The Office of Disaster Recovery (ODR) publishes frequently asked questions (FAQs) to assist current and future CDBG-DR grantees (including CDBG-MIT and CDBG-NDR), the public, and other stakeholders with the planning and use of the funds. This resource covers a range of topics to provide additional clarity, guidance, and support to grantees.
Please Note: This collection of FAQs will be adapted and expanded over time, so certain topics listed below may not have FAQs currently populated within the collection.
- HUD's most recent Federal Register notices include the following statement: "The grantee (or procuring entity) may contract for administrative support but may not delegate or contract to any other party any inherently governmental responsibilities related to management of the grant, such as oversight, policy development, monitoring, internal auditing, and financial management."
Does this prohibit me from procuring for a contractor to help my staff with monitoring or auditing?No, this does not prohibit you from procuring contractors to work on these items. However, the grantee must maintain oversight responsibilities and is ultimately responsible to ensure these tasks are carried out compliantly. For example, a grantee may begin to develop a plan to monitor its subrecipients and realize that it doesn't have the staff to carry out all the required functions. Grantees could follow the appropriate procurement requirements to bring in contractors to help with discrete monitoring tasks, but ensure that it maintains oversight. Language to that extent should be included in any vendor contract.
Source: ODR Digest Vol. 01 - Can a grantee use administrative funds from a previous CDBG-DR grant for one disaster to pay for the development of its action plan for another CDBG-DR grant for another disaster or for a CDBG-MIT grant?
While this would normally not be allowable, Congress passed Public Law 116-20 and included a provision to allow grantees with funds under Public Laws 114–113, 114–223, 114–254, 115–31, 115–56, 115–123, and 115– 254, or any future acts, to use administrative funds across multiple grants. This means that if a grant is funded under one of the Public Laws in the list above grantees can now use administrative funds from one of those grants to pay for the development of an action plan for another grant, assuming it is also funded by one of those Public Laws listed above or a future act. Grantees should ensure that they are following the rules provided under their applicable Federal Register notice that add additional considerations for grantees to follow including:
1. Confirm that it has appropriate financial controls to ensure that the amount of grant administration expenditures for each of the aforementioned grants will not exceed 5 percent of the total grant award for each grant (plus 5 percent of program income).
2. Review and modify its financial management policies and procedures regarding the tracking and accounting of administration costs, as necessary, and address the adoption of this treatment of administrative costs in the applicable portions of its Financial Management and Grant Compliance submissions by submitting Addendum B to HUD.
3. Grantees are also reminded that all costs incurred for administration must still qualify as an eligible administration expense (HUD confirms that action plan development costs do qualify as eligible administrative costs).
Source: ODR Digest Vol. 01 - When identifying total assistance received by or available to each CDBG-DR beneficiary, should the grantee only consider disaster assistance provided to the beneficiary for the same disaster the CDBG-DR assistance is being awarded for?
No. When multiple disasters occur in the same location, and the CDBG-DR beneficiary has not recovered from the first disaster at the time of a second disaster, the assistance provided in response to the second disaster may duplicate assistance for the same purpose and need as assistance provided after the first disaster.
The total assistance to be considered in a Duplication of Benefits (DOB) analysis is to be calculated based on the “recovery purpose” for the eligible CDBG-DR activity and not based on the disaster for which funds were awarded. A duplication occurs when a person, household, business, or other entity receives disaster assistance from multiple sources for the same recovery purpose, and the total assistance received for that purpose is more than the total need. This is because Federal assistance serves only to “supplement insurance and other forms of disaster assistance."
When two disasters occur in the same area, and the applicant has not fully recovered from the first disaster before the second disaster occurs, CDBG-DR applicants can provide documentation to the grantee to illustrate how the disaster assistance for the first disaster was used for eligible purposes.
However, applicants are not required to maintain documentation related to the use of the disaster assistance beyond the period required by the agency that provided the assistance. If documentation cannot be provided and the applicant has passed the time period required to maintain the documentation, the grantee may accept a self-certification regarding how the applicant used the other agency’s assistance. The June 20, 2019 Federal Register Notice outlines the requirements for duplication of benefits at 84 FR 28836.
Source: ODR Digest Vol. 02 - For 2017, 2018, and 2019 disasters, does the waiver of 42 U.S.C. 5305(a)(24)(A) and (D) “to the extent necessary” permit all homeownership assistance activities under 42 U.S.C. 5305(a)(24)(A) through (E)?
