement subrecipients; 24 CFR 570.505 for entitlement grantees; 24 CFR 570.489(j) for the State CDBG program. HUD will not accept electronic signatures on certifications and SF-424s. HMIS is used to collect data for CoC assisted homeless programs and is not a data source for CDBG-assisted activities benefiting homeless persons. 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. Sec. If so, how? The policy should assure that all purchases are handled fairly and in a manner that encourages full and open competition. It is very difficult to qualify a stand-alone demolition as anything but removal of slums or blight. Low/moderate income summary data and the upper quartile exception criteria will be based on the UC's grant as a whole. Are grantees required to certify that they will meet this requirement? Grantees must follow the underwriting guidelines in Appendix A of 24 CFR Part 570 or adopt their own that are as stringent or even more so when making economic development loans. As an overview, down payment assistance is exactly what it sounds like: paying part of the required down payment. For an activity to significantly benefit residents of the recipient jurisdiction, the CDBG funds expended by the unit of general local government must not be unreasonably disproportionate to the benefits to its residents. For activities that meet the benefit to low- and moderate-income persons on an area basis, how is the service area defined? References: 2 CFR Part 225, Appendix B, #8(h)(3) and 24 CFR 570.502(a)(4). 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. Section 3 requirements do not apply to projects that do not involve housing construction, rehabilitation, or other public construction, such as a community center. 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. 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? 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 No. In addition to meeting the legal requirements, CDBG funds must be spent on time to achieve the objectives of the program. Statutory requirements supersede regulatory requirements. The CDBG overall benefit requirement is a statutory requirement which cannot be waived. So,if the department you are funding is part of the same legal entity, a separate DUNS number would not be required. Each Grantee must describe the activities it will undertake and how it will define homeownership in its Consolidated Plan and Policies and Procedures. The activity aligns with the housing and economic opportunities identified in the NRSA plan. For example, Homeowner A is provided a total of $15,000 in CDBG funds as a loan for downpayment assistance and subsidizing the mortgage principal amount. In 2017, the grantee will submit a new certification for FY 2017, 2018 and 2019. Our organization received an automatic email from IDIS regarding a flagged CDBG activity. The most updated version of the Application for Federal Assistance, or SF-424 form, may be found at www.grants.gov. The applicable requirement is found in Chapter 4 of the HUD Handbook on Federal Labor Standards Requirements in Housing and Urban Development Programs. Grantees may apply for a renewal after the first five years. What is the Applicant Identifier on the SF-424 Form? As the grantee, the county has all rights and responsibilities for administering its grant under the Housing and Community Development Act (HCDA) and the regulations. 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. Depends on the end use of the property. 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. 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. shown = 1; The CDBG regulations permit grantees to decide how to provide CDBG assistance. (See Question #1 for instructions on completing this process.). /* Not used. Can we set up a separate activity to cover those delivery costs? Similarly, housing counseling (or other types of housing information and education services) which are provided as part of the activity delivery for Homeownership Assistance (not direct), are eligible as a public service activity and so are subject to the 15% cap. Chapter 18 of the IDIS Online Training Manual, Grant Repayments, provides instructions for the grantee when returning funds to its line of credit. Properties that have not achieved an end use within three to four years run the risk of monitoring or audit findings. Each CDBG grantee's certification period is separate and distinct. However, the CDBG regulations give each grantee the flexibility to design its program based on locally-identified needs and priorities. keyfilter = input.value.toUpperCase(); The flexibility a grantee exercises regarding the 20% sampling recommendation can be a function of several things. This amount includes funds received (both fund types, EN and AD) for all CDBG activities including planning and administration. The applicable payroll and wage determination could either be attached or referenced to a location that is readily accessible. 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. Change of use rules apply to real property acquired or improved using CDBG funds in excess of $25,000. Typically, single-family homeowner properties are excluded under this exemption. if (topicValue.toUpperCase().indexOf(topicFilter) > -1) { txtValue = td.className; Community Development Block Grant (CDBG) Program } 5311 - Remedies for noncompliance with community development requirements. Promise Zones located within a jurisdiction actively implementing comprehensive community revitalization and meeting boundary and demographic requirements, as confirmed by HUD's Office of Field Policy and Management, will be presumed to meet the above criteria and HUD-CPD will automatically approve the NRSA designation. 