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Basically CDBG Slides - NSP2 Training 2010

BASICALLY CDBG FOR NSP2 GRANTEES

HUDHUD -- Office of Block Grant AssistanceOffice of Block Grant Assistance CoCommunitmmunityy PPllanninganning && DevDeveelopmlopmentent

A LITTLE ABOUT YOU

Years of experience with CDBG?

<1 yr 1-5 yr 6-10 yr 10+ yr

Level of CDBG expertise Beginner (what’s Part 570?) Some experience I can cite Part 570 in my sleep

HUD, Office of Block Grant Assistance Slide 2

INTRODUCTIONS

Name

Community

Organization & NSP2 Role

CDBG activities carried out

NSP2 eligible uses to be carried out



COURSE STRUCTURE Agenda

Exercises

Training manual

Training manual appendices

Overheads

Primarily CDBG: NSP adaptations shown in Green


RULES

Ask questions

Keep side conversations to minimum

Parking lot messages

Please turn cell phones, etc. to silent mode

Training - Amnesty for all


LOGISTICS

Timing of breaks and lunch

Restrooms

Hey, where’s the coffee??



OOVVERERVIVIEWEW

BASICALLY CDBG

CDBG HISTORY

Authorized under Title I of the Housing and Community Development Act of 1974

NEIGHBORHOOD

OPEN DEVELOPMENT

SPACE WATER AND

LAND SEWER

NEIGHBORHOODCDBG FACILITIES

RENEWAL GRANTS

URBAN

REHABILITATION MODEL AND PUBLIC FACILITIES CITIES HISTORIC LOANS

GRANTS PRESERVATION


CDBG PRIMARY OBJECTIVES

Development of viable urban communities, principally for low/mod persons, through: Decent housing

Suitable living environment

Expanded economic opportunity



CDBG REGULATIONS Found at 24 CFR Part 570

Recent Rule changes due to: Statutory changes Increased flexibility & Faith-Based Organizations Brownfields Cleanup & Anti-Pirating Public Benefit Stds. for Econ. Dev. projects

Major rule revisions: January & November 1995 April 1996 November 2000 September 2003 December 2005 May 2006


KEY DEFINITIONS

Entitlement Program

State CDBG Program

CDBG Recipient/Grantee

Consolidated Plan (Con Plan)

Low and Moderate Income Person (LMI)

Household v. Family


TOP 10 CDBG Entitlement Grantees

NEW YORK CITY $195,203,459

CHICAGO $90,582,706

LOS ANGELES $77,983,283

PHILADELPHIA $55,325,903

DETROIT $40,142,357

HOUSTON $32,769,402

LOS ANGELES COUNTY $32,219,273

CLEVELAND $25,908,893

BALTIMORE $25,179,425

SAN FRANCISCO $22,267,380



CDBG ROLES

HUD’s key partners in CDBG programs include:

Entitlements Communities (cities and urban counties)

States & Units of General Local Government (UGLGs)

Subrecipients, CBDOs & CDFIs (will discuss in

the next module) Contractors Beneficiaries


NSP2 ROLES Single Entity Grantees Units of General Local Government (UGLG), State

governments, Non-profit organizations

Consortia Grantees Combinations of UGLGs, States, Non-profits

Some include For-profit Partners

Developers

Contractors

Beneficiaries HUD, Office of Block Grant Assistance Slide 14

NSP2 ROLES DEFINED Direct Grantee Consortium

Member Developer Contractor

Treated as recipient of grant?

YES YES NO (considered beneficiary or end‐user)

NO

Compensation Administrative costs

Administrative costs

Fee Fee

Procurement Must follow OMB Process

Must follow OMB Process

No process specified

Selected BY procurement process

Records Full NSP/CDBG Full NSP/CDBG Limited Limited




CDBG MONEY FLOW

Entitlement communities partners

States must award funds to UGLGs

Entitlement

Subrecipients, CBDOs, CDFIs

Beneficiaries

HUD

Contractors


CDBG IMPLEMENTATION STEPS

SUBMIT Consolidated Plan & Determine Program Delivery Method

SELECT Eligible Activities: Meet a National Objective

COMPLY with Other Federal Requirements

ADDRESS Administrative & Financial Requirements

IDIS – Set Up & Fund Activity

REPORTS – MONITOR & Report Progress

IDIS – ENTER Accomplishments into IDIS

Acquisition of real property

Relocation and demolition

Rehabilitation of residential and non-residential structures

Construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes

Public services, within certain limits

Activities relating to energy conservation and renewable energy resources

Provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities

Clearance and remediation – including maintenance and environmental remediation

Homeownership Assistance – including principal and interest reduction, downpayment assistance, and closing costs

ELIGIBLE ACTIVITIES



NATIONAL OBJECTIVES

Reg cite §570.208, 570.480

All CDBG activities must result in one of the following: Benefit low/mod income persons

Prevent or eliminate slums and blight OR

Meet an urgent need


INELIGIBLE ACTIVITIES

Regulations expressly prohibit: Buildings for conduct of government For example, city hall improvements Exception for community service centers

General government expenses For example, normal trash pick-up or operating the

city’s tax collection department

Political activities Includes any cost related to political campaigns,

including “get out the vote” drives


INELIGIBLE ACTIVITIES (cont.)

The following are generally not allowed, except under specific circumstances: New housing construction

Income payments

Purchase of equipment

Operating and maintenance expenses

We will cover the exceptions during the activity modules



OTHER FEDERAL REQUIREMENTS

CDBG activities must also meet other federal laws, regulations & requirements, including: Environmental review & compliance

Davis-Bacon and related Acts (Labor)

Uniform Relocation Act (URA)

OMB Circulars (administrative, financial, audits)

Fair Housing

Handicapped accessibility

Lead-based paint hazard reduction Chapters at end of the training manual summarize these requirements


KEY QUESTIONS TO CONSIDER FOR CDBG IMPLEMENTATION

What are our community development needs, especially for LMI persons?

How can CDBG be used to address these needs?

Do we have effective procedures for CDBG grant administration & oversight?

Do we have a process for timely collection and reporting of outcome and eligibility data in IDIS?

How will we evaluate and improve our program results and processes?


CCOONNSSOLIOLIDDATEDATED PLANPLAN ANDAND IMPIMPLLEEMMENENTATATIONTION

BASICALLY CDBG


THE CONSOLIDATED PLAN

Needs determine activities and organizations to fund

Components: Lead agency description

Housing and homeless needs assessment

Housing market analysis

Strategic plan

One-year action plan



FALL 2008 Sept. 28, 2008 2007/2008 CAPER must be submitted in IDIS no later than this

date (90 days after the end of the PY)

End of the 2007 Program Year

2008 Annual Action Plan Submitted to HUD Field Office (45 days before the start of the PY)

HUD Reviews and Approves 2008 Action Plan

June 30, 2008

May 16, 2008

Conduct Public Hearings and Present 2008 Action Plan for required 30-day public comment period

Citizen Participation, input , consultations, and revise previous Consolidated/Action Plan Solicit RFPs for proposed activities

Conduct Public Hearings and Present Consolidated/Action Plan for required 30-day public comment period

FALL 2006

2007 PY Annual Action Plan Submitted to HUD Field Office (45 days before the start of the PY)

May 16, 2007

End of 2006 Program Year June 30, 2007

HUD Reviews and Approves Consolidated Plan/2007 Action Plan

Sept. 28, 2007 2006/2007 CAPER due to HUD (90 days after the end of the PY)

FALL 2007

Citizen Participation, input , consultations, and revise previous Consolidated Plan/Action Plan. Solicit RFPs for proposed activities

2005/2006 CAPER due to HUD (90 days after the end of the PY) Sept. 28, 2006

July 1, Start 2007/2008 PY

Implement 2007 Program Activities

Implement 2006 Program Activities

Complete 2006 Program Activities

July 1, Start 2008/2009 PY


CON PLAN & CPMP CPMP = Consolidated Plan Management

Process

Optional tool to assist grantees in meeting the requirements of Con Plan Comprised of 19 different documents

Allows grantees to submit Con Plan materials to HUD almost entirely in e-format

HELP LINE – 1-877-483-8282

Grantee may submit Con Plan, Action Plan & CAPER in format that they have used in the past May also combine parts of the CPMP with formats currently

used by grantees


THE CONSOLIDATED PLAN (cont.)

Requires Citizen participation

HUD Reviews and Approves Con Plan Submitted to local field office at least 45 days prior to

start of program year

August 16 is annual DEADLINE for submission

Amendments can be made

Annual performance reporting measured against Con Plan goals and activities


WHO WILL MANAGE & IMPLEMENT ACTIVITIES?

Grantees Options: Grantee staff

Subrecipients

Community-Based Development Organizations (CBDOs)

Community-Development Finance Institutions (CDFIs)

Faith-Based Organizations

Contractors


SUBRECIPIENT DEFINED

A Public or Private nonprofit organization/ agency receiving CDBG funds from grantee for eligible activities

A for-profit agency assisting microenterprises may also be a subrecipient

Institutions of higher learning may be subrecipients

Who is not a subrecipient?