Yes. HUD's waiver of 42 U.S.C. 5305(a)(24)(A) is replaced with an alternative requirement “to the extent necessary” to allow for “homeownership assistance for households earning up to 120 percent of the area median income.” Under this waiver and alternative requirement, grantees may provide homeownership assistance to households earning up to 120 percent of area median income in any of the forms identified in 42 U.S.C. 5305(a)(24)(A) through (E). The waiver of 42 U.S.C. 5305(a)(24)(D) eliminates the statutory limitation on providing only up to 50 percent of down payment assistance, so that together with the alternative requirement, grantees can provide up to 100 percent of down payment assistance for households earning up to 120 percent of the area median income.
Source: ODR Digest Vol. 02 - OMB recently amended parts of 2 CFR, including 2 CFR part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. What rules apply to my CDBG-DR or CDBG MIT grant?
The 2 CFR amendments apply to CDBG-DR and CDBG-MIT grants prospectively from their effective dates. On August 13, 2020, the Office of Management and Budget (OMB) published final guidance in the Federal Register, at 85 FR 49506, revising 2 CFR parts 25, 170, and 200. OMB also added a new 2 CFR part 183 to implement Never Contract with the Enemy requirements. OMB published a correcting amendment on February 22, 2021, to correct citations, references, and general oversights (the February 2021 amendments do not substantively change the 2020 amendments to 2 CFR).
For CDBG-DR and CDBG-MIT grants, which are subject to regulations as may be amended from time to time, the 2020 and 2021 amendments to 2 CFR apply beginning on their effective dates. For grants made before the effective dates, the revised rules apply prospectively beginning on their effective date. All of the Part 200 amendments apply as of their effective date. The majority of the amendments are effective as of November 12, 2020, except for the amendments to 2 CFR part §§200.216 and 200.340, which were effective on August 13, 2020, and the correcting amendments which were effective on February 22, 2021.
For subawards, the effective date of the 2020 and 2021 amendments to 2 CFR is the same date the amendments were effective for the Federal award from which the subaward is made. The same 2 CFR part 200 requirements apply to the Federal award and its subawards because the requirements for a subaward flow from the requirements of the original Federal award from the Federal awarding agency.
Grants are only subject to those 2 CFR regulations made applicable by program regulations, waivers, and alternative requirements. HUD will make conforming rule changes to its program regulations in title 24 to implement the amendments to 2 CFR part 200. Most changes will be technical in nature to reflect changes to citations. Until HUD’s regulations are amended, title 24 regulations continue to apply where there is no conflict between prior and now-changed 2 CFR requirements. Where the recent amendments to 2 CFR part 200 replace or renumber sections of part 200 that are cited specifically in 24 CFR part 570, activities carried out under the grant after the effective date of the part 200 amendments will be governed by the part 200 requirements as replaced or renumbered by the part 200 amendments.
An unofficial document showing redlined changes to 2 CFR that was published August 13, 2020, is available from OMB: 2020 2 CFR Revisions Finalization (Redlined) (grantees may use the unofficial redline as a resource, but should adhere to the requirements in the electronic CFR, which contains additional revisions published February 2021).
Grantees may wish to review OMB's frequently asked questions that contain additional information about the recent 2 CFR amendments:
- Sec. 889 of the 2019 NDAA (2 CFR 200.216) Frequently Asked Questions
- 2 CFR Frequently Asked Questions
Source: ODR Digest Vol. 03 - Does CDBG-DR have a requirement that an applicant of CDBG-DR funds must prove ownership of a property to be assisted? Further, what kind of documentation should grantees require to show ownership?
CDBG-DR does not have a requirement of "proof of ownership" when grantees are carrying out recovery programs. Any decisions about requiring applicants to submit proof of ownership is up to the grantee and its chosen program design, however HUD would recommend grantees obtain documentation to protect the CDBG-DR investment.
If a grantee chooses to follow HUD’s recommendation and require proof of ownership, there are several ways ownership can be documented that does not involve a deed or title. Grantees are encouraged to identify multiple methods that allow households to provide proof of ownership. For example, grantees could choose to accept self-certification, tax receipts, home insurance, or utility bills. Grantees should consider and determine their documentation requirements in the early stages of CDBG-DR activity planning and program design.
Additionally, when a Grantee's recovery activity requires real estate properties to be acquired, the Grantee must follow the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) regulations at 49 CFR Part 24 Sub-part B (See 24 CFR 570.606(e)).
Source: ODR Digest Vol. 03 - Can CDBG-DR funds be used to finance new housing construction activities by providing assistance to private individuals and entities, including profit making and nonprofit organizations?
Yes. Since CDBG-DR notices generally waive the ineligibility of new housing construction activities, grantees may carry out new construction of housing activities through employees, contractors, or subrecipients in accordance with 24 CFR 570.200(f). Carrying out activities may include providing direct assistance for new construction of housing that meets requirements of Federal Register notices. HUD provides the following guidance to grantees carrying out activities for new construction of housing: grantees may apply the provisions of 24 CFR 570.202 to new construction of housing in the same way that they apply them to housing rehabilitation activities. Therefore, CDBG-DR funds may be used to finance new construction of housing activities through the use of grants, loans, loan guarantees, interest supplements, or by other means, and consistent with 570.202(b)(1), grantees may provide assistance to private individuals and entities to acquire property for new construction of housing and to construct improvements that may be used or sold for residential purposes. All activities for the new construction of housing must meet a national objective.