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. The administering entity includes the PJ/grantee, as well as any subrecipient (unit of local government) or subrecipient (nonprofit organization) that receives over $200,000. All CDBG-R funds had to be expended by September 30, 2012. It depends on when the county became an urban county. In order to respond to your question, we have made several assumptions, as follows: You also need to determine that you are in compliance with the anti-piracy provisions of the CDBG Program. document.getElementById("filterInput").value = d.getAttribute("data-id"); However, if any construction work of $2,000 or more is paid for with CDBG funds, then all of the construction costs are covered. The funds repaid to the line of credit will be credited to the original activity and zero out the draws. HUD recommends that grantees' local policies and procedures are consistent across similar types of CDBG-funded activities (e.g. The County signed an agreement with a sub-recipient (a municipality) to use CDBG funds to construct a recreation center. You can find HUDs description of the applicability of Davis-Bacon to CDBG projects provided on the Factors of Labor Standards Applicability page. Does our organization need to submit a separate Cash on Hand report in IDIS for each of our open CDBG grants? The cost of conducting code enforcement inspections including salaries. 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. 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? (4) Implement safe work practices during rehabilitation work in accordance with 35.1350 and repair any paint that is disturbed and is known or presumed to be lead-based paint. Rather, the fines should be treated as applicable credits or general revenue. 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)). On the other hand, if a grantee has records showing how much time/miles a vehicle is used for CDBG-eligible code enforcement inspections, it can charge a proportion of the total lease or use to CDBG. 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 focus of CDBG-assisted code enforcement and inspections is on buildings. var shown = 0; } 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. The urban county has the discretion to use its method of choice for awarding CDBG funds to participating UGLGs. This is because it will already have the flexibility to expend more of its CDBG funds on activities that do not meet the low/moderate income benefit national objective. These activities have different regulatory citations for eligibility and national objectives and must be described separately. 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. This is due to the fact that both the acquisition and demolition activities must meet a national objective. What is HUDs definition of code enforcement? There must be a clear distinction between the amount of CDBG funds being provided for downpayment assistance and the amount provided for subsidizing the mortgage principal or interest rates. See 24 CFR 570.483(d). Therefore this activity is onlyeligible if it also meets a National Objective, as required at 570.200(a)(2). 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? Applicable credits are receipts or reductions of expenditure type transactions that offset or reduce expense items allocable to Federal awards. Can CDBG funds be used to pay salaries for persons participating in CDBG-assisted job training programs? var table = document.getElementById("myTable"); The entitlement community believes that it should demolish the building and change the use by selling the land to a business which does not directly benefit the low and moderate income area or create jobs. At least 70 percent of every grant must be expended for activities that benefit low- and moderate . A joint agreement is an agreement between an Urban County (UC) and a metropolitan city (entitlement). In addition, any county-specific procurement requirements that are specified within your written agreement also apply. (E) pay reasonable closing costs (normally associated with the purchase of a home) incurred by a low- or moderate-income homebuyer. The CDBG regulations are silent on a definition of homeownership. 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? 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 For Entitlements, HUDs definition of code enforcement can be found under 24 CFR 570.202(c). An example of eligible CDBG costs would include staff time using HMIS for client case management for services being provided to homeless persons, or relating to the operation of a homeless shelter, both which are CDBG-eligible under the authority of 24 CFR 570.201(e) and (c) for Entitlements and Section 105(a)(8) and (a)(2) of the HCDA for States, respectively. Use of SBA covers more properties; establishing an area as blighted requires more documentation. three years), the additional year(s) of services must be re-advertised and there must be full and open competition for the work. 