HUD has developed guidelines that are designed to provide the recipient with a framework for financially underwriting and selecting CDBG-assisted economic development projects which are financially viable and will make the most effective use of the CDBG funds. The projected use of funds may also include activities that the recipient certifies are designed to meet other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community where other financial resources are not available to meet such needs. This term does not relate to taxes, or the establishment of the value of real estate for the purpose of levying real estate, property, or ad valorem taxes, and does not include periodic charges based on the use of a public improvement, such as water or sewer user charges, even if such charges include the recovery of all or some portion of the capital costs of the public improvement. Microsoft Edge, Google Chrome, Mozilla Firefox, or Safari. Specific exceptions to this general rule are operating and maintenance expenses associated with public service activities, interim assistance, and office space for program staff employed in carrying out the CDBG program. (b) The provision of assistance to a private for-profit business, including, but not limited to, grants, loans, loan guarantees, interest supplements, technical assistance, and other forms of support, for any activity where the assistance is appropriate to carry out an economic development project, excluding those described as ineligible in 570.207(a). Program administration includes the following types of assignments: (i) Providing local officials and citizens with information about the program; (ii) Preparing program budgets and schedules, and amendments thereto; (iii) Developing systems for assuring compliance with program requirements; (iv) Developing interagency agreements and agreements with subrecipients and contractors to carry out program activities; (v) Monitoring program activities for progress and compliance with program requirements; (vi) Preparing reports and other documents related to the program for submission to HUD; (vii) Coordinating the resolution of audit and monitoring findings; (viii) Evaluating program results against stated objectives; and. (ii) Necessary to complete the urban renewal plan, as then in effect, including initial land redevelopment permitted by the plan. Reasonable costs equivalent to those described in paragraphs (a), (b), (e) and (f) of this section for overall program management of the Rental Rehabilitation and Housing Development programs authorized under section 17 of the United States Housing Act of 1937, whether or not such activities are otherwise assisted with funds provided under this part. (b) Ineligible activities. (n) Homeownership assistance. (ii) A portion of the grant received for the program year which is the highest of the following amounts: (A) The amount determined by applying the percentage of the grant it obligated for public services in the 1982 program year against the grant for its current program year; (B) The amount determined by applying the percentage of the grant it obligated for public services in the 1983 program year against the grant for its current program year; (C) The amount of funds it obligated for public services in the 1982 program year; or. "Published Edition". Documentation must be retained pursuant to the recordkeeping requirements contained at 570.506 (b)(8)(ii). (ii) The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct from the overall costs of the multiple-use building and/or facility. In assessing any such evidence, the full range of direct effects of the assisted activity will be considered. Any service area located within the recipient's jurisdiction and having a proportion of low and moderate income persons at or above this level shall be considered to be within the highest quartile. Find point of contact information for HUD's grantees. Background and more details are available in the (c) Public facilities and improvements. (3) In any case where the activity undertaken for the purpose of creating or retaining jobs is a public improvement and the area served is primarily residential, the activity must meet the requirements of paragraph (a)(1) of this section as well as those of paragraph (a)(4) of this section in order to qualify as benefiting low and moderate income persons. (C) It evidences pervasive poverty and general distress by meeting at least one of the following standards: (1) All block groups in the census tract have poverty rates of at least 20 percent; (2) The specific activity being undertaken is located in a block group that has a poverty rate of at least 20 percent; or. The general rule is that any expense associated with repairing, operating or maintaining public facilities, improvements and services is ineligible. The purchase of construction equipment is ineligible, but compensation for the use of such equipment through leasing or depreciation pursuant to 2 CFR part 200, subpart E, as applicable for an otherwise eligible activity is an eligible use of CDBG funds. Where two or more rental buildings being assisted are or will be located on the same or contiguous properties, and the buildings will be under common ownership and management, the grouped buildings may be considered for this purpose as a single structure. See 570.420(d)(3) for additional discussion of the primary objective requirement for insular areas funded under section 106 of the Act. (2) Operating and maintenance expenses. This web site is designed for the current versions of (ii) A job is considered to be lost due to the provision of CDBG assistance if the job is relocated within three years of the provision of assistance to the business; or the time period within which jobs are to be created as specified by the agreement between the business and the recipient if it is longer than three years. To utilize CDBG funds for a public service, the service must be either: (2) In any case where the cost per job to be created or retained (as determined under paragraph (a)(4)(vi)(F)(1) of this section) is $10,000 or more, the requirement must be met by aggregating the jobs created or retained as a result of the public facility or improvement by all businesses in the service area of the facility/improvement. is available with paragraph structure matching the official CFR (2) Independent contractor relationship. (2) Fees for use of facilities. 