CBDOs are not automatically subrecipients

Procured contractors are not subrecipients

Beneficiaries of assistance are not subrecipients



SUBRECIPIENT AGREEMENTS

A written agreement MUST be executed before funds are disbursed

Minimal required elements: Statement of work

Records and reports

Program income

Uniform administrative & other federal requirements

Suspension/termination & reversion of assets

Conditions for religious organizations


COMMUNITY BASED DEVELOPMENT ORGANIZATIONS

Reg cite §570.204

CBDOs may carry out only certain types of projects: Neighborhood revitalization

Community economic development

Energy conservation

All activities undertaken by a CBDO must fall into 1 of these 3 categories


CBDO ACTIVITIES

Possible activities include (but are not limited to): New housing construction (can only be carried out by

a CBDO) in CDBG

Job training not subject to public service cap

Neighborhood Revitalization Strategy Area (NRSA) public services not subject to the public service cap

Other economic development activities



CBDO REQUIREMENTS

Organization must: Be organized under state/local law for specific

community development activities

Operate in specific geographic area within grantee’s jurisdiction

Have as its primary focus the improvement of economic/ physical/social aspect of service area, particularly for low/mod persons

Have a governing body of at least 51% low/mod rep’s


COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS

A community-based lending institution

CDFI fund is managed by the Department of Treasury beginning in 1994

CDFIs have these characteristics: Promote community development

Serve an investment area or targeted population

Provide loans or development investments and development services

Maintain accountability to residents

Are not an agency of government


CDFI FLEXIBILITIES

Special consideration for CDFI activities under CDBG regulations

Flexibilities apply regardless of whether CDFI funded by Treasury program or not

For any CDFI, may aggregate jobs created/retained by all businesses for determining low/mod benefit



CDFI FLEXIBILITIES (cont.)

When CDFI charter limited to a 51% LMI investment area: Job activities qualified as meeting area benefit

Scattered-site housing may be considered a single structure

ED activities may be exempt from aggregate standards


FAITH-BASED ORGANIZATIONS

Rule changed in 2003

No longer need to set up separate nonprofit

Can undertake all CDBG eligible activities but cannot: Support inherently religious activities

Discriminate in employment on basis of religion for staff working on CDBG programs

Discriminate in serving eligible beneficiaries


CONTRACT ADMINISTRATORS

Not a CBDO or subrecipient

Must be competitively procured under Part 85 A state may use part 85, or its own procurement

rules

Use when activity: Is discrete

Has a defined beginning and end date

Is for a specific project



ACTIVITY SELECTION PROCESS Subrecipients, CBDOs and CDFIs may

be “picked” by the grantee in any manner

Four typical models: Formal application process (or RFP)

Limited application process

RFQ process

Open door (unsolicited) process

Most grantees use a combination

Helpful information on application contents & evaluation in the training manual


NANATIONATIONALL OOBBJECJECTTIVESIVES

BASICALLY CDBG

NATIONAL OBJECTIVES

Reg cite §570.208, 570.480

All CDBG activities must result in one of the following: Benefit low/mod income persons

Prevent or eliminate slums and blight

Meet an urgent need




LMI AREA BENEFIT

URGENT NEED LOW/MOD

Area Benefit

Limited Clientele

Housing Jobs

SLUM/BLIGHT

Area Basis

Spot Basis

Urban Renewal

NATIONAL OBJECTIVES

Urban renewal objective not allowed in state program

LOW/MOD BENEFIT AREA BENEFIT

Activities that benefit all residents of an area

Typical activities: water/sewer, parks, community centers

Must determine service area of activity Based on reasonable assumptions as to who would

access the facility, service, etc.

Area must be primarily residential


LOW/MOD BENEFIT AREA BENEFIT (cont.)

Area must be at least 51% LMI persons

Typically use annual Census data (July 1)

Some entitlement grantees are “exception communities” (these grantees are allowed to go below 51%)

Can conduct survey using HUD approved methodology See guidance at Notice CPD-05-06




LMI LIMITED CLIENTELE

URGENT NEED LOW/MOD

Area Benefit

Limited Clientele

Housing Jobs

SLUM/BLIGHT

Area Basis

Spot Basis

Urban Renewal

NATIONAL OBJECTIVES


LOW/MOD BENEFIT LIMITED CLIENTELE Activities that benefit specific populations (e.g.,

services for seniors; homeless shelters; micro loan programs)

Options for meeting limited clientele:

51% of participants are documented as LMI

Participation limited to LMI only Presumed clientele Activity must exclusively serve: elderly, severely disabled

adults, homeless persons, illiterate adults, migrant farm workers, abused children, persons with AIDS or battered spouses

Nature and location indicate low/mod benefit


LIMITED CLIENTELE (cont.)

Some specific activities are unique

Removal of architectural barriers (some activities); or

Microenterprise activities with LMI owners; or

Certain types of job training efforts




LMI HOUSING

URGENT NEED LOW/MOD

Area Benefit

Limited Clientele

Housing Jobs

SLUM/BLIGHT

Area Basis

Spot Basis

Urban Renewal

NATIONAL OBJECTIVES


LOW/MOD BENEFIT HOUSING

This is the only L/M national objective for housing activities

To meet the housing national objective, structures must be occupied by low/mod households

Typical activities: homeowner unit rehab, rental acquisition and rehab, homebuyer assistance

Documented based on unit occupancy:

One unit structures occupied by LMI

One unit of duplex occupied by LMI

51% of 3+ units LMI occupied by LMI


LOW/MOD BENEFIT HOUSING (cont.)

May have less than 51% LMI occupancy only under certain circumstances

Assist the development cost of multi-family non-elderly new construction AND

At least 20% of the units LMI occupied AND

Portion of CDBG cost is no greater than LMI occupancy

Aggregation allowed in some instances

CDFI

NRSA HUD, Office of Block Grant Assistance Slide 51


LMI JOBS

URGENT NEED LOW/MOD

Area Benefit

Limited Clientele

Housing Jobs

SLUM/BLIGHT

Area Basis

Spot Basis

Urban Renewal

NATIONAL OBJECTIVES



JOB CREATION & RETENTION Activities related to economic opportunity

Typical activities: business loans, commercial rehabilitation, infrastructure to a business

In order to meet this criteria, activities must create or retain permanent jobs

AND

51% of the jobs created/retained must be available to or held by LMI persons

Jobs counted on full time equivalent (FTE) basis


SLUM & BLIGHT

URGENT NEED LOW/MOD

Area Benefit

Limited Clientele

Housing Jobs

SLUM/BLIGHT

Area Basis

Spot Basis

Urban Renewal

NATIONAL OBJECTIVES





SLUM AND BLIGHT AREA BASIS

Activities designed to address dilapidated physical environment Not based on income of residents

Typical activities: code enforcement, infrastructure, commercial rehabilitation

Must be defined area & meet definition of slum/blighted area under state/local law AND


SLUM AND BLIGHT AREA BASIS (cont.)

Meet either (A) or (B) below: (A) The public improvements in the area are in a general

state of deterioration

(B) At least 25% of properties throughout the area experience 1 or more of the following conditions:

Physical deterioration of buildings or improvements

Abandonment of properties;

Chronic high occupancy turnover rates or chronic high vacancy rates in commercial/industrial buildings;

Significant declines in property values or abnormally low property values relative to other areas in community; or

Known or suspected environmental contamination.


URGENT NEED

URGENT NEED LOW/MOD

Area Benefit

Limited Clientele

Housing Jobs

SLUM/BLIGHT

Area Basis

Spot Basis

Urban Renewal

NATIONAL OBJECTIVES



URGENT NEED NATIONAL OBJECTIVE

Used to address emergency situations

Typical activities: infrastructure, interim assistance, rehab of community facilities

To meet the urgent need test: Existing conditions pose serious & immediate threat to

health/welfare of community

Existing conditions are recent or recently became urgent

Generally 18 months

Recipient cannot finance on its own

Other funding sources not available



NSP National Objectives vs. CDBG National Objectives

CDBG National Objectives NSP National Objectives Benefit low/mod income persons (LMI) ONLY ONE: Benefit low/mod/middle

income persons (LMMI) • Low/mod/middle Housing (LMMH) •Low/Mod/Middle Area Benefit (LMMA)

*Note that although NSP changes the low and moderate income requirement level of the CDBG program, the remaining requirements of 24 CFR 570.208(a) and 570.483(b) regarding area benefit, housing, and limited clientele benefit remain unchanged.

Prevent or eliminate slums and blight (SBA)

Meet an urgent need

Low Income Housing 25% Set-Aside

LH 25 National Objective At a minimum 25% of NSP funds must create housing

for low-income residents (50% of Area Median Income)

25% of total NSP2 funds, not beneficiaries; not applied to each activity

ONLY abandoned or foreclosed residential properties

Must provide ‘Permanent’ Housing – No group homes or shelters

***Grantees are encouraged to go above the 25% minimum



LMI INCOME DOCUMENTATION

Annual income definitions, options: Section 8 Annual Income (24 CFR Part 5)

Census Long Form

IRS 1040 Series (Long Form)

Same definition must be used within programs or activities

Income is that of all family or household members for upcoming 12-month period


LMI INCOME DOCUMENTATION (cont.) Several options for documentation: Full 3rd party documentation (e.g., an employer)

Evidence of qualification under another program at least as restrictive as CDBG (e.g., public housing, etc…)

Evidence that assisted person is homeless

Verifiable self-certification from assisted person WARNING on using this method: If self-certification

determined to be incorrect or fraudulent, project maybe ineligible

Referral from state, county or local employment agencyor other entity that agrees to determine income and maintain documentation for grantee


HOHOUSIUSINNGG AANND RD REELLAATTEED AD ACCTITIVIVITITIEESS

BASICALLY CDBG


APPROACHES TO HOMEOWNER REHABILITATION

Many rehabilitation program options

Assistance can be in form of grants, loans, loan guarantees, interest subsidies

Minor, moderate & substantial rehab possible; Grantee: May/may not involve bringing all items up to code

May/may not adopt property or housing standards

May include improvements to enhance livability of unit


APPROACHES to HOMEOWNER REHABILITATION (cont.)

Reconstruction:

CDBG allows as rehab activity [24 CFR 570.202]

Same lot -- not necessarily standing at time of project commitment

Manufactured housing is allowed, if part of the community’s permanent housing stock


APPROACHES TO HOMEOWNER REHABILITATION (cont.)

Special purpose programs OK Energy efficiency and weatherization

Emergency repair

Handicapped accessibility

CDBG entitlement regulations allows refinancing if part of rehab and makes that rehab affordable No refinancing only!