HUD also advises that the use of funds for new construction must be compliant with applicable federal requirements, including all construction standards and other alternative requirements in Federal Register notices that apply to the grant, and relocation and federal accessibility requirements (see section 109 of the Housing and Community Development Act of 1974, 24 CFR 570.602, 24 CFR 570.606, 24 CFR 570.487, 24 CFR 570.614).
Source: ODR Digest Vol. 04 - When a presidential major disaster declaration is declared and funds are allocated for the declared disaster, all CDBG-DR funds allocated for the disaster have to be spent in the “most impacted and distressed” (MID) areas.
If the MID areas in the Federal Register notice only identify specific counties in the presidentially declared area, can a State use its CDBG-DR funds in any county or area that received a disaster declaration if 80 percent of its expenditures are in the HUD-identified MID areas?Yes, a grantee can choose to use CDBG-DR funds in any county in the presidentially declared area, but this area must be defined by the grantee as MID. HUD splits this requirement up into HUD-identified MID areas (80% of funding) and grantee-identified MID areas (20% of funding). A grantee may determine where to use the 20% of its allocation, but that portion may only be used to address unmet disaster needs in those areas that the grantee determines are ‘‘most impacted and distressed’’ and received a presidential major disaster declaration pursuant to the disaster numbers listed in the Federal Register notice. If the grantee believes that additional areas should be included in the HUD-identified MID areas, the grantee may submit that request to HUD using data-driven analysis that illustrates the basis for designating the additional area as "most impacted and distressed" as a result of the qualifying disaster.
Source: ODR Digest Vol. 04 - If an audit is required by 2 CFR part 200 (grantee meets $750,000 Federal award expenditure threshold), must the grantee procure its auditor in accordance with procurement requirements in 2 CFR part 200?
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200 set forth audit requirements for CDBG-DR grantees. The regulation at 2 CFR 200.501 requires that a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. When an audit is required by 2 CFR 200.501, 2 CFR 200.508(a) requires the non-Federal entity to "procure or otherwise arrange" for the audit in accordance with 2 CFR 200.509. Generally, the auditor must be procured in accordance with requirements of 2 CFR 200.317 through 200.327. However, if the non-Federal entity is not authorized to procure audit services (e.g., State law may require that a State auditor perform all required audits for that State), it may otherwise arrange for audit services, consistent with its legal authorities.
2 CFR 200.509(a) provides: "Auditor procurement. In procuring audit services, the auditee must follow the procurement standards prescribed by the Procurement Standards in §§ 200.317 through 200.327 of subpart D of this part or the FAR (48 CFR part 42), as applicable. In requesting proposals for audit services, the objectives and scope of the audit must be made clear and the non-Federal entity must request a copy of the audit organization's peer review report which the auditor is required to provide under GAGAS. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of peer and external quality control reviews, and price. Whenever possible, the auditee must make positive efforts to utilize small businesses, minority-owned firms, and women's business enterprises, in procuring audit services as stated in § 200.321, or the FAR (48 CFR part 42), as applicable."
2 CFR 200.509(a) incorporates and augments the applicable procurement requirements in 2 CFR §§ 200.317 through 200.327. To comply, when a State CDBG-DR grantee procures an auditor to conduct an audit required by 2 CFR 200.501:
- The State CDBG-DR grantee must follow the procurement requirements in 2 CFR §§ 200.317, 200.321, 200.322, and 200.323 and ensure that its contract includes any clauses required by § 200.327; and The State must adhere to the following as required by 2 CFR 200.509(a):
+ In requesting proposals for audit services, the objectives and scope of the audit must be made clear and the State CDBG-DR grantee must request a copy of the audit organization's peer review report which the auditor is required to provide under GAGAS; and
+ In evaluating each proposal for audit services, the State CDBG-DR grantee must consider the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of peer and external quality control reviews, and price.
Additionally, when the cost of the audit will be charged to the CDBG-DR grant, the State must comply with requirements in 24 CFR 570.489(g) and applicable CDBG-DR Federal Register notices that do not conflict with requirements in 2 CFR 200.508 and 200.509(a). In the event of a conflict between 24 CFR 570.489(g) and 2 CFR part 200 subpart F, the State must follow the requirements of 2 CFR part 200 subpart F when procuring an auditor to conduct an audit required by 2 CFR 200.501. Regarding procurements of auditors, a state shall:
- Make subrecipient and contractor determinations in accordance with the standards in 2 CFR 200.330;
- Have policies and procedures that include standards of conduct governing employees engaged in the award or administration of contracts;
- Prohibit the cost plus a percentage of cost method of contracting unless required for audits by State law;
- Require subgrantees to comply with 2 CFR 200.508 and 570.509 in the selection of auditors when an audit of the subgrantee is required by 2 CFR 200.501; and
- Conduct an evaluation of the cost or price of the product or service if required by applicable CDBG-DR Federal Register notices.