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. Since participating UGLGs are to be treated as subrecipients in accordance with 24 CFR 570.501(b), minimally, there must be an agreement between the urban county and its UGLGs that meets all the requirements at 24 CFR 570.503 [Agreements with subrecipients]. Under that scenario, not only is your CDBG investment unsecured but (assuming your intent is rehabi 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. For additional information, also see the FAQs on Urban Counties and on Joint Agreements vs. Cooperation Agreements. Are there any CDBG funds excluded from the overall benefit computation? Dowe need to update our annual Action Plan to show this budget change? Urban counties must contact their field offices with extension requests. 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. Some grantees require credit counseling and homebuyer education classes to be completed before CDBG assistance is provided for homeownership assistance. } Best Practices of the Community Development Block Grant Program 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. 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. 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." If the use changes and the subsequent use does not meet a national objective, then the property may be taken out of the program. Finally, legal proceedings such as hearings to address appeals of violations are also eligible. The grant administering entity receives more than $200,000 in grant funds, and invests any amount of these funds to carry out new construction or rehabilitation activity (including demolition and lead-based paint abatement). If the property is sold or reused for another purpose, the reuse must meet a national objective or change of use applies (reimbursement of current fair market value required). Once it is determined that Section 3 applies to a project, the Section 3 requirements apply to all contracts, provided that at least $1 of grant funds is being used. 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. Are UGLGs and urban counties allowed to negotiate the amount of CDBG funds the county will award to the UGLG? There are 4 units per building and 20 buildings on the property. More information about the PR29 CDBG Cash on Hand report is available in the Instructions for the IDIS Cash on Hand Quarterly Report. Such shelters would include shelters for victims of domestic violence. Must national objective compliance be demonstrated? A grantee may require the homeowner to remain in the unit for a selected period after it is purchased. The AFFH policy covers the entire program, including all activities and all subrecipients. If in this situation the seller retains ownership rights then the current resident is not considered a homeowner but rather a renter. Find award and allocation amounts for grantees by year, program, and state. 110 of the HCD Act. HUD used the revised population estimate for communities that successfully challenged their population estimates with the Bureau of Census. 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? This has the effect of the urban county relinquishing its status for that year. 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 CDBG regulations allow grantees to utilize third parties to perform the functions of program implementation. The URA's protections and assistance apply to the acquisition, rehabilitation, or demolition of real property for federal or federally funded projects. Requests for proposals are used when carrying out procurement by competitive proposals. The items cannot be purchased with CDBG funds and used by code enforcement inspectors for code enforcement inspections jurisdiction-wide or for such inspections in non-deteriorated/deteriorating areas. 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)). D. Acquiring and/or holding property "for future use" is not an eligible activity. No Record Found means that the entity is not registered or has let its registration lapse. Explore CDBG. 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. Salary records (salaries, benefits, timesheets) for employees that process and issue citations and collect and process fines. CDBG regulations are silent on acceptable forms of ownership or the how CDBG funds are secured. If the owners/individuals planning to start microenterprises are low and moderate income, this activity qualifies under 24 CFR.570.208(a)(2)(iii) and all participants are presumed to be low-and moderate income. } else { The entitlement city of Apple (the city) does not want to administer its Community Development Block Grant (CDBG) program. Finally, HUD will consider the likelihood of the grantee meeting the timeliness measure by its next test date. If over $25,000, the grantee must give affected citizens reasonable opportunity to comment on the proposed change. 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. 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.). Each homeowner receiving assistance must be low- or moderate-income. For planned repayments of Section 108 loans, please use matrix code 19F. Now, the demographics in the neighborhood have changed; the young people have grown and the community has many more adult and senior members. Local Law Enforcement Block Grants (LLEBG) | Department of Finance and The new location is away from the homes of the current employees, but it would allow the company to create 50 new jobs. Creating jobs is not required when using the limited clientele national objective, although the grantee may, at its discretion, track any jobs that are developed and report them into IDIS. For example, converting a community center to a daycare facility for low- to moderate-income (LMI) families would meet a national objective, so reimbursement is unnecessary. 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.
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