Costs of labor and materials eligible

Related eligible costs: Initial homeowner warranty premium

Hazard insurance premium (except with grant)

Flood insurance premium

Lead-based paint testing & abatement

Purchase of construction equipment not eligible Tool lending programs are OK (sweat equity approach)

Be sure to follow CDBG rules on eligible rehab costs (States follow HCDA) PLUS A-87 cost reasonableness


HOMEOWNER REHAB ELIGIBLE COSTS

HOME PURCHASE ELIGIBLE ACTIVITIES

Two ways to approach home purchase activities: Assistance to homebuyers

Development assistance

Eligible activities for assistance to homebuyers: • As direct homeownership assistance -- now a

separate & permanently eligible activity

• As a public service activity (subject to cap)


HOME PURCHASE ELIGIBLE ACTIVITIES (cont.)

Direct homeownership assistance means: Up to 50% of required downpayment

Payment of reasonable closing costs

Principal write-down

Acquisition financing

Acquisition of mortgages guarantees & PMI

As public service, downpayment assistance only is eligible

Individual Development Acct’s (IDAs) Dedicated savings accounts

Use program funds as match to owner’s contribution

Can deposit funds in IDA if family eligible



HOME PURCHASE ELIGIBLE ACTIVITIES (cont.)

Assistance for homeownership Acquisition with rehabilitation

Activities in support of home ownership:

Acquisition (if nonprofit/public developer)

Infrastructure (if public ownership)

Clearance and demolition

New housing construction only by CBDOs as part of eligible CBDO project in CDBG

In NSP, new construction is an eligible activity for any grantee not just CBDOs


APPROACHES TO RENTAL HOUSING Many possible approaches: Acquisition

Rehabilitation

New construction

Acquisition: Grantees subsidize the purchase

In return units are rented to LMI persons at affordable rent

Must be public or nonprofit purchaser


APPROACHES TO RENTAL HOUSING (cont.)

Rehabilitation Can be combined with acquisition

CDBG mandates no standard

Can do historic preservation

Conversion = changing something into affordable housing

Reconstruction = re-building same size structure on same site



ELIGIBLE RENTAL PROJECTS

Project ownership can be public or private

Mixed-use buildings are allowed Can pay for both commercial and residential

Mixed-income units are also possible

Special needs projects are allowed SRO & transitional housing

Can develop facilities but these are not “housing” Not subject to new construction ban

Must be owned by public agency or nonprofit


RENTAL HOUSING ELIGIBLE COSTS

Expenditures may include: Labor & materials

Refinancing (if necessary & appropriate)

Energy efficiency improvements

Utility connections

Lead-based paint activities

Rehabilitation services (loan processing, specs, etc.)

Handicapped accessibility improvements


NEW HOUSING CONSTRUCTION

CDBG cannot generally be used to construct rental housing Exception for housing of last resort under URA

Exception for CBDOs (§105(a)(15) for states)

Exception for special needs facilities (considered public facilities)

CDBG can be used to support new construction

Acquisition and disposition Site clearance and assemblage Site improvements



Housing services may be eligible as:

Public service activity – subject to 15% Cap

Part of other CDBG activity (program delivery) OR

As separate activity when activities linked to HOME Program activities (HOME income limits apply)

As public service, housing services may fit under Area Benefit or Limited Clientele of Low/Mod National Objective

As part of CDBG or HOME housing activity, housing services must qualify under the Low/Mod Housing National Objective


HOUSING SERVICES

INELIGIBLE HOUSING ACTIVITIES

New construction, unless by CBDO

Direct mortgage guarantees

Purchase of construction equipment

Mortgage or utility payments, except when: As an emergency, can provide up to 3 consecutive

months, with payments made to service provider

When provided as a loan

When provided by CBDO as part of CBDO project


HOUSING NATIONAL OBJECTIVES

Most common national objective is LMI housing

Only L/M national objective that can be used

To meet the housing national objective, structures must be occupied by low/mod households

One unit structures occupied by LMI

One of two duplex units occupied by LMI

More than two units require 51% units occupied by LMI




Multi-family housing:

51% of units in each structure occupied by LMI households, AND

Rents must be affordable; grantee determines “affordable” and makes public

If carried out by CDFI within target area or in NRSA, may aggregate buildings to meet 51%


Some activities may qualify under Slum/ Blight Area Basis or Spot Basis

If Slum/Blight Area Basis: Area must meet requirements & rehab must address

deterioration

Building must be substandard & all deficiencies must be addressed before less critical work done

If Spot Basis, rehab limited to elimination of public health/safety issues



NSP USES AND ACTIVITIES HERA defines five “uses” of funds

Generally, uses of HERA funds must be CDBG eligible

Some exceptions

HUD has cross referenced HERA uses to CDBG activities

HUD permission needed if CDBG activity not on list

Need to understand key terms for types of eligible properties to understand uses



NEW DEFINITION OF ABANDONED

Abandoned — A home or residential property is abandoned if either:

a) mortgage, tribal leasehold, or tax payments are at least 90 days delinquent, or

b) a code enforcement inspection has determined property is not habitable and owner has taken no corrective actions within 90 days of notice, or

c) property is subject to court-ordered receivership or nuisance abatement related to abandonment pursuant to state or local law or otherwise meets a state definition of an abandoned home or residential property.


NEW DEFINITION OF FORECLOSED

Foreclosed: A home or residential property has been foreclosed upon if any one of the following conditions apply: a) the property’s current delinquency status is at least 60 days

delinquent, or

b) property owner is 90 days or more delinquent on tax payments, or

c) under state, local, or tribal law, foreclosure proceedings have been initiated or completed, or

d) foreclosure proceedings complete and title transferred to intermediary aggregator or servicer that is not an NSP grantee, subrecipient, contractor, developer, or end user.


DISCOUNT/APPRAISAL REQUIREMENTS

When tax payments are 90 days delinquent,

a property could be defined as either “foreclosed”

and “abandoned”

However, if the property meets both the definitions,

the property should be considered “foreclosed” and

the NSP discount and appraisal requirements would

apply.



ELIGIBLE USE A

Eligible Use CDBG Eligible Activities

A. Financing mechanisms • Activity delivery cost for an eligible

for purchase & activity (designing & setting it up)

redevelopment of • The financing of an NSP eligible

foreclosed upon homes & activity – such as soft second loans,

residential properties loan loss reserve, equity sharing

• Housing counseling for program

participants

• Other activities in Uses B-D


Common Questions: Eligible Use A

When is this activity used?

Must it be used whenever financing is provided directly to homebuyer or developer?

Can this activity be related to redevelopment into commercial property?


ELIGIBLE USE B

Eligible Use

B. Purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties

CDBG Eligible Activities

• Acquisition

• Disposition

• Relocation

• Direct homeownership assistance

• Eligible rehabilitation and preservation activities for homes and other residential properties

• Housing counseling for program participants



Common Questions: Eligible Use B

Does a unit count as foreclosed if it is purchased prior to completion of legal action?

Can NSP funds be used to acquire a foreclosed property if the bank that foreclosed on the home has designated an asset manager as the seller?

Can rehabilitation be done on units purchased by buyers out of foreclosure (without NSP assistance)?


Common Questions: Eligible Use B (cont.)

What criteria must be met for NSP funds to be used for rehabilitation of a private purchase?

If vacant, abandoned, blighted property owes back taxes to grantee, can NSP funds be used to forgive tax liens as part of acquisition process?


ELIGIBLE USE C


C. Land banks for homes and

residential properties that have been foreclosed upon

• Acquisition

• Disposition (includes maintenance)

• Housing counseling for program participants

Land Bank = government or non-government entity temporarily assembles, manages, disposes of homes •Must operate in specific defined area

•10 year reuse plan



Common Questions: Eligible Use C

Can land banked properties be rented and used while still held in land bank?

What rules apply to re-use of land banked properties?

What is national objective for land bank?


ELIGIBLE USE D


D. Demolish blighted structures

• Clearance, for blighted structures only

Must be blighted, defined in Action Plan

Can be any type of unit or property • Residential, commercial , industrial

Must meet a national objective • Some projects based on demo itself, most on re-use of site


Common Questions: Eligible Use D

How to determine the right national objective?

Does “change of use” apply?

Can a grantee do demolition of public housing?

Can subrecipient purchase home, demolish it, and build new home in its place and sell it to eligible homebuyer?




• Acquisition E. Redevelop • Disposition demolished or • Public facilities and improvements

vacant properties • Housing counseling public services (limited to purchasers or tenants of redeveloped properties)

• Relocation • New housing construction • Direct homeownership assistance • 570.204 activities by CBDOs • Rehabilitation • Housing counseling for program participants

ELIGIBLE USE E

Any property or unit type HUD, Office of Block Grant Assistance Slide 94

Common Questions: Eligible Use E

Must new construction be done by CBDO?

Can commercial properties be developed under this use?

Can activities done under Eligible use E count towards the 25% set-aside?

Can NSP funds be used for infrastructure charges such as roads, water, sewer lines, power lines, etc?


INELIGIBLE USES

If ineligible under CDBG, usually ineligible under NSP New construction is exception, CBDO not needed

Ineligible under NSP: Foreclosure prevention

Demolition of non-blighted structures

Acquisition of property or structures that are not abandoned, foreclosed or vacant (eligible use E)



INELIGIBLE USES (cont.)