Source: ODR Digest Vol. 05 - Does the waiver and alternative requirement described in section IV.E.2.b of the Consolidated Notice prevent CDBGDR grantees from providing CDBG-DR assistance to households above 120 percent AMI for non-flood related disasters?
No. The intention of this alternative requirement is to promote the availability of recovery resources for lower income homeowners who receive flood disaster assistance and live in a floodplain, but who are unlikely to be able to afford flood insurance. This requirement only applies when:
- The household receives flood disaster assistance,
- The combined household income is greater than either 120% AMI or the national median,
- The property was in a floodplain at the time of the disaster, and
- The property owner did not obtain flood insurance, even if they were not required to.
Source: ODR Digest Vol. 06 - Can a CDBG-DR grantee purchase motor vehicles? Can the purchase of motor vehicles be a Program Administration Cost (PAC) or an Activity Delivery Cost (ADC)?
In some cases, motor vehicles are an allowed expense. Motor vehicles are classified as "general purpose equipment" under 2 CFR 200.1 and are subject to the CDBG regulations pertaining to "equipment." While the purchase of equipment is typically ineligible, the exception at 24 CFR 570.207(b)(1)(iii) allows the purchase of equipment when it is "necessary for use by a recipient or subrecipient in the administration of activities assisted with CDBG funds...." Therefore, the purchase of a motor vehicle can be an eligible PAC or ADC if the vehicle is necessary to carry out an eligible CDBG-DR activity or meets another exception criterion. State grantees may use the entitlement regulations and this FAQ as interpretive guidance.
Source: ODR Digest Vol. 06 - I am a grantee who received funds under Public Law 113-2. Based on the Law that Congress passed, does that mean those funds no longer have an expenditure deadline?
The Disaster Relief Appropriations Act, 2013 (Public Law (P.L.) 113-2), which made $15.2 billion in CDBG-DR funds available for necessary expenses related to disaster relief and long-term recovery, instituted an expenditure deadline for all grants funds awarded under P.L. 113-2. In response to the COVID-19 National Emergency, Congress extended the expenditure deadline for P.L. 113-2 grants twice.
On December 29, 2022, Section 420 of the Transportation Housing and Urban Development, and Related Agencies Appropriations Act, 2023 (P.L. 117-328) removed the expenditure deadline for PL 113-2 grants. In accordance with 2 CFR 200, Federal Agencies are now required to impose a period of performance for all federally awarded grants. Therefore, HUD intends to impose a period of performance for all P.L. 113-2 grants in an upcoming Federal Register notice.
Source: ODR Digest Vol. 07 - Now that the Office of Disaster Recovery (ODR) has been established, does that mean that there will be an annual appropriation for CDBG-DR funds?
No. CDBG-DR is funding provided as a special appropriation by Congress to states, territories, counties, and municipalities to assist with long term recovery following a Presidentially-declared disaster. Congress would need to vote to authorize the creation of a CDBG-DR program and provide an annual budget allocation.
Source: ODR Digest Vol. 07 - If I am a grantee providing financial assistance to businesses to create and retain jobs using the LMI jobs national objective, does each business assisted have to meet a national objective?
Yes. Each business must meet the national objective, with the exclusion of certain exceptions listed at 24 CFR 570.483(b)(4)(vi)(A) – (F).
"As a general rule, each assisted business shall be considered to be a separate activity for purposes of determining whether the activity qualifies under this paragraph..."
Source: ODR Digest, Volume 8 - To what extent can a grantee make changes to a substantial amendment in the period between the public comment period and submission to HUD before a new public comment period may be required?
It depends. If a grantee changes the action plan in response to feedback (e.g., the public and affected stakeholders) or to address a deficiency identified by HUD, the grantee is not required to resubmit the revisions as a new amendment.
Instead, the grantee must provide a summary of comments on the amendment, including the changes made in response to the public comments received. For other changes (e.g., information was missing or misrepresented in the amendment; the proposal of a new program or project; the reallocation of funds, etc.), the grantee must submit the revisions as a new amendment and follow the requirements identified in the applicable Federal Register notice.
Source: ODR Digest, Volume 8 - In what specific circumstances can a grantee use their CDBG-DR funds for a subsequent disaster?
