Using CDBG & HOME Funds for Disaster Response

1. Using CDBG & HOME Funds for Disaster Response February 17, 2017

2. Pre-Disaster Planning • Review and update your citizen participation plan • Address the possibility of a disaster in your consolidated plan and annual action plan • Proactively manager compliance with CDBG’s low and moderate income benefit requirement

3. Citizen Participation Plan • A substantial amendment will result in a delay in accessing CPD funds in the event of a disaster. • Specify the criteria you will use to determine what changes in planned or actual activities constitutes a substantial amendment to the consolidated plan.

4. What Triggers a Substantial Amendment? • A change in allocation priorities or a change in the method of distribution of funds not previously described in the consolidated plan; • To carry out an activity, using funds from any program covered by the consolidated plan, not previously described in the action plan; or, • To change the purpose, scope, location, or beneficiaries of an activity. The Regulation: 24 CFR 91.505

5. Consolidated Plan & Annual Action Plan Make disaster response and recovery a priority in the consolidated plan and in the annual action plan Specifically state funds may need to be reallocated in the case of a disaster; how reallocation decisions will be made; and, how CPD funds could be used. Indicate the resources that are reasonably expected to be made available and activities expected to be undertaken to address the disaster needs identified in the consolidated plan.

6. State Specific Provide a set-aside for use in responding to emergency needs in their communities. Use the method of distribution to provide for flexibility of reordering funding categories in the event of a disaster occurring within the state. Establish a set-aside for disaster recovery and designate a process for how localities would apply for funds.

7. CDBG Overall Benefit Requirement Not less than 70 percent of the aggregate of CDBG expenditures shall be for activities that benefit low and moderate income persons. Option of choosing a one, two or three-year certification period. Grantees anticipating to utilize CDBG funds for urgent need and slum and blight activities as a result of disaster events should consider calculating their overall benefit over a three-year period to allow for greater flexibility. Flexibility is key!

8. Duplication of Benefits Duplication of Benefits occurs: • When funding from 2 or more government agencies is provided for the same costs, or • When assistance results in a duplication of payment for losses already paid for by private insurance.

9. Duplication of Benefits FEMA & SBA provide funds to meet emergency, short-term recovery needs

10. Duplication of Benefits Examples A family’s damaged home costs $100,000 to repair. The homeowner receives $100,000 in insurance proceeds. The homeowner is not eligible to receive additional assistance to repair the home. Damage to a 4 unit multi-family building costs $100,000 to repair. The owner receives $80,000 in insurance proceeds and $10,000 from SBA. The owner could be eligible to receive $10,000 in HUD assistance to repair the home.

11. CDBG Eligible UsesInterim Assistance Chief elected official determines emergency conditions exist Area exhibits signs of physical deterioration Immediate action is necessary to arrest the deterioration Permanent improvements will be carried out as soon as practicable Activities are not funded by FEMA or SBA

12. CDBG Eligible UsesInterim Assistance Clearance of debris Provision of extra security patrols Demolition, clearance and/or reconstruction of damaged property posing an immediate threat to public safety Emergency reconstruction of essential water, sewer, electrical and telephone facilities Providing a variety of relief services to individuals and businesses Matching FEMA or other aid programs

13. CDBG Eligible Uses • Public Services, including • Payment of homeowner’s insurance deductible • 3 months of emergency grant payments -must be made directly to provider • Housing rehabilitation • Homebuyer programs replacing disaster damaged residences • Acquisition programs that purchase properties in floodplains • Infrastructure improvements • Small business grants and loans

14. Section 108 Loan Guarantees Acquisition of real property -including related public improvements, clearance and relocation Rehabilitation of publicly owned real property-including infrastructure such as streets Housing rehabilitation Public facilities Economic development activities

15. CDBG National Objective Requirements • All CDBG activities, including those used for disaster response and recovery, must meet a national objective. • When considering slum & blight or urgent need, know the regulations • Overall benefit requirement §570.200(a)(3) & §570.484 • Slum/blight area or spot basis §570.208(b) & §570.483(c) • Urgent Need §570.208(c) & §570.483(d)

16. Slum/Blight Area§570.208(b)(1) & §570.483(c)(1) Meet the definition of slum, blighted, deteriorated or deteriorating area under state or local law Make sure the area meets the requirements of the regulation Document boundaries of area Document the area’s condition and standards at the time of designation Maintain records on how area met criteria

17. Slum/Blight Spot Basis§570.208(b)(2) & §570.483(c)(2) • The following activities may be undertaken on a spot basis to eliminate specific conditions of blight, physical decay, or environmental contamination that are not located in a slum or blighted area: • Acquisition • Clearance • Relocation • Historic preservation • Remediation of environmentally contaminated properties • Rehabilitation of buildings or improvements • Rehabilitation must be limited to eliminating those conditions that are detrimental to public health and safety. • If acquisition or relocation is undertaken, it must be a precursor to another eligible activity (funded with CDBG or other resources) that directly eliminates the specific conditions of blight or physical decay, or environmental contamination.

18. Urgent Need§570.208(c) & §570.483(d) Grantee must certify: • There is a serious and immediate threat to the health or welfare of the community. • The threat is of recent origin (18 months). • The grantee is unable to finance the activity on its own. • Other sources of funding are not available.

19. Uses of HOME Funds • HOME funds can be used for: • New construction to expand housing stock • Rental or Homebuyer • Rehabilitation or reconstruction of damaged units • Emergency repairs (with waiver) • Tenant-Based Rental Assistance • For rental of housing units (not temporary housing) • For households not eligible for FEMA assistance

20. Environmental Review Process During Presidentially Declared Disasters • Emergency activities for temporary improvements can be exempt from the environmental review process under 24 CFR 58.34(a)(10) when: • do not alter environmental conditions, and • are limited to protection, repair, or restoration necessary only to control or arrest the effects of the disaster • Contact your HUD environmental staff person for guidance on activities that may be considered exempt and the required documentation.

21. Environmental Review Process During Emergencies and Following Disasters • Expedited process for not exempt or categorically excluded