Need to be careful when addressing tax or other foreclosed properties owned by grantee

Cannot use NSP funds to reimburse grantee for its tax-foreclosed units Can only pay for reasonable title transfer costs

Can pay for back taxes as part of acquisition cost when foreclosed unit owned by private lender


OTHEROTHER REAL PRREAL PROPEROPERTYTY ACACTITIVVIITIESTIES

BASICALLY CDBG

OTHER REAL PROPERTY ACTIVITIES

Acquisition possible when undertaken by public agency or nonprofit Must meet national objective based on end use

Disposition involves selling property assisted with CDBG Can pay for transfer costs such as legal docs or

preparation of legal documents

Clearance is site clean-up or demolition Often is combined with other eligible activities



TAX FORECLOSED (IN REM) HOUSING

Covers eligible costs for properties acquired through tax foreclosure (“In Rem” is Latin for power against the thing [a court’s power to take property]) Not yet in regulations – in statute

Can do: Essential repair of units

Operating expenses to maintain habitability

Used to prevent abandonment and deterioration in LMI areas

National objective is usually LMI area benefit

Slum blight may be possible


CODE ENFORCEMENT ACTIVITIES

Costs for code enforcement eligible if: Enforcement takes place in a deteriorated or deteriorating area

AND the enforcement is accompanied by public or private improvements or services

Eligible costs include: Inspection (e.g., salaries and overhead)

Enforcement (e.g., salaries and legal costs)

Costs of correcting violations is not eligible as code enforcement, but may be eligible as rehab


CODE ENFORCEMENT (cont.)

Typically use Low/Mod Area Benefit

Area must contain 51% low/mod persons and

Area must be primarily residential in nature

May also use Slum/Blight Area Basis

Area must meet qualifying requirements

Activity must address slum/blight conditions



ELIGIBLE LEAD-BASED PAINT ACTIVITIES

Costs for evaluation and reduction of lead hazards in housing Inspection

Testing of surfaces

Interim Controls or Abatement

Relocation

Lead paint evaluation and reduction is eligible as an independent activity evenwhen buildings are not scheduled for rehab


LEAD-BASED PAINT ACTIVITIES (cont.)

Typically use LMI Housing national objective (LMH) One unit structures occupied by LMH

One of two duplex units occupied by LMH

More than two units require 51% units occupied by LMH

Slum/Blight Area Basis also possible Area must meet requirements

Activity must address slum/blight conditions


HISTORIC PRESERVATION ACTIVITIES

Funds may be used for preservation, rehabilitation, or restoration of historic properties – public or private

Historic properties include those: Listed or eligible to be listed in the National Register of

Historic Places

Listed in a State or local inventory of historic places

Designated as a State or local landmark or historic district by appropriate law or ordinance



HISTORIC PRESERVATION ACTIVITIES (cont.)

Range of national objectives possible:

Low/Mod Housing criteria, if residential

Low/Mod Area Benefit, Limited Clientele, or Job Creation/Retention if non-residential

Slum/Blight Area Basis, Spot Basis, or Urban Renewal (possible for entitlements only)


RENOVATION OF CLOSED BUILDINGS

CDBG can be used to transform obsolete buildings into new uses, such as: Housing – Note: Renovation is not considered new

construction

Economic development projects

Public facilities

National objective depends upon the end use of the building


HANDICAPPED ACCESS

Carry handicapped accessibility improvements by removing barriers Eligible under rehab activity if carried out on existing

residential, commercial, or industrial property

Otherwise, must be carried out as part of another eligible activity (e.g., public facility)

National objective depends upon activity Typically low mod limited clientele



ENERGY EFFICIENCY Wide range of activities possible:

Weatherize home or apartment building

Install solar and wind equipment

Finance energy-efficient rehabilitation

Establish energy standards, including recognition of the use of energy star for appliances and buildings

Provide audits and home energy ratings

Develop energy facilities

Eligible activity category depends on type

Must meet a national objective Will depend on type of energy efficiency activity


GREEN BUILDING INVESTMENTS

Alternative materials

Recycled materials

Low VOC paint

Formaldehyde-free cabinets

Solar panels

Green roofing


BROWNFIELDS REMEDIATION & DEVELOPMENT

Brownfields are vacant or underused industrial sites with environmental contamination

CDBG use for: Acquisition

Remediation (under clearance)

Redevelopment for economic development

Other eligible activities as applicable

National objective based on type of activity funded New flexibility in spot slum blight national objective for brownfields

Brownfields Economic Development Initiative Grants (BEDI) may be available



PPUUBLIBLICC FFAACICILILITITIESES

BASICALLY CDBG

ELIGIBLE PUBLIC FACILITIES ACTIVITIES Infrastructure Streets, sidewalks

Water, sewer

Neighborhood facilities Parks, playgrounds

Recreational facilities

Facilities for special needs populations Homeless shelters

Group homes


PUBLIC FACILITIES AND NSP2

Public facilities ONLY allowed under Redevelopment (Use E)

NSP2 Redevelopment ONLY for Housing

(No parks, gardens, homeless shelters)



PUBLIC FACILITIES AND NSP2 (cont.)

Examples of acceptable NSP2 public facilities:

Water lines in public street for affordable housing project

Public sidewalks adjacent to redeveloped apartment complex

Public streets in redeveloped NSP subdivision CAN DO PUBLIC IMP’S, THEN TRANSFER TITLE


INELIGIBLE PUBLIC FACILITIES ACTIVITIES

Maintenance and repair of public facilities Exception for handicapped accessibility

Operating costs Exception for costs related to operating a CDBG public

service activity

Buildings for general conduct of government (e.g., city hall) Some exceptions


PUBLIC FACILITIES NATIONAL OBJECTIVES

Infrastructure improvements will typically qualifyunder: Low/Mod Area Benefit Surveys common for small service areas within Census

Tracts (must have HUD approved survey methodology)

Low/Mod Limited Clientele (facilities for persons withspecial needs)

LMI Housing national objective used IF publicimprovements are for purpose of providing Low/Mod Housing



PPUUBLIBLICC SESERRVVIICCEESS

BASICALLY CDBG

ELIGIBLE PUBLIC SERVICE ACTIVITIES

Wide range of public services possible

Includes services related to:

Employment

Job training

Crime prevention/public safety

Child care

Health

Health services

Substance abuse services HUD, Office of Block Grant Assistance Slide 119

PUBLIC SERVICE ACTIVITIES (cont.)

In CDBG, annual obligations for public service activities may not exceed: 15% of annual entitlement grant PLUS 15% of last year’s program income

In NSP, the only eligible public service activity is homebuyer counseling (though this can also be an activity delivery cost)



ECECONONOMICOMIC DEVDEVEELOPLOPMMENENTT ANDAND SECSECTIONTION 108108

BASICALLY CDBG

ELIGIBLE ECONOMIC DEVELOPMENT ACTIVITIES

Special economic development activities

Community-based development organizations

Technical assistance to businesses

Microenterprise activities

Commercial rehabilitation

Infrastructure to assist businesses

Job training


SPECIAL ECONOMIC DEVELOPMENT ACTIVITIES

Acquire, construct, rehabilitate, reconstruct or install commercial/industrial buildings or equipment By recipient or subrecipient only

Assistance to for-profit businesses

Economic development services in connection with special economic development activities


MICRO ENTERPRISE ASSISTANCE


SPECIAL ECONOMIC DEVELOPMENT (cont.)

Special economic development has flexibility in types of assistance to businesses Grants

Loans

Guarantees

Technical assistance & support services

May meet several different national objectives; depends on business & location

Triggers the requirement for public benefit standards


Helps reduce risk of business failure

Often focused on business plan development or legal and accounting issues

Often offered in conjunction with financial assistance

Critical to programs directed to start-ups DUNS # not required for TA


TECHNICAL ASSISTANCE TO BUSINESSES

MICRO ENTERPRISE ASSISTANCE

CDBG can fund micro enterprise assistance

Micro enterprise defined as: Owners or persons who work toward developing,

expanding or stabilizing a business

Commercial enterprise with employees (including owner)

Note: This definition differs from SBA


SECTION 108 Loan Guarantees


COMMERCIAL REHABILITATION

Rehabilitation of commercial or industrial structures – §570.202(a)(3)

If private, for-profit owner: Rehabilitation limited to exterior of building and

correction of code violations

Other improvements must be carried out under the special economic development category §570.203

Not subject to public benefit standards if carried out under §570.202(a)(3)


SECTION 108 Loan Guarantees

Method of expanding CDBG funds by using future CDBG grant as collateral to borrow funds

Section 108 process basics:

1. Community applies to HUD

2. Based on community’s pledge, HUD issues promissory notes

3. $$$ from sale of notes used for Section 108 eligible project

4. Notes are repaid


OTHEROTHER EELLIGIGIBIBLELE ACACTIVTIVIITIESTIES

BASICALLY CDBG


OTHER ELIGIBLE ACTIVITIES

Many other CDBG eligible activity options not discussed in detail in these webcast sessions, including:

Interim assistance

Relocation

Loss of rental income

Technical assistance

Assistance to institutions of higher learning

Payment of non-federal share

Urban renewal completion


RELOCATION

Must comply with the URA and 104(d)

May pay for: Temporary relocation

Permanent relocation

May be related to CDBG-assisted project or other activity


RELOCATION (cont.)

National objective depends on whether relocation is voluntary or required

If required under URA: Meets a LMI national objective if the associated CDBG

project meets national objective

If voluntary: Can qualify based on re-use of the property OR

Income of assisted recipients

Activity itself does not need to meet national objective HUD, Office of Block Grant Assistance Slide 132


LOSS OF RENTAL INCOME

Used to compensate owners for loss of rental income due to CDBG activities Used while holding units pending relocation of displaced

households

Not used to simply cover on-going rental losses

National objective based on objective for original CDBG activity


REVREVIITATALIZATIONLIZATION SSTTRARATETEGIESGIES

BASICALLY CDBG

LOCAL REVITALIZATION AREAS

CDBG grantees are allowed to designate geographic target areas May offer funding or certain types of programs in only

those areas

No HUD requirements on how to designate, criteria for selection of target areas

State or local law may apply

Indicate the designation of such areas in

Con Plan/Action Plan

IDIS project set-ups HUD, Office of Block Grant Assistance Slide 135


NEIGHBORHOOD REVITALIZATION STRATEGY AREAS

Multi-faceted approach to address needs in neighborhoods

Targets resources and efforts

Approved strategies offer flexibility in using CDBG

Done as a part of or amendment to Consolidated Plan

HUD is developing new notice


FIFINANANNCCIIAAL ML MAANAGNAGEEMMEENTNT

BASICALLY CDBG

GENERAL ADMIN VS. ACTIVITY DELIVERY

Direct cost of carrying out activity is considered activity /program delivery cost Example: cost of running a rehab program (taking

applications, writing specs, inspections, etc.)