Grantees may use their CDBG-DR grant funds for a subsequent disaster (regardless of the severity of the disaster) in cases when needs from the qualifying disaster, for which the grantee received the CDBG-DR grant, remain unaddressed and are exacerbated by the subsequent disaster.
If the grantee has identified a need originating from the disaster for which HUD awarded the funds (a qualifying disaster) that has not been met at the time of a subsequent disaster, and the subsequent disaster exacerbates the need that arose from the qualifying disaster, the grantee can use its CDBG-DR funds to continue to address the exacerbated unmet need from the qualifying disaster.
Source: FAQ: Using CDBG-DR Funds for Subsequent Disasters - How would a grantee determine that the use of CDBG-DR funds awarded for a qualifying disaster can be used to address unmet needs from a subsequent disaster?
Disaster recovery needs are calculated at points in time. A subsequent change in circumstances can affect need. HUD has long recognized that, after needs are initially calculated and/or a CDBG-DR award has been made, an applicant for CDBG-DR may have unmet needs that are worsened. Whether the exacerbated unmet needs are demonstrated by subsequent disaster damage to a home or business that was only partially repaired or a similar change in circumstances (e.g., vandalism, contractor fraud, an increase in the cost of materials and/or labor, or a change in local zoning law or building code), the grantee may subsequently reevaluate the calculation of the award by taking into account the increased need.
This means that grantees may use CDBG-DR funds awarded for a qualifying disaster to complete the construction of a project that was in progress and damaged by a subsequent disaster if the project was not yet completed and the beneficiary has remaining unmet needs. Grantees must maintain records that document how their funded activity addresses an impact from the qualified disaster and grantees should also document their determination that the beneficiary's unmet needs have changed and why.
Source: FAQ: Using CDBG-DR Funds for Subsequent Disasters - Does the Build America, Buy America (BABA) domestic content procurement preference apply to Community Development Block Grant Disaster Recovery (CDBGDR), Mitigation (CDBG-MIT), or National Disaster Resilience Competition (CDBG-NDR) grants?
No, the preference does not apply to CDBG-DR, CDBG-NDR, or CDBG-MIT grants. Congress passed the Build America, Buy America Act (BABA) as part of the Infrastructure Investment and Jobs Act (Pub. L. No. 117-58, §§ 70901-52, Nov. 15, 2021, 41 U.S.C. § 8301 note). The Act establishes a domestic content procurement preference for certain Federal programs that provide Federal Financial Assistance for infrastructure, but specifically excludes ‘‘pre and post disaster or emergency response expenditures’’ from those funds covered by the preference. Because all CDBG-DR, CDBG-MIT and CDBGNDR grants are made in anticipation of or response to an event or events that qualify as an ‘emergency’ or ‘major disaster’ within the meaning” of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. §§ 5121 et seq.) (Stafford Act) and therefore constitute ‘‘pre and post disaster or emergency response expenditures.’’
Note: HUD has made additional information concerning its implementation of the BABA domestic content procurement preference available on its website, including general applicability, public interest waivers of the domestic content procurement preference, on its website.
Source: FAQ: Build America, Buy America - Can a CDBG-DR grantee transfer program income generated from a DR-funded recovery activity to their CDBG entitlement program?
Typically yes. Grantees should refer to the requirements established in the applicable Federal Register notice. For example, per Section III.E.1.d of the Consolidated Notice, which governs 2020-2023 CDBG-DR grantees, a state or local government grantee may transfer program income (PI) to its annual CDBG program before closeout of the grant that generated the PI. Once transferred, that PI will no longer be subject to the waivers and alternative requirements of the Consolidated Notice and would instead be governed by the CDBG entitlement program regulations, 24 CFR 570.504.
For other CDBG-DR and CDBG-MIT grantees that received allocations prior to 2020, grantees should refer to the Federal Register notice to determine grant-specific requirements to transfer PI.
Source: ODR Digest, Volume 9 - Are CDBG-DR grantees required to recertify a homeowner's income more than once if it takes longer than 12 months to complete a rehabilitation?
Per 24 CFR 570.3, income is typically an estimate of an individual’s income for the next 12 months. LMI determinations are assessed at the time the grantee enters into an agreement with a homeowner, which occurs after the grantee processes an application. If a homeowner is deemed LMI, but the project takes more than 12 months to assign a contractor and complete the rehabilitation, it wouldn’t prevent the continuation of the activity. However, grantees are encouraged to request a self-certification from the owner to confirm that their income did not change since the initial income assessment was performed.
Source: ODR Digest, Volume 9 - CDBG-DR and CDBG-MIT contain numerous waivers and alternative requirements already. In addition, grantees are able to request additional waivers and alternative requirements to better expedite and address the needs of the impacted communities. Can a grantee obtain an environmental review waiver?