1/1.1 (iii) Where CDBG assistance for an activity is limited to job training and placement and/or other employment support services, the jobs assisted with CDBG funds shall be considered to be created or retained jobs for the purposes of applying the individual activity standards in paragraph (b)(3)(i) of this section. This contact form is only for website help or website suggestions. (h) Section 17 of the United States Housing Act of 1937. Find point of contact information for HUD's grantees. (a) Eligible activities. Historic properties are those sites or structures that are either listed in or eligible to be listed in the National Register of Historic Places, listed in a State or local inventory of historic places, or designated as a State or local landmark or historic district by appropriate law or ordinance. Criteria for determining whether an activity addresses one or more of these objectives are found in 570.208. (2) Operating and maintenance expenses. The recipient may use only one of these methods during the program year. Provision of public services (including labor, supplies, and materials) including but not limited to those concerned with employment, crime prevention, child care, health, drug abuse, education, fair housing counseling, energy conservation, welfare (but excluding the provision of income payments identified under 570.207(b)(4)), homebuyer downpayment assistance, or recreational needs. A: Grantees should consider how to expedite use of funds, and not assume that their normal CDBG funding distribution procedures are adequate to swiftly distribute and use CDBG-CV grants. (iii) Providing general support, including, but not limited to, peer support programs, counseling, child care, transportation, and other similar services, to owners of microenterprises and persons developing microenterprises. The purpose of the chapter is to help ensure that grantees will: (1) use CDBG funds only for activities that fall under an authorized category of basic eligibility; (2) properly classify the activity; and (3) provide adequate documentation as required by the category it selects for each such activity. (ii) All housing activities for which the Community Development Financial Institution obligates CDBG assistance during the program year may be considered to be a single structure for purposes of applying the criteria at paragraph (a)(3) of this section. The primary objective of the Act is described in section 101(c) of the Act. HUD allocates funds based on unmet recovery needs. A business operation includes, but is not limited to, any equipment, employment opportunity, production capacity or product line of the business. Learn about what HUD grantees are doing across the nation. This includes the lease of a facility, equipment, and other property needed for the public service. (iii) An activity to develop, establish, and operate for up to two years after the establishment of, a uniform emergency telephone number system serving an area having less than the percentage of low- and moderate-income residents required under paragraph (a)(1)(i) of this section or (as applicable) paragraph (a)(1)(ii) of this section, provided the recipient obtains prior HUD approval. (ix) Managing or supervising persons whose primary responsibilities with regard to the program include such assignments as those described in paragraph (a)(1)(i) through (viii) of this section. Housing age Population growth lag in relationship to other metropolitan areas CDBG eligible activities Over a one, two or three-year period, as selected by the grantee, no less than 70 percent of. (v) Pre-award costs are limited to those authorized under paragraph (h) of this section. Examples of ineligible operating and maintenance expenses are: (i) Maintenance and repair of publicly owned streets, parks, playgrounds, water and sewer facilities, neighborhood facilities, senior centers, centers for persons with a disabilities, parking and other public facilities and improvements. Acquisition, construction, reconstruction, rehabilitation or installation of public facilities and improvements, except as provided in 570.207(a), carried out by the recipient or other public or private nonprofit entities. Nationwide, CDBG investment in Public Facilities and Improvements is significant. Explore landing pages for HUD's programs, systems, and related topics. Our audit objectives are to assess whether selected direct non-State disaster grantees have viable plans to spend their remaining grant funds on eligible activities that benefit program participants within a reasonable amount of time, and determine what factors impacted each grantee's ability to timely spend their funds. In no event, however, shall such compensation exceed the equivalent of the daily rate paid for Level IV of the Executive Schedule. (ii) The activity consists of or includes any of the following: (A) General promotion of the community as a whole (as opposed to the promotion of specific areas and programs); (B) Assistance to professional sports teams; (C) Assistance to privately-owned recreational facilities that serve a predominantly higher-income clientele, where the recreational benefit to users or members clearly outweighs employment or other benefits to low- and moderate-income persons; (D) Acquisition of land for which the specific proposed use has not yet been identified; and. It is an allocation of funds from the U.S. Department of Housing and Urban Development (HUD), available when the president declares a major disaster and there are significant unmet needs for long-term recovery. The environmental review procedures set forth at 24 CFR part 58 must be completed for each activity (or project as defined in 24 CFR part 58), as applicable. (11) Improvements designed to remove material and architectural barriers that restrict the mobility and accessibility of elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph (a) of this section. If the assistance will not result in a relocation covered by this section, a certification from the assisted business that neither it, nor any of its subsidiaries, has plans to relocate jobs at the time the agreement is signed that would result in a significant job loss as defined in this rule; and. Payment of the cost of completing an urban renewal project funded under title I of the Housing Act of 1949 as amended. (i) Relocation. Where the relocation assistance is voluntary on the part of the grantee the recipient may qualify the assistance either on the basis of the national objective addressed by the displacing activity or on the basis that the recipients of the relocation assistance are low and moderate income persons. (v) For purposes of determining qualification under this criterion, activities of the same type that serve different areas will be considered separately on the basis of their individual service