Other = general administration

General administration is capped at 20% for CDBG

This cap is set at 10% for NSP



General management, oversight & coordination

Two options for charging salaries: Entire amount

Pro rata share

Direct v. indirect

Must maintain supporting documentation by timesheets or indirect cost allocation plan


GENERAL ADMIN AND PLANNING COSTS

ADMINISTRATIVE AND PLANNING COSTS (cont.)

Other eligible admin/planning functions include: Public information

Fair Housing

Preparation of Consolidated Plan

Submission of applications for Federal programs

Admin expenses to facilitate housing

Overall program management of: EZ/ECs HOME program

Planning, policy work, and studies


ACTIVITY DELIVERY COSTS (ADC) Some costs related to administering

programs may be charged to the activity Activity delivery costs for staff & subrecipients Rehabilitation delivery costs HOME project delivery costs Housing counseling Energy auditing Work specifications Loan processing Inspections Tenant selection Management of TBRA

None of these project delivery costs count against the CDBG admin cap




ADMIN VS. ADC Ex. RESIDENTIAL REHAB PROGRAM

Phases of Development

CDBG Grantee Tasks Activity Delivery General Administration

Pre-Development

Managing comprehensive project design issues, site acquisition, and relocation

Analyze sub-market where project is proposed for need, rent levels, costs, etc.

Analyze overall market conditions and develop financial guidelines.

Promoting municipal CDBG funded programs and activities

Create and produce brochure for specific project. Present project to housing developers and notify them of upcoming request for proposals (general community promotion is ineligible).

Design and oversee overall marketing plan. Announce marketing plan to elected officials and chief executive.




CDBG Grantee Tasks

Activity Delivery General Administration

Development

Writing and processing loan agreements

Negotiate specific loan terms and conditions for approved project; negotiate and close loan agreement for specific project.

Negotiate with lenders community-wide to solicit participation in housing projects; develop standards and requirements for all loan agreements.

Soliciting, reviewing and writing responses to request for approvals (RFP)

Write and issue RFP, accept and process proposals.

Manage staff development for selection process and provide necessary resources.



CDBG Grantee Tasks

Activity Delivery General Administration

Post-Development

Writing and responding to correspondence related to construction issues

Collect detailed data on individual projects and gather input from IDIS staff.

Meet with HUD officials, develop staff capacity for DRGR and other systems, provide reports to Mayor and Council.

Relocation activities

Relocating existing residents in order to rehabilitate a specific housing project.

Budget setting, staff reviews

Evaluation

Provide detailed analysis of individual projects for review by upper management.

Assess overall progress of all individual projects for timeliness, quality housing, and compliance; visit sites for ceremonial activities such as ground breaking or grand opening.



ADMINISTRATIVE CAP

Obligations for planning and administration may not exceed the amount of: 20% of annual entitlement grant and the estimated

program income for the current Program Year

10% of NSP grant and 10% of Program Income

Cap is imposed through annual appropriations legislation, not regs.


CALCULATING ADMIN CAP

Total entitlement grant amount $1,000,000

Surplus from Urban Renewal -

Program income received by grantee and its subrecipients $50,000

Total: the basis for calculating the cap $1,050,000

Multiplied by 20 percent x 0.20

Maximum dollar level that may obligated and charged to Planning and $210,000 Capacity Building and Program Administration


DETERMINING COMPLIANCE WITH THE ADMIN CAP

Total costs under Planning and Administration for the program year $150,000

Add unliquidated obligations for planning and administration activities, $35,000 as of the end of the program year

Subtract unliquidated obligations for planning and administration ($20,000) activities, as of the end of the preceeding program year

Net obligations for planning and administration during the program $165,000 year

Compare to maximum dollar level calculated above to determine $210,000 planning and administrative cost cap



Costs incurred prior to effective date of grant agreement Grant agreement effective date is latter of:

Program year start date, OR

Date Con Plan received by HUD

Activity must meet applicable rules & requirements and must be in the Action Plan

Total must not exceed $300,000 or 25% of grant amount, whichever is greater

Pre-award rules for states are at the UGLG level HUD, Office of Block Grant Assistance Slide 148

PRE-AWARD COST RULES

REVOLVING FUND

A separate fund/account for specific activities that generate repayments for reuse with similar activities (hence revolving funds)

Must be in an interest bearing account Interest earned on fund remitted to HUD

Interest paid by borrowers & loan repayments are program income



LUMP-SUM DRAWDOWNS

Lump-sum drawdowns may be used to establish a rehabilitation loan fund with a private financial institution

If States wish to do lump sum, they’ll use entitlement regulations

Subject to certain limitations:

Cannot be used solely for investment

Rehabilitation administrative costs not eligible

Cannot exceed the grant amount for specific program


LUMP SUM DRAWDOWNS (cont.)

Grantee must execute a written agreement with a lending institution

First funds must be committed within 45 days of deposit

Disbursements must begin within 180 days

Financial institution must provide specific considerations in exchange for deposit

Account must earn interest

Interest is considered program income HUD, Office of Block Grant Assistance Slide 151

ESCROW ACCOUNTS

Escrow account is a trust account held in a borrower's name to pay certain obligations

Escrow accounts provide an excellent way to pay contractors on an owner’s behalf

CDBG rules on escrow accounts: Used for loans and grants for primarily residential

structures

Require an executed contract with homeowner authorizing escrow account


ESCROW ACCOUNTS (cont.)

Funds deposited in account must be used within 10 working days

Limited to paying actual rehab costs

Account must be interest bearing & interest must be paid to HUD quarterly

Above requirements are for entitlements & are safe harbor for state programs



PROGRAM INCOME

What is PI? Money that comes back to the grantee or subrecipient that is generated by a CDBG activity: Proceeds from sale or lease of real property acquired

and/or improved with CDBG

Proceeds from lease of equipment purchased with CDBG

Gross income from use/rental of real or personal property acquired, constructed, improved (less costs incidental to generation of income)


What is program income:

Payments of principal & interest on loans made with CDBG

Proceeds from the sale of loans or obligations secured by loans made with CDBG

Interest earned on program income pending its disposition

Funds collected through special assessments on properties not owned/occupied by LMI persons


PROGRAM INCOME (cont.)

PROGRAM INCOME (cont.)

What is not program income?

Income received in a single year not exceeding $25,000

Income generated by some Section 108 activities

Proceeds of subrecipient fundraising

Funds collected through special assessment

Subrecipients’ proceeds from disposition of property five years or more after grant close-out



USE OF PROGRAM INCOME

Program income Use for eligible CDBG activities

Subject to all CDBG rules and regulations Examples: Procurement, labor standards, environmental,

etc.

Miscellaneous revenue is not subject to these rules

Can expend up to 20% of total program income for administration for CDBG Can expend up to10% of program income on admin

for NSP HUD, Office of Block Grant Assistance Slide 157

FIRST IN – FIRST OUT

Must use program income prior to drawing new CDBG funds from line of credit at HUD Program income cannot be held for specific projects

Program income cannot be banked

Exception: Revolving loan fund balances


PROGRAM INCOME REMITTANCE

Reg cite §570.504(b)(2)(iii)

Grantee must determine at end of program year whether it has excess program income

Excess must be returned to HUD’s Fort Worth CFO for deposit into a separate grantee account



CALCULATING EXCESS PROGRAM INCOME

(1) Determine aggregate amount of program income held by grantee and subrecipients

(2) Subtract immediate cash needs, revolving fund loan balances, lump sum drawdown balances, and cash used as security for Section 108

(3) Anything in excess of 1/12 of recent entitlement must be remitted


SAMPLE CALCULATION

Program income: $250,000 Less:

Immediate cash needs ($ 20,000) Revolving loan fund balance ($180,000) Lump sum draw down ($0) Cash held for 108 ($0)

Balance: $ 50,000

Annual CDBG entitlement: $1,920,000 1/12 annual entitlement: $ 160,000 Amount to be remitted: ($0)


MISCELLANEOUS REVENUE

Total amount of funds earned in a single year that is less than $25,000 not program income

Funds earned from certain types of activities carried out by certain nonprofits not program income

CBDOs

Nonprofits serving local development needs (state program only)



TIMELINESS

Timeliness refers to how quickly the grantee is able to commit and expend CDBG funds

Entitlement not allowed to have more than 1.5 times their annual allocation sitting in line of credit at U.S. Treasury

If the grantee chronically has more than 1.5 times their allocation in their line of credit, HUD can withhold future grants until the grantee effectively spends their existing resources

States do not have same requirement HUD, Office of Block Grant Assistance Slide 163

TIMELINESS FOR NSP2 Expenditure Deadlines:

NSP2 recipients must expend 50 percent of their NSP2 funds within 2 years and 100 percent within 3 years

These expenditure requirements refer to your original NSP2 allocation. Any program income expended would not count towards these expenditure deadlines.


UNIFORM ADMINISTRATIVE REQUIREMENTS

CDBG recipients must comply with federal admin guidelines & financial management requirements: Governmental entities/public agencies OMB Circular A-87 24 CFR Part 85 (except states, which may adopt their

own standard)

Nonprofit subrecipients OMB Circular A-122 24 CFR Part 84 (not applicable in state programs if

part 85 is not used)



OMB A-87/122

Establishes cost principles

Grantee is responsible for efficient and effective administration

Administer consistent with program rules and agreements

All costs must be reasonable, allowable, and allocable


ALLOWABLE COSTS

A-87/A-122 Identifies allowable and unallowable costs

Some costs are never allowed Examples of unallowable costs: entertainment,

alcohol, bad debts

Some costs are allowed but with certain conditions

Some costs depend on the federal funding source


ALLOWABLE COSTS (cont.)

