Please review The Section 108 Loan Guarantee Program regulations at Subpart M, Loan Guarantees, 24 CFR 570.700 - 570.711. Grantees may use general funds or obtain a private loan to assist the activity. No. Working with local homeownership counseling programs. Persons living in shelters or on the street will meet the presumption of being low- and moderate-income. For the State CDBG program, the unit of general local government makes the certification, and the State determines, that the criterion above was met. Referencing the example in FAQ 3513, for 2014, the CDBG grantee would submit its certification for the three-year period (2014, 2015, 2016). Can I use the code enforcement activity to help low income homeowners correct their code violations? 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. if (document.getElementById(ss).style.display == 'none') { CDBG awards should be made only to the UGLGs that plan on carrying out an eligible activity, Management and oversight of the UGLG in carrying out CDBG-assisted activities. If the new use meets a national objective, the grantee may proceed with the change. The regulation at 24 CFR 570.207(b)(1) states that purchase of equipment with CDBG funds is generally ineligible. It is very unlikely that an entire city or county would be designated as deteriorated/deteriorating. There is no "Buy American" requirement for the federal Community Development Block Grant Program (CDBG). var toggle = function toggleMore(ss) { The greater the financial value of the benefit being provided particularly if it is a direct financial benefit (e.g., day care subsidies, rental security deposits), the greater the sample size in most cases. The low/moderate income preponderance test is calculated by taking the total number of low- and moderate-income persons in the county minus the low- and moderate-income population in entitlement cities, if any. Example: Land acquired for public facility. In return for the designation, grantees are afforded enhanced flexibility in undertaking economic development, housing and public service activities with their CDBG funds. // Declare variables 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. In addition, persons falling into any of these categories except "at risk of homelessness" will meet the low- and moderate-income limited clientele presumed benefit criterion at 24 CFR 570.208(a)(2)(i)(A) for Entitlements and 24 CFR 570.483(b)(2)(ii)(A) for States. Yes, for profit businesses are required to have a DUNS number to be eligible for economic development loans funded with CDBG. Homeowners also may be able to exclude the canceled debt. This is because the city is located centrally in the county, providing easy access to people all over the county. The installation, rehabilitation, or reconstruction of public facilities and improvements [24 CFR 570.201(c)]; privately-owned utilities [24 CFR 570.201(l)]; and non-profit owned, non-residential buildings as identified at 24 CFR 570.202(a)(4) may meet the national objective of benefit to low- and moderate-income persons on an area basis [24 CFR 570.208(a)]. 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. What should the grantee do? (A) subsidize interest rates and mortgage principal amounts for low- and moderate-income homebuyers; (B) finance the acquisition by low- and moderate-income homebuyers of housing that is occupied by the homebuyers; (C) acquire guarantees for mortgage financing obtained by low- and moderate-income homebuyers from private lenders (except that amounts received under this chapter may not be used under this subparagraph to directly guarantee such mortgage financing and grantees under this chapter may not directly provide such guarantees); (D) provide up to 50 percent of any down payment required from low- or moderate-income homebuyer; or. Can self-certifications of income be used in the CDBG Program to document that an activity has helped low- and moderate-income persons? If CDBG paid only a portion of the costs, a proportional share of the proceeds should be reimbursed to the program. 5310). What are those activities? 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 (contacts, purchase orders, copies of checks, receipts for work completed or equipment purchased), or completed product (i.e., plan, study, survey). The application contains a summary of important information about the CDBG CV program. An NRSA can exist within or alongside an established service area, adding emphasis and extra tools to enhance the chances of success. If public property supports and eligible activity and meets a national objective, then remains eligible program activity. 24 CFR 5.1003 describes the DUNS number requirement in detail. The regulation at 24 CFR 570.207(b)(1) states that purchase of equipment with CDBG funds is generally ineligible. The acquisition must also meet a national objective, usually based on the follow-on activity that the property will be used for after the demolition. Depending on the situation, you may wish to consider legal action against the contractor since they were removed for cause. The applicability of Davis-Bacon under CDBG turns on whether the property is in fact a residential property containing less than 8 units. 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? The grantee paid $200 to the Housing Counseling Agency for its service. The purpose of the Indian Community Development Block Grant (ICDBG) program is the development of viable Indian and Alaska Native communities, including the creation of decent housing, suitable living environments, and economic opportunities primarily for persons of low and moderate income. Stand-alone housing counseling activities, and other types of housing information and education services (some of which heretofore may have been called housing counseling by grantees) have always come under the public services cap and will continue to come under the cap. 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. Example: Vacant land acquired and sold for church. apply to the UC's grant as a whole, not to each individual sub-award to an UGLG. Meet SB criteria or reimburse the CDBG program. HUD encourages CDBG grantees to establish their own policies and procedures for implementing a self-certification program. No. 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. 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? How does a local IDIS administrator update a user's privileges? The entitlement city may contract with a nearby unit of government (city, town, county, state agency, council of governments, etc.) Salaries for job training participants are not considered an activity delivery cost of job training. 