area. These guidelines also apply to activities carried out under the authority of 570.204 that would otherwise be eligible under 570.203, were it not for the involvement of a Community-Based Development Organization (CBDO). user convenience only and is not intended to alter agency intent (m) Construction of housing. As available, the recipient must provide information that identifies the total number of calls actually received over the preceding 12-month period for each of the emergency services to be covered by the emergency telephone number system and relates those calls to the geographic segment (expressed as nearly as possible in terms of census tracts, block numbering areas, block groups, or combinations thereof that are contained within the segment) of the service area from which the calls were generated. Funds collected through such special assessments are not program income. Explore featured publications and browse regulations, policy guidance, toolkits, and other resources. Acquisition in whole or in part by the recipient, or other public or private nonprofit entity, by purchase, long-term lease, donation, or otherwise, of real property (including air rights, water rights, rights-of-way, easements, and other interests therein) for any public purpose, subject to the limitations of 570.207. (a) The following activities may not be assisted with CDBG funds: (1) Buildings or portions thereof, used for the general conduct of government as defined at 570.3(d) cannot be assisted with CDBG funds. This is an automated process for (1) Assistance to private individuals and entities, including profit making and nonprofit organizations, to acquire for the purpose of rehabilitation, and to rehabilitate properties, for use or resale for residential purposes; (2) Labor, materials, and other costs of rehabilitation of properties, including repair directed toward an accumulation of deferred maintenance, replacement of principal fixtures and components of existing structures, installation of security devices, including smoke detectors and dead bolt locks, and renovation through alterations, additions to, or enhancement of existing structures and improvements, abatement of asbestos hazards (and other contaminants) in buildings and improvements that may be undertaken singly, or in combination; (3) Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such financing is determined by the recipient to be necessary or appropriate to achieve the locality's community development objectives; (4) Improvements to increase the efficient use of energy in structures through such means as installation of storm windows and doors, siding, wall and attic insulation, and conversion, modification, or replacement of heating and cooling equipment, including the use of solar energy equipment; (5) Improvements to increase the efficient use of water through such means as water savings faucets and shower heads and repair of water leaks; (6) Connection of residential structures to water distribution lines or local sewer collection lines; (7) For rehabilitation carried out with CDBG funds, costs of: (ii) Hazard insurance premiums, except where assistance is provided in the form of a grant; and. For the purpose of this paragraph, activities in support of the development of low or moderate income housing including clearance, site assemblage, provision of site improvements and provision of public improvements and certain housing pre-construction costs set forth in 570.206(g), are not considered as activities to subsidize or assist new residential construction. For any time period in which a community has no open HUD-administered or Insular Areas grants, the aggregate standards shall be applied to all applicable activities for which program income is obligated during that period. (D) If block group data are not available for the entire jurisdiction, other data acceptable to the Secretary may be used in the above calculations. Organization and Purpose (3) Arms-length transactions. An activity designed to create or retain permanent jobs where at least 51 percent of the jobs, computed on a full time equivalent basis, involve the employment of low- and moderate-income persons. Assistance to microenterprises as defined by Section 102(a)(22) of the Housing and Community Development Act of 1974; and. This document is available in the following developer friendly formats: Information and documentation can be found in our [53 FR 34439, Sept. 6, 1988, as amended at 54 FR 47031, Nov. 8, 1989; 57 FR 27119, June 17, 1992; 60 FR 1943, Jan. 5, 1995; 60 FR 17445, Apr. For entitlement grants under subpart D of this part, nonentitlement CDBG grants in Hawaii, and for recipients of insular area funds under section 106 of the Act, compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of the program income received during the grantee's immediately preceding program year. This section identifies specific activities that are ineligible and provides guidance in determining the eligibility of other activities frequently associated with housing and community development. (2) Compliance with national objectives. (B) The job can reasonably be expected to turn over within the following two years and that steps will be taken to ensure that it will be filled by, or made available to, a low- or moderate-income person upon turnover. 29, 1996; 65 FR 70215, Nov. 21, 2000; 67 FR 47213, July 17, 2002; 71 FR 30034, May 24, 2006; 80 FR 69870, Nov. 12, 2015; 81 FR 90659, Dec. 14, 2016]. 20, 1996; 61 FR 18674, Apr. The provisions of information and other resources to residents and citizen organizations participating in the planning, implementation, or assessment of activities being assisted with CDBG funds. What are the main objectives of CDBG-DR programs? (5) Cost principles. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this subpart, this section does not authorize: (1) Carrying out an activity described as ineligible in 570.207(a); (2) Carrying out public services that do not meet the requirements of 570.201(e), except that: (i) Services carried out under this section that are specifically designed to increase economic opportunities through job training and placement and other employment support services, including, but not limited to, peer support programs, counseling, child care, transportation, and other similar services; and. The Electronic Code of Federal Regulations (eCFR) is a continuously updated online version of the CFR. (c) Code enforcement. Recipients of Fiscal Year 1999 Small Cities Program funding in New York will follow the requirements for State CDBG recipients. 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