Criteria for allowability Must be reasonable

Must conform to limitations

Must be in accordance with GAAP

Must not be included under another federally funded program

Must be adequately documented



COST REASONABLENESS

Cost is reasonable when it does not exceed what a prudent person would incur under similar circumstances

Consideration should be given to: Is cost necessary and ordinary?

Market prices for comparable goods and services

Individuals acted with prudence

Deviations from set policy



SOURCE DOCUMENTS

Records must be supported by source documents Explain basis of costs incurred

Actual dates of expenditure

Examples include cancelled checks, paid bills, payroll, etc.


COST ALLOCABILITY

Determine where to charge costs

Process known as cost allocation methods

And a cost allocation plan (re: direct & indirect costs [see beginning of FM])

GAAP provides guidance


PART 85/84 Part 85/84 covers two key topics:

Effective financial management systems

Procurement

Also covers: Pre-award

Property & equipment

Records

Close-out


EFFECTIVE FINANCIAL MANAGEMENT SYSTEMS

Under Part 85, effective financial management systems must:

Record all financial transactions

Relate expenditures to activities

Ensure compliance with laws and regulations


ACCOUNTING RECORDS

Records should sufficiently identify source and application of funds

Minimally, a records system must have: Internal Controls

Chart of Accounts

Transactions – Identify & Track



CIRCULAR A-133

If expend $500,000 or more in federal awards, get single or program audit Program audit allowed only if that agency expended

funds under only one Federal program

If less than $500,000, exempt from audit requirements for that year


AUDIT REQUIREMENTS

Audits due to federal clearinghouse no later than nine months after end of fiscal year Clearinghouse is supposed to send to HUD

Recipients must resolve audit findings

CPA mandatory


CHANGE IN USE

Applies to real property under a subrecipient’s control acquired or improvedwith $25K or more of CDBG If changed, property must:

Meet a national objective for five years after expiration of Subrecipient Agreement, OR

Must return $ at current market value and treat as CDBG program income

See 24 CFR 570.503


Sl de 180



CHANGE IN USE Applies to real property under the

grantee’s control acquired or improved with $25K or more of CDBG Must notify citizens and receive comments on change, &

If changed, property use must: Meet a national objective for five years after close-out

of the grant agreement, or Must return $ at current fair market value and treat as

CDBG program income

See 24 CFR 570.505 Note: State CDBG rule is based on $100k of CDBG

assistance

BASICALLY CDBG

PERFORMANCE MEASUREMENT,PERFORMANCE MEASUREMENT, RECORDKEEPING AND MONITORINGRECORDKEEPING AND MONITORING

HUD, Office of Block Grant Assistance i

HUD CPD OUTCOME FRAMEWORK

Outcome 1: Availability/Accessibility

Outcome 2: Affordability

Outcome 3: Sustainability

Accessibility for the purpose of creating

Suitable Living Environments

Accessibility for the purpose of providing

Decent Housing

Accessibility for the purpose of creating

Economic Opportunities

Affordability for the purpose of creating Suitable

Living Environments

Affordability for the purpose of providing Decent

Housing Affordability

for the purpose of creating Economic

Opportunities

Sustainability for the purpose of creating Suitable

Living Environments

Sustainability for the purpose of providing

Decent Housing

Sustainability for the purpose of creating

Economic Opportunities

Objective #1 Suitable Living Environment

Objective #2 Decent Housing

Objective #3 Economic

Opportunity

Outcome Statements


Appropriate documentation necessary to ensure compliance

Major categories of records to be kept: General administrative

Financial

Project/activity specific documents

National objective compliance

Subrecipients, CBDOs, CDFIs

Other Federal requirements

Have a strong and comprehensive filing system

Use checklists, logs and cross indexing


RECORDKEEPING REQUIREMENTS

RECORD RETENTION Record retention

Entitlements maintain records for four years following end of program year activity funded

States and UGLGs maintain records for three years following closeout

Consistent with Consolidated Plan requirements

Public access to records Citizens must have reasonable access

Citizens must be provided timely information

HUD, Comptroller General have access


MONITORING PURPOSE

Monitoring fosters: Production/accountability

Compliance with requirements

Responsiveness to community needs

Effective use of resources

Good organizational performance



MONITORING BASICS Everyone in the process gets monitored: HUD monitoring of grantee

Grantee monitoring of: Grantee’s own files Public agency partners Subrecipients For profit contractors and beneficiaries CBDOs

Monitoring includes: Desk reviews (reports, documentation)

On-site visits (review of files, staff interviews, etc.) HUD, Office of Block Grant Assistance Slide 184

HUD MONITORING OF GRANTEE PROGRAMS

HUD and in-house grantee monitors should have access to all records on CDBG programs and projects Files should be accessible and in order

If another entity is administering the project, grantee must have records to demonstrate compliance

HUD’s monitoring checklists are good way to prepare for visit Make sure all questions can be answered, documents can be

found for each area http://www.hud.gov/offices/cpd/library/monitoring/handbook.cfm#3


HUD MONITORING OF NSP2 GRANTEES

HUD has added specific monitoring checklists for the NSP1 and NSP2 Programs Go through the checklists. Make sure all questions can

be answered, documents can be found for each area

These checklists are referred to as Exhibits and can be found on HUDClips website:

http://www.hud.gov/offices/adm/hudclips/handbooks/cp dh/6509.2/index.cfm

NSP specific exhibits include 8-10 to 8-17


http://www.hud.gov/offices/adm/hudclips/handbooks/cp

http://www.hud.gov/offices/cpd/library/monitoring/handbook.cfm#3


MONITORING TASKS Typical steps in the process:

Develop an annual monitoring plan

Consider doing risk assessments

Conduct periodic desk reviews

Conduct on-site assessments:

Entrance meeting

Review of files/other documents

Exit meeting/interview

Review letter & follow-up actions


WHAT SHOULD BE MONITORED?

Program benefit, including eligible activities and

national objective

Environmental

Financial

Procurement

Labor

Relocation & acquisition

FHEO/504/section 3

Citizen participation/certifications

Program management

Program progress & reporting HUD, Office of Block Grant Assistance Slide 188

MORE INFORMATION ON CDBG

For more information on CDBG, go to: HUD Field Offices

http://www.hud.gov/local/

HUD CDBG website

http://www.hud.gov/offices/cpd/communitydevelopm ent/programs/index.cfm

CDBG laws and regulations

http://www.hud.gov/offices/cpd/communitydevelopm ent/programs/index.cfm


http://www.hud.gov/offices/cpd/communitydevelopm


http://www.hud.gov/local


MORE INFORMATION (cont.)

For more information on CDBG, go to: Guide to Eligible Activities and National Objectives for

Entitlements

http://www.hud.gov/offices/cpd/communitydevelopm ent/library/deskguid.cfm

Guide to Eligible Activities and National Objectives for States

http://www.hud.gov/offices/cpd/communitydevelopm ent/library/stateguide/


OTHEROTHER FEDERAFEDERAL REL REQQUUIREIREMMENENTSTS

BASICALLY CDBG

OTHER FEDERAL REQUIREMENTS

Wide range are triggered by expenditure of CDBG funds: Procurement

Environmental review

Uniform Relocation Act and 104(d)

Davis Bacon and Other Labor Standards

Lead Based Paint

Fair Housing and Equal Opportunity

OMB Circulars (covered in the financial module)





When a grantee elects to hire a contractor, whether to administer a program, complete a task or do construction, those contractors must be procured competitively.

Both grantees and subrecipients must follow federal procurement rules when purchasing services, supplies, materials, or equipment. State and local governments and Indian tribes – 24 CFR Part 85

Nonprofits, institutions of higher education and hospitals – OMB Circular A-110, as implemented through 24 CFR Part 84.


PROCUREMENT

PROCUREMENT (cont.) In addition to federal regulations, most states

and many local governments have laws and regulations regarding procurement. Each entity receiving CDBG funds (or NSP funds) should be aware of state and/or local laws that may affect procurement policies.

Keep in mind if federal regulations differ from state or local laws, grantees should always follow the stricter requirement.

In general, awards should always be made to the lowest responsive and responsible source.


PROCUREMENT (cont.)

Small purchase procedures allow recipients to acquire goods and services totaling no more than $100,000, without publishing a formal request for proposals or invitation for bids.

Under the small purchases method, grantees send a request for quotes to potential vendors with a detailed description of the goods or services needed. In return, they receive competitive written quotations from an adequate number of qualified sources.



For contracts and goods over $100,000 you must use one of the following procurement procedures:

Competitive proposals

The grantee must publish a written request for submissions and then review these submissions based on established selection criteria.

Two methods: RFP that includes qualifications and cost, OR an RFQ that focuses on expertise/experience and not cost (but still subject to a negotiation of fair and reasonable compensation).

PROCUREMENT (cont.)


PROCUREMENT (cont.)

Competitive sealed bidding Sealed bids require publicly solicited, sealed

bids and a firm-fixed-price lump sum or unit price contract.

It is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is lowest in price.


PROCUREMENT (cont.) Non-competitive procurement may be used only

when the award of a contract is infeasible under small purchase procedures, sealed bids, or competitive proposals and one of the following circumstances applies:

Where the item is available only from a single source;

Where a public emergency or urgent situation is such that the urgency will not permit a delay beyond the time needed to employ one or the other procurement methods; or

Where after solicitation of a number of sources, competition is determined inadequate.



PROCUREMENT (cont.)