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 grantee may provide bus and/or subway passes to job training participants that cover transportation costs for the length of the job training. Therefore, if the Manual Payment was deducted from 2015 or subsequent grant years, the grantee must fund the Section 108 repayment activity from the same origin year grant. The documentation for evidencing compliance with the Public Benefit criterion is cost per job created. Therefore job retention would not benefit the State Program and thus cannot be used. No. 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. The Community Development Block Grant (CDBG) Entitlement Program provides annual grants on a formula basis to entitled cities and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons. A CDBG or CDBG Disaster Recovery (CDBG-DR) grantee still has the flexibility to design activities to meet its locally identified needs. 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)? Divide it by two which equals 22,000 and then add one which equals 22,001. More information about reporting accomplishments for public faci No, unlike housing rehab programs (e.g. A program audit is an audit of one federal program (such as CDBG). Option 1 (aggregate all units for the same type of rehabilitation): For the same type of single-unit housing rehabilitation funded in a program year, all the units can be aggregated and allocated as one activity in IDIS under appropriate matrix code 14A, 14D, 14F, 14G, or 14I. This section allows the purchase of mortgage insurance by the household but not the direct issuance of mortgage insurance by the grantee. What are some ways for a CDBG grantee to check its timeliness on a regular basis? For example, another couple acquired a mortgage for $75,000. For joint agreements and cooperation agreements, there can be an renewable clause therein stating the agreements automatically renew. Do we need to verify all self-certifications submitted? What can a CDBG grantee do if it knows in advance it is going to be untimely? The required certification regarding fair housing reads as follows: Affirmatively Further Fair Housing - The jurisdiction will affirmatively further fair housing, which means it will conduct an analysis of impediments to fair housing choice within the jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that analysis, and maintain records reflecting that analysis and actions in this regard. var topicFilter = document.getElementById('topic_selector').value; We were counting on these funds to be drawn before our timeliness measurement date. How do we ensure compliance with the change of use rules with our CDBG activities? In this example, they have $1,450 less per year than they need ($12,250-$10,800). 110 of the HCD Act. 07 E-mail requests to: homerepair@co.monmouth.nj.us Grantees should establish a regular schedule for making drawdowns. 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. 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. 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." Any CDBG grantee that relies solely or predominantly on a self-certification approach to income documentation can put an activity at risk if the beneficiaries are later audited and determined to be over the applicable income limit. The city may contract with the urban county to administer its CDBG program; The city may remain an entitlement and enter into a joint agreement with the urban county during its year of requalification; or. 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 well as funds available for reprogramming. 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. Cooperation agreements are not the same as subrecipient agreements. 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. CDBG funds will eventually be used to pay for the actual construction work to rehab a community center. The entire cost can be paid for with CDBG only if the vehicle is used exclusively for CDBG-eligible code enforcement inspections. There are numerous other ways of supporting homeownership for low and moderate income households, including reducing mortgage principal and interest, and paying closing costs. Why is downpayment assistance limited to 50 percent of the required down payment? 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. 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. This does not include planning and administrative costs, but does include program income. Some public uses that are eligible and meet a national objective are: If property is acquired with CDBG funds, what kind of expenses are eligible at the time of disposition? Must national objective compliance be demonstrated? For this reason, it is wiser to designate smaller areas because the effects can be more pronounced when focused on a tight geography. 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. The following provides guidance on how to set up activity and report ADC in IDIS for different types of major CDBG activities. Where CDBG funds are used to finance only a portion of the construction work, labor standards are applicable to the entire construction work. 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.? A UC may be joined by more than one entitlement, but an entitlement located in more than one UC may be a joint recipient with only one UC at a time. When do Davis-Bacon requirements apply to construction on residential property? Therefore, administration costs for HMIS cannot be charged to the CDBG program. The grantee would therefore reduce the principal amount of the mortgage by $25,305 and take a soft second mortgage to secure it. We recommend you use the IDIS PR07 report to calculate total cash receipts for the quarter plus prior quarters since the inception of the CDBG award. 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 federal rehabilitation assistance, each grantee or participating jurisdiction shall: (1)Conduct paint testing or presume the presence of lead-based paint, in accordance with paragraph (a) of this section. */ If you are just starting to charge staff time to activity delivery, you may have to make a general estimate until you have actual data from the time and activity timesheets. CDBG grantees are required to adopt written procurement standards for CDBG projects as required by 24 CFR Part 85.36(b). Please note that acquiring real property with CDBG funds through eminent domain (condemnation) for economic development projects benefiting private, for-profit businesses is prohibited. Yes, because this requirement is statutory. 