The Appropriations Act authorizes the Secretary to waive or specify alternative requirements for any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary, or use by the recipient, of these funds, except for requirements related to fair housing, nondiscrimination, labor standards, and the environment. HUD has interpreted this to mean that HUD can grant specific environmental regulatory waivers only in instances where it previously had the authority to do so. Also, HUD has no authority to waive statutory requirements related to environmental review.
Source: Grantees applicable Allocation Announcement Notice; ODR Digest Volume 10 - If a grantee does not have an approved CDBG-DR Action Plan, does this prevent them from beginning the environmental review process?
HUD encourages environmental reviews to begin as early in the process as possible and does not prohibit grantees from beginning the environmental review before the CDBG-DR Action Plan is approved. To begin an environmental review, there should be sufficient project detail to adequately assess potential adverse impacts. If an environmental review is developed before a clear scope of work is defined, then additional time and effort may be required to re-evaluate as the project is further defined.
Source: 24 CFR 58.30(b); ODR Digest Volume 10 - If a grantee does not have an approved CDBG-DR Action Plan, does this prevent them from submitting a Request for Release of Funds/Certification (RROF/C), HUD Form 7015.15, and receiving an Authority to Use Grant Funds (AUGF), HUD Form 7015.16?
Prior to the approval of the CDBG-DR Action Plan, the RROF/C, HUD Form 7015.15, can be submitted and the AUGF, HUD Form 7015.16, can be certified. However, the grantee cannot obligate or expend any CDBG-DR funds until all program requirements outlined in the consolidated notice are complete. Despite what the name suggests, the Authority to Use Grant Funds, HUD Form 7015.16, only certifies the completion of the environmental review under 24 CFR Part 58. Historically, this has occurred when CDBG-DR funds are forthcoming, but a project already has HUD funding supporting it.
Source: 24 CFR 58 Subpart H – Release of Funds for Particular Projects; ODR Digest Volume 10 - When is the right time to begin the environmental review process?
The environmental review process should begin as soon as a recipient determines the projected use of HUD assistance. For activities that do not have a physical impact and are either exempt or categorically excluded not subject to 58.5 (CENST), the environmental review process can begin right when the program or activities are defined. Projects that contain the potential for environmental impact, classified as categorically excluded subject to 58.5 (CEST); environmental assessment (EA); or environmental impact statement (EIS), can begin when there is sufficient project detail to adequately assess potential adverse impacts. Projects should have no more than 30% design to allow for adequate alternatives to be explored and mitigation measures to be incorporated into the design, as identified in the environmental review record (ERR).
Source: 24 CFR 58.30 and 24 CFR 58.18; ODR Digest Volume 10 - What activities can be completed before a project receives an environmental review approval/certification?
Every activity requires an environmental review record (ERR). However, activities that meet the criterion of 24 CFR 58.35 (Exempt) and 24 CFR 58.35(b) (Categorically excluded not subject to 24 CFR ß58.5 (CENST)) can proceed without HUD approval once 58.6 compliance is complete and the review has been certified and documented in the ERR. Any proposed actions or undertakings with HUD or non-HUD funds requiring a Categorically excluded subject to 24 CFR ß58.5 (CEST), environmental assessment (EA) or environmental impact statement (EIS) cannot proceed without an Authorization to Use Grant Funds (AUGF).
Source: 24 CFR 58.34(b); 24 CFR 58.35(b); 24 CFR 58.43; 24 CFR 58 Subpart H – Release of Funds for Particular Projects; ODR Digest Volume 10 - Is an environmental review required for an emergency situation?
Certain actions may be classified as exempt activities in an emergency, except for applicable requirements of 24 CFR 58.6. Specifically, 24 CFR 58.34(a)(10) classifies, ìAssistance for temporary or permanent improvements that do not alter environmental conditions and are limited to protection, repair, or restoration activities necessary only to control or arrest the effects from disasters or imminent threats to public safety including those resulting from physical deterioration,î as exempt activities.
To be eligible for this exemption, the responsible entity (RE) must document the presence of certain conditions that justify the determination of the exemption. The following three conditions must be met, further outlined in the December 11, 2012, HUD Memorandum – Environmental Review Processing During Emergencies and Following Disasters under 24 CFR Part 58:
1. The activities ìdo not alter environmental conditionsî; 2. The activities are ìlimited to protection, repair, or restoration activities necessary to control or arrest the effectsî; and 3. The activities are necessary "only to control or arrest the effects from disaster or imminent threats to public safety including those resulting from physical deterioration"
All other activities that do not meet these criteria will be subject to the applicable level of environmental review outlined in 24 CFR Part 58.
Source: 24 CFR 58.34(a)(10); HUD Memorandum: Environmental Review Processing During Emergencies and Following Disasters under 24 CFR Part 58 - Are there any regulatory opportunities to expedite the environmental review process during an emergency?