For additional information on procurement please see:

24 CFR PART 85/84

Chapter 14 in your Notebook


EENNVIVIRORONMNMEENNTTAAL REQL REQUUIIRREMEMEENNTTSS

BASICALLY CDBG

ENVIRONMENTAL REVIEW

Environmental review of CDBG projects required before any funds obligated

Environmental review refers to process of looking at project for impact on environment and notifying the public of findings

Resources: 24 CFR Part 58 & various other laws



ENVIRONMENTAL REVIEW ENTITIES

Responsible Entity (RE)

Certifying Official

Environmental Officer


ENVIRONMENTAL REVIEW RECORD Written record of compliance with all applicable

environmental requirements

Legal challenges can be won or lost based on the completeness of the ERR

ERR should contain all documentation:

Project descriptions, maps, pictures, etc.

Forms & checklists

Most current HUD recommended formats are available from HUD Field Offices

Notices

Correspondence and relevant documents

Public comments HUD, Office of Block Grant Assistance Slide 203

LIMITS ON ACTIVITIES PRIOR TO CLEARANCE

No participant may commit or expend HUD funds prior to receiving state (or HUD) approval IF the activity would have an adverse environmental impact or limit the choice of reasonable alternatives “Participant” includes public or private nonprofit or

for-profit entities or their contractors

Activities that are exempt or categorically excluded not subject to §58.5 may proceed




Must ensure actions are not taken prior to receiving HUD approval

It is OK to make: A statement of conditional funding or

A non-legally binding agreement



For land acquisition projects, an option agreement (to purchase land) is allowable prior to HUD approval only when:

It is subject to a HUD determination of environmental desirability, and

It is of a nominal amount.


PROJECT AGGREGATION

Must group together & evaluate as a single project all individual activities which are related or are logical parts of a composite of contemplated actions

Functional Aggregation

Geographic Aggregation



CLASSIFYING THE ACTIVITY

Next, determine the classification of the activity Exempt

Categorically Excluded (“Subject To” or “Not Subject To”)

Requires Environmental Assessment

Requires Environmental Impact Statement

If more than one activity or classification, go with most stringent



EXEMPT ACTIVITIES

Activity is exempt when there is no effect on the environment Studies, plans and admin costs

Public service activities with no physical impact

What steps do you take? Document that the activity is exempt by completing

proper forms

Move forward with the activity


CATEGORICALLY EXCLUDED ACTIVITIES

Categorically Excluded means excluded from NEPA requirements

Some activities still subject to other Federal Requirements Such as Historical Preservation, Floodplain impact,

etc…


CATEGORICALLY EXCLUDED ‘NOT SUBJECT TO’ ACTIVITIES

“NOT subject to” activities include: Operating costs or supportive services

Direct assistance to homebuyers for existing housing or housing under construction

Predevelopment costs with no physical impact

Steps for activities NOT subject to 58.5: Make sure activities not in Runway Clear Zone or on

Coastal Barrier Island

Complete & submit proper forms

Proceed with the activity


CATEGORICALLY EXCLUDED ‘SUBJECT TO’ ACTIVITIES

Acquisition, improvement, or rehabilitation of public facilities other than buildings

Removal of material and architectural barriers Rehab & improvement of single family (1 to 4 unit)

dwellings Rehab & improvement of multifamily dwellings

provided the unit density isn’t increased more than 20%, does not change to non-residential use & the est. cost of rehab is less than 75% of replacement cost



An individual action on 1 to 4 dwelling units where there is a max of 4 units on any 1 site

An individual action on 5 or more housing units developed on scattered sites when sites are more than 2,000 feet apart & there are no more than 4 units on any 1 site

Acquisition (incl. leasing) or disposition of an existing structure provided its for the same use




Steps to take for those activities Subject To 58.5: Prepare project description & map

Prepare & submit Section 106 Review Form to SHPO

Send project info. to relevant entities and request written determinations

Begin to prepare the Statutory Worksheet



Determine if in or impact on floodplains or wetlands If yes, apply “Eight Step Process” and publish notices

Complete the Statutory Worksheet If determination is that project will NOT affect resources,

converts to exempt -- sign form and file If project will affect resources, show mitigation, publish

“Notice of Intent to Request Release of Funds” and submit required information to state

Place all documentation in ERR Proceed with activity only after receipt of

NOREC from state


ENVIRONMENTAL ASSESSMENTS

If project not Exempt or Categorically Excluded, an Assessment is required

Steps to follow: Complete the first part of the Format II, incl. project

description & map

Prepare & submit Section 106 Review Form

Send project info. to various agencies & request written determinations

Complete the Modified Format II



ENVIRONMENTAL ASSESSMENTS (cont.)

Steps (cont.) Determine whether project will or will not have

significant impact on environment

If no significant impact:

Publish “Combined Notice of FONSI/Notice of Request for Release of Funds”

Put documentation in ERR

Submit required information to state

Proceed with project only after receipt of NOREC received from the state


Publish notices in newspaper of general circulation or post in prominent public places NOTE: Floodplains/wetlands notices must be

published - no posting allowed

Send copies of notices to EPA, Corps, SHPO & other agencies & interested persons


TIMING OF ENVIRONMENTAL NOTICES


ENVIRONMENTAL NOTICES

Notice Method Timing

FONSI Published 15 days

FONSI Posted 18 days

NOI/RROF Published 7 days + 15 days for state

NOI/RROF Posted 10 days + 15 days for state

Combined FONSI & NOI/RROF Published 15 days for comment 15 days for objections

Floodplain Notice of Early Public Review

Published (required) 15 days

Floodplain Statement of Findings & Public Explanation

Published (required) 7 days


LABLABOORR SSTTANDAANDARDSRDS

BASICALLY CDBG

LABOR STANDARDS – DAVIS-BACON Davis-Bacon applies to all construction

contracts over $2,000 involving CDBG funds Davis-Bacon is also triggered when an NSP-assisted

property contains 8 or more units. A property isdefined as 1 or more buildings on an undivided lot or on contiguous lots or parcels, which are commonly-owned and operated as 1 rental, cooperative or condominium project.

Requires workers be paid at least minimum wages provided by Dept of Labor

Acquisition, Demolition, and soft costs do not trigger Davis-Bacon


DAVIS-BACON IMPLEMENTATION

All bids & contracts subject to Davis-Bacon must contain standard clauses on requirements

Hold a preconstruction conference to review requirements with contractor

Prime or general contractor is responsible for full compliance, including lower tier subs

Contract administrator enforces requirements and provides information to contractor



DAVIS-BACON WAGE DECISIONS

Decisions are needed to determine prevailing wages by worker classification

Recipients get wage decisions through state or online Types: Building, Residential, Highway, Heavy

Prime contractors must post wage decision

All contractors need to use the right type of classificationfor each job or request additional classifications

HUD guide provides definitions of key terms such as:

Employee, apprentice, prevailing wage, trade


WEEKLY PAYROLLS Prime contractors and subcontractors must submit

certified weekly payrolls in timely fashion Content of the payroll form: Project information Employee information

Work classification Hours Rate of pay Wages Deductions Net pay Statement of compliance


PAYROLL REVIEW

Recipient will conduct on-site review of employment on the project (HUD 11) Contractor must make employees available for interviews

Prime contractor and recipient should review all payrolls Compare to wage decision & interviews

Make sure calculations OK and deductions are documented

Contractors must keep copies of payroll records



RESTITUTION

If underpayments, contractor will make restitution

Steps include: Recipient notifies the prime contractor

Computation of restitution & payment to worker

Contractor submits correct payroll

Recipient review of corrected payroll

If workers not found, will escrow restitution and recipient will look for 3 years After 3 years, amount is credited to HUD



OTHER LABOR LAWS

Contract Work Hours & Safety Standards Act Workers shall not work more than 40 hours/week unless they get

overtime & projects must comply with safety standards

Copeland Anti-Kickback Act Requires payment once a week & only permissible payroll

deductions

Fair Labor Standards Act Federal minimum wage & overtime requirements


The above apartment building contains more than 8 units and any rehab above $2k would trigger Davis Bacon

DAVIS-BACON (cont.)


DAVIS-BACON (cont.)

In the same building, if windows were being installed in only three units for under $2,000 then Davis Bacon would not triggered.



This four unit apartment would not trigger Davis Bacon

DAVIS-BACON (cont.)


In most cases, single family homes will not trigger Davis Bacon because they are single residential structures, the exception is explained in the following slides.

DAVIS-BACON (cont.)

DAVIS-BACON (cont.)


Davis Bacon would not apply to the house, highlighted to the left above, because it’s a single residential structure that is owner occupied, as is the house next to it.


However, Davis Bacon would apply if all 8 single-family properties, highlighted in red, were owned and operated by the same person. Even though they are separate residential structures, if they are commonly owned and operated they would trigger Davis-Bacon.



DAVIS-BACON (cont.)

The above example shows contiguous residential townhouse structures, but these are individually owned properties, so they would not trigger Davis-Bacon.


LEADLEAD--BASEDBASED PAPAIINNTT

BASICALLY CDBG

LEAD BASED PAINT REQUIREMENTS

Lead rules generally apply to properties built prior to 1978 Certain types of rehab work exempt

Properties tested & found not to have lead

Properties where lead has been removed

Rehab won’t disturb paint surfaces

Lead evaluation and treatment depends on level of assistance which is the lower of: Per unit rehabilitation hard costs (all funds) OR

Per unit federal assistance


LEAD PAINT REQUIREMENTS (cont.)