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. 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. Senior management should be involved in the plan's development so they have a vested interest in meeting performance benchmarks and spending CDBG funds on time. For the population and growth lag variables, HUD used the 2012 population estimates. 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. CDBG funds are used to meet the economic, infrastructure and social needs of under-served, distressed neighborhoods and therefore Congress wants to make sure that funds are being spent on a regular basis to meet those needs. The check stub (and the grantee's records) must clearly identify the amount being provided for up to half of the required downpayment ($3,000) and the amount subsidizing the mortgage principal ($12,000). What happens if an unincorporated area of a CDBG urban county incorporates as a unit of local government during the three-year period? 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. Activity #2 is essentially the repository for CDBG funds adjustments. Providing broadband service would fall under the category of goods or services. 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. 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. Can CDBG funds be used to pay a third party to do all the rehab inspections for a grantee? Although an entitlement city may be the location of the county seat (e.g., Chicago, Cook County), the city's population is not included in the urban county's population. When running the PR07, be sure to select the report that reads Vouchers Submitted to LOCCS. This has also been referred to as the 70 percent (70%) test, LMI benefit test, or overall benefit requirement. Grantees are more likely to choose the benefit to low and moderate-income persons on an area basis national objective to ensure this requirement is met. In addition, activities assisted under 24 CFR 570.203(b) must also meet the public benefit standards at 24 CFR 570.209. If a recipient uses CDBG or CDBG-DR to fund a housing counseling program that meets the definition at 24 CFR 5.100, either directly or through a subrecipient, the housing counseling must be provided by a HUD certified housing counselor working for an agency approved to participate in HUDs Housing Counseling program, by the Final Compliance Date. 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. In 2015 and 2016, the grantee would submit the same certification, listing the same years, for each of those years' action plans. Every individual or family at risk of homelessness may not be low- and moderate-income because being considered at risk of home CDBG funds cannot be used to pay for the administration costs for HMIS since such costs are not a CDBG-eligible activity. What happens in IDIS when a CDBG grantee misses a Section 108 repayment? 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 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). The more general term for these activities is homeownership assistance. Public services as identified at 24 CFR 570.201(e). The grantee must be carrying out a CDBG-eligible public service that meets a national objective. 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)). In addition to energy efficiency standards, such as requiring Energy Star compliance, the specifications often refer to an a CDBG regulations permit funds to be used to rehabilitate a garage or additions to a housing structure incidental to the rehabilitation of the home. ), An existing urban county may use this method of requalifying as an urban county if it has not been an urban county since 1999, or if its population is just over 200,000, and several of its participating UGLGs decide to leave the urban county, thus dropping the population below 200,000. Records must be kept to show the percentage of time spent on CDBG-assisted code enforcement and non-CDBG-assisted code enforcement. Adding the $4,000 in taxes and insurance keeps the total annual housing cost at the $10,800 level that the household can afford on 30% of its gross income. }, U.S. Department of Joint agreements may be automatically renewing. 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). 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. Acquisition for clearance can meet SB test. 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. Should we consider lease purchase, rent, or market all social economic classes for purchase if able to qualify for a mortgage? In 2010, FHWA developed a livability initiative to better coordinate federal aid highway programs with grant programs administered by HUD and EPA. If the state/local law definition of deteriorated/deteriorating is used, a copy of the definition with the citation should be included. and use logs. The activity funded amount should be equal to the amount of the Manual Payment. Depending on your actual experience, it may be necessary to amend your budget during the year. If a person brings his/her lunch, he/she would not receive a lunch voucher. There are 4 units per building and 20 buildings on the property. In most counties, the county government's essential powers do not apply to incorporated units of general local government (UGLGs) within the county. This means that participants would have to be income-qualified to ensure that a national objective is met. 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. Does the use of CDBG funds to pay fees to a general contractor/builder managing a project trigger Davis-Bacon requirements? When activities fit this description, yes, the grantee may set up all the addresses under one activity. 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. Chronically homeless: Yes. It is found at Section 101(c) of the Housing and Community Development Act of 1974 (HCDA) and 24 CFR 570.200(a)(3). 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? 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. table.style.display = ''; 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. 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. This question addresses whether procurement applies to just CDBG costs or all of the costs in the project. 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. 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.
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