During a Presidentially declared disaster, or during a local emergency that has been declared by the chief elected official of the responsible entity (RE) who have proclaimed that there is an immediate need for public action to protect the public safety, the combined Notice of FONSI and Notice of Intent to Request Release of Funds (NOI/RROF) may be disseminated and/or published simultaneously with the submission of the RROF. The combined Notice of FONSI and NOI/RROF shall state that the funds are needed on an emergency basis due to a declared disaster and that the comment periods have been combined. The Notice shall also invite commenters to submit their comments to both HUD and the responsible entity issuing the notice to ensure that these comments will receive full consideration.
Source: 24 CFR 58.33 - What constitutes a Choice Limiting Action (CLA)?
Choice limiting action (CLA) is a term commonly used to describe an action that creates a violation of 24 CFR 58.22(a). In accordance with the National Environmental Policy Act (NEPA), prior to approving a proposal, federal agencies must objectively consider the environmental impact of the proposed action. 24 CFR 58.22(a) establishes limitations on activities that violate the NEPA requirement of an objective environmental review decision-making process or that limit the ability of the federal agency to reject a project or choose a preferred alternative. A CLA is an action that commits HUD assistance, non-HUD funds, or undertakes project activities prior to environmental clearance. An action is choice limiting if it occurs after a project is federalized and prior to the project obtaining environmental clearance.
Source: 24 CFR 58.22(a) - Does expending non-federal funds on a project before receiving an Authority to Use Grant Funds (AUGF), HUD Form 7015.16, constitute a Choice Limiting Action (CLA)?
The determination of a Choice Limiting Action (CLA) would be dependent on when the federal nexus was established and when the action took place. The federal nexus is the action that creates a legal requirement for the recipient to comply with NEPA and 24 CFR Part 58. CLAs, including commitments of HUD and non-HUD funds, are prohibited after the date the federal nexus is created.
Using a grantee administered Disaster Recovery Homeowner Rehabilitation Program as an example, the federal nexus occurs when the homeowner applies to participate in the program. Any work completed on the property prior to the submission of the application (i.e., the federal nexus) would not be considered a CLA. Any work done after the submission of the application and before the environmental review is fully complete would be considered a CLA. To prevent a CLA, the homeowner will have to momentarily pause any scheduled work when submitting the application for the program and can resume work after the environmental review is complete.
Note: Actions or expenditures of non-HUD funds subject to contracts executed prior to the date of the federal nexus may continue, with the understanding that HUD may not approve the project and depending on program requirements prior spent funds may not be eligible for reimbursement.
Source: 24 CFR 58.22(a) - What are the consequences if Choice Limiting Action (CLA) occurs on a project?
A Choice Limiting Action (CLA) may require repayment of disbursed federal funds, prevention of reimbursing non-federal funds, limitations of using federal fund on the project, establishing procedures to prevent future CLAs, and/or prevent the project from occurring. The exact recourse will determine if the CLA is a statutory or regulatory violation, and the specifics of the CLA. In the event of a possible CLA, the Responsible Entity (RE) should consult with their HUD Regional Environmental Officer (REO) and/or Field Environmental Officer (FEO) for additional guidance.
Source: OEE is currently developing CLA guidance - After a grantee receives an approved Authority to Use Grant Funds (AUGF), HUD Form 7015.16, are there any other conditions the grantee should be aware of before obligating and expending funds?
Despite the name of ìAuthority to Use Grant Fundsî (AUGF), HUD Form 7015.16, the completed form only certifies the completion of the environmental review under 24 CFR Part 58 and does not necessarily mean funds can be used. Grantees must ensure all other program requirements are met before obligation and/or expenditure of HUD funds.
Source: 24 CFR 58 Subpart H – Release of Funds for Particular Projects; ODR to insert applicable requirements. - If a grantee procures a consultant to assist with environmental reviews, what functions can be delegated to the consultant and what aspects must remain under the responsible entity (RE)?
An environmental consultant can prepare the environmental reviews for the RE but cannot certify to the review or Request for Release Funds and Authorization to Use Grant Funds from HUD. It is the responsibility of the RE to certify the review and make the request for funds from HUD. A consultant can also use qualified professionals for making effects determination, to inform a consultation letter, and the environmental review, but the consultant cannot consult with the federal agency. That is the sole responsibility of the RE. Consultants can draft public notices for use by the RE, but the RE is responsible for the accuracy of the content, making documents available to the requesting public, and accepting comments. The consultant can draft responses to the comments on behalf of the RE, but the RE is ultimately responsible for determining if there are substantive comments that potentially affect the project. When the RE certifies to a consultantís review they are accepting the accuracy of the review, and any conditions or mitigation measures recommend by the consultant should be evaluated by the RE for final determination.