Evaluation activity depends on level of assistance: Less than $5,000 = Paint testing

$5,000 to $25,000 = Risk assessment

More than $25,000 = Risk assessment

Notification: Notice of Lead Hazard Evaluation to homeowner within 15 days

of inspection

Alternatively, can presume presence of lead & provide “Notice of Presumption”




How to address lead depends upon amount of assistance: <$5k = repair surfaces to be disturbed using safe

work practices

$5k - $25k = interim controls using safe work practices & trained workers

>$25k = abatement using safe work practices & certified supervisor & workers



Clearance must also be performed Do NOT pay final payment to contractor before unit

has passed clearance

Provide Notice of Lead Hazard Reduction to property owner within 15 days of clearance test


LEAD-BASED PAINT (NEW RULE)

On April 22, 2008 EPA issued a new rule

Beginning in April 2010, contractors performing renovation, repair and painting (RRP) projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.

There are some differences between the EPA RRP Rule and the HUD Lead Safe Housing Rule (LSHR). A major difference is that the LSHR requires clearance examinations. All housing receiving federal assistance must still comply with the LSHR.



RREELOLOCACATITIOONN AANND TD TEENNAANTNT PRPROTEOTECCTIONSTIONS

BASICALLY CDBG

Uniform Act

When real property is acquired or persons displaced as a direct result of acquisition, demolition, and rehabilitation for a Federally funded project

Applies to government agencies, private organizations and others

Note: URA may be triggered if federal assistance is in any phase of project

URA requirements apply to:

Virtually all Federal programs, including CDBG/Section108 loan guarantees

Grants, loans, other contributions


WHEN IS THE URA TRIGGERED?

RELOCATION BASICS: WHO IS A DISPLACED PERSON?

Family

Individual

Business, Farm, or Nonprofit

Who Moves:

Permanently as a direct result of a Federally-assisted project



RELOCATION BASICS: RESIDENTIAL

Residential displaced persons are eligible to receive: Advisory services & notices

Minimum 90 Day notice to vacate (based on availability of comparable replacement dwelling)

Replacement housing payments

Possibly housing of last resort

Moving expense payments


RELOCATION BASICS: NONRESIDENTIAL

Nonresidential displaced persons are eligible to receive: Advisory services & notices

Minimum 90 Day notice to vacate

Reestablishment expense payments (for small businesses) and moving expense payments OR

Fixed payment


RELOCATION BASICS: TEMPORARY RELOCATION

Families who do not need to move permanently are entitled to: Advisory services, including notices

Temporary relocation assistance (if applicable). Not to exceed 1 year

Remain in DSS, suitable, affordable unit

If no rent increase, unit is deemed affordable



URA AND ACQUISITION

Applies to wide range of types of purchases: Fee simple title

Permanent easements

Temporary easements necessary for the project

Life estate

Long term lease (50 years or more)


PURCHASERS

URA covers purchases by: Grantee

Nonprofits with federal assistance

For profits with federal assistance

Agent or consultant acting on grantee behalf

Homebuyers with federal downpayment assistance


VOLUNTARY ACQUISITIONS

Three possible: Grantee has eminent domain powers but won’t use

Grantee doesn’t have eminent domain powers

Purchases from government agency where buyer does not have eminent domain powers over that agency



GRANTEE WILL NOT USE EMINENT DOMAIN

Grantee must not intend to use its eminent domain powers if sale cannot be negotiated

Property cannot be: Specifically required

Part of a planned or designated area in which all or substantially all property in area will be purchased

Private developer acting as agent of grantee is treated as grantee


GRANTEE WILL NOT USE EMINENT DOMAIN (cont.) Must notify the seller: Grantee will not use the power of

eminent domain

Seller not eligible to receive relocation assistance

Estimate of fair market value

Appraisal not required, but determination made by someone with knowledge of real estate market


DONATIONS

Owners may voluntarily donate but… Must be fully informed of rights

Must acknowledge his or her decision to voluntarily relinquish payments due under URA

Get it in writing!

Keep in project file!



INVOLUNTARY ACQUISITION

Grantees must: Provide notices to the owner Need proof of delivery

Provide URA notices and assistance to occupants Offer market value for the property Complete the purchase expeditiously

New rule: with fy06 funds, eminent domain cannot beused for any acquisition not benefiting the public Generally applies to economic development and

related activities Check before proceeding on eminent domain if not for

housing or infrastructure related to public use


General process: 1. Notify owner of the agency’s interest in acquiring

the property and their protections under the URA 2. Appraise the property and invite the owner to

accompany the appraiser or prepare waiver valuation

3. Review the appraisal 4. Establish just compensation for the property 5. Provide owner with written offer and summary

statement for property to be acquired


PROCESS FOR INVOLUNTARY ACQUISITION

PROCESS FOR INVOLUNTARY ACQUISITION

General process (cont.) 6. Negotiate with owner for the purchase of

property If negotiations are successful, complete the sale

If negotiations are unsuccessful, consider an administrative settlement to complete the sale

If negotiations are still unsuccessful, the agencyshould acquire the property through use of eminent domain



SECTION 104(d)

Some projects also subject to 104(d)

Triggered only when CDBG or HOME funds are used for the project and there is: Demolition or conversion of units

104(d) addresses: People: Relocation assistance is provided for LOW-

INCOME residents

Units: One-for-one replacement is required when the stock of low/moderate housing is decreased


Statute includes noticing requirements for “bona fide” tenants in occupancy when unit acquired by initial successor in interest through foreclosure (usually lender)

“Bona fide” tenant:

Not former mortgagor

Lease is arms length transaction

Lease requires rent that is not substantially less than fair market rent for property

Effective for acquisitions by successor in interest (lender) after 2/17/09 ( & note PTFA 5/20/09)


TENANT PROTECTIONS

TENANT PROTECTIONS (cont.)

Lender must provide 90 day notice to vacate to “bona fide” tenant occupants

NSP funds cannot be used in any property unless lender followed notice rule, OR

Grantee assumes NSP tenant protection obligations

May trigger relocation assistance to displaced persons under URA



TENANT PROTECTIONS (cont.)

Grantee must document lender compliance

If tenant in property, must have 90 day notice

If not occupied, lender must certify either that property was not occupied by “bona fide” tenant at time of foreclosure or that tenant received 90 day notice

If tenant has Section 8 assistance, lender must agree to continue lease & HAP contract

Protecting Tenants At Foreclosure Act


FAFAIRIR HHOOUUSSIINNG, ACG, ACCESSIBCESSIBIILITYLITY, AND, AND EQEQUAUAL EML EMPPLLOOYYMMEENNTT

BASICALLY CDBG

FAIR HOUSING LAWS Use of CDBG requires compliance with certain

Fair Housing and accessibility laws

Key Fair Housing laws: Title VIII of Civil Rights Act of 1968 – The Fair Housing Act

Title VI of the Civil Rights Act of 1964

Executive Orders 11063 and 12259

Age Discrimination Act

Section 109 of HCDA

Applicable state laws

No discrimination in housing on basis of race, ethnicity, color, religion, sex, national origin, familial status or disability



COMPLIANCE WITH FAIR HOUSING LAWS

Recipient must not discriminate and must affirmatively further Fair Housing in the community Conduct affirmative marketing

Rules apply to locality as a whole, not just with CDBG $: Maximize housing choice

Lessen racial, ethnic, and economic concentrations of housing

Facilitate desegregation and racially inclusive patterns of occupancy/public facilities


COMPLIANCE WITH FAIR HOUSING LAWS (cont.)

Analysis of impediments to fair housing

No official regulations – guidebook

See Con Plan guidance

Analyze current situation and describe actions

Certify to compliance but not required to submit documentation


ACCESSIBILITY – GENERAL

Adhere to laws and regulations: Architectural Barriers Act

Americans with Disabilities Act

Section 504

Fair Housing Act



SECTION 504

Section 504 makes it unlawful to discriminate based on disability in HUD-funded housing programs

Covered disabilities include: mobility, visual, hearing, cognitive


SECTION 504 (cont.)

Recipient must take steps to ensure accessibility of communication

Prohibitions against employment discrimination — make reasonable accommodations

Ensure program accessibility: Housing

Non housing


APPLICATION OF 504 TO HOUSING

New construction and substantial rehab of MF rental w/15+ units Substantial rehab: rehab costs = more than 75%

replacement cost

5% of units accessible for persons with mobility impairments

Additional 2% of units accessible for persons with hearing/vision impairments



SECTION 504 AND FACILITIES

Facility can be: Approached

Entered

Used by persons with physical handicaps

Several options for improving program access


SPECIAL 504 REQUIREMENTS FOR RECIPIENTS WITH 15+ EMPLOYEES

If 15 or more full or part-time employees: Designation of responsible employee and adoption

of grievance procedures

Notification to participants, beneficiaries, and employees of nondiscrimination policy


EQUAL OPPORTUNITY

Various Federal laws & authorities Title VI of Civil Rights Act of 1964

Title VIII of Civil Rights Act of 1968, as amended

Section 109 of HUD Act of 1974

Section 3 of HUD Act of 1968 (amended 1992)

Age Discrimination Act of 1975

Section 504 of the Rehab Act of 1973

E.O. 11063 & 11246



COMPLIANCE WITH EQUAL OPPORTUNITY LAWS

Provide equal opportunity in: Provision of services, facilities & improvements

(program benefit)

CDBG-related employment

Procurement & contracts

Keep records on beneficiaries to document compliance


SECTION 3

Section 3 of the Housing and Urban Development Act of 1968 recognizes that the normal expenditure of certain HUD funds typically results in new jobs, contracts, and other economic opportunities

When these opportunities are created, low�and very low�income persons residing in the community in which the funds are spent (regardless of race and gender), and the businesses that substantially employ them, shall receive priority consideration.


SECTION 3 (cont.)

Develop a Section 3 Action Plan

Make good faith efforts to meet this plan

Outreach

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SECTION 3 for NSP2

Section 3 for NSP A grantee’s combined investment in excess of

$200,000 of NSP funding into projects arising in connection with housing construction, demolition, rehab, or other public construction makes the requirements of Section 3 applicable to all individual properties that receive services with these funds – regardless of the actual amount that is spent on each individual unit/property.


ANY QUESTIONS?ANY QUESTIONS?

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