Source: 24 CFR 58.4; 24 CFR 58.5 - What options are available to notify the public of a Notice of Intent to Request the Release of Funds (NOI/RROF) and/or Finding of No Significant Impact (FONSI) notices to begin the public comment period?
The most common practice to circulate NOI/RROFs and/or NOI/RROF/FONSI's is through the publication in a newspaper of general circulation in the community or county where the project is proposed. Alternatively, 24 CFR 58.43 allows for the notice to be prominently displayed in public buildings, such as the Post Office and within the project area or in accordance with public procedures established as part of the citizen participation process. In addition, the RE should send notice to individuals and groups known to be interested in the activities, the appropriate tribal, local, State, and Federal Agency having jurisdiction, and to the HUD Field Office.
Source: 24 CFR 58.43, 24 CFR 58.45; and 24 CFR 58.70 - Does the Notice of Intent to Request the Release of Funds (NOI/RROF) and/or Finding of No Significant Impact (FONSI) have to be published in a printed newspaper or would an electronic newspaper sufficiently meet the publication requirement?
When the Responsible Entity (RE) pursues notifying the public of a NOI/RROF and/or NOI/RROF/FONSI via publication in a newspaper of general circulation in the affected community, it should be done through a physically printed medium. REs can further supplement the public notification by also including the NOI/RROF and/or NOI/RROF/FONSI in electronic newspaper(s), posting to REís website, and/or social media outlets.
Source: 24 CFR 58.43 - Does Radon have to be considered for CDBG-DR and CDBG-MIT projects?
Any project that is subject to HUDís contamination regulation at 24 CFR 50.3(i) or 24 CFR 58.5(i) must consider Radon, beginning on April 11, 2024. This includes projects in the CDBG-DR and CDBG-MIT programs. There are a few projects exempt from having to consider radon in the contamination analysis and are specifically listed in Notice CPD-23-103.
Source: Notice CPD-23-103: Departmental Policy for Addressing Radon in the Environmental Review Process; 24 CFR 58.5(i) - What Radon related expenses, if any, are covered under the CDBG-DR and CDBG-MIT program?
Radon testing and radon mitigation is a fully eligible expense under CDBG-DR and CDBG-MIT.
Source: Notice CPD-23-103: Departmental Policy for Addressing Radon in the Environmental Review Process; 24 CFR 58.5(i) - Who is responsible for the disclosure of known lead-based paint and lead-based paint hazards in homes built before 1978?
Before ratification of a contract for housing sale or lease, sellers and landlords must disclose known lead-based paint and lead-based paint hazards and provide available reports to buyers and renters. Sellers and landlords must also give buyers and renters the Protect Your Family from Lead in Your Home pamphlet. Sales contracts and lease agreements must include notification and disclosure language. Sellers, lessors, and real estate agents share the responsibility for ensuring compliance.
Source: 24 CFR 35 subpart A; ODR Digest Volume 11 - Does the lead safe housing rule apply to improvements to commercial buildings or other public facilities?
The lead safe housing rule is strictly limited to housing units built prior to 1978. There are some types of housing that are excluded from the requirement; housing exclusively designated for the elderly or people with disabilities, zero-bedroom dwellings, and unoccupied housing that will remain vacant until demolished. In addition, property that has been certified by a lead-based paint inspector that is found to be free of lead-based paint, property where all lead-based paint has been removed, and any rehabilitation or housing improvement that does not disturb a painted surface are also excluded from the lead safe housing rule.
Source: 24 CFR 35; ODR Digest Volume 11 - Is lead exposure only a risk to young children?
No. Everyone is at risk if lead is inhaled or ingested, however, children under the age of 6 years absorb more lead than adults do, and their brains and nervous system are sensitive to the effects. Elevated blood lead levels in pregnant women can result in exposure to the developing baby.
Source: ODR Digest Volume 11 - Do lead regulations apply to Housing Rehabilitation Programs funded by CDBG DR?
The Lead Safe Housing Rule applies to any work undertaken subsequent to, or beyond, emergency actions - Repairs necessary to respond to the emergency to safeguard against imminent danger to life, health, safety or protect structure from further damage, or met another exemption such as: the housing unit was constructed on or after January 1, 1978, the rehabilitation did not disturb any painted surface; the property meets the definition of “housing for the elderly” or the residential property is designed exclusively for persons with disabilities 24 CFR 35.110; An inspection performed according to 24 CFR 35.1320(a) found the property contained no lead-based paint; or According to documented methodologies, lead-based paint has been identified and removed, and the property has achieved clearance. This exemption does not apply where enclosure or encapsulation have been used as a method of abatement.
Source: 24 CFR 35.115; ODR Digest Volume 11
Content current as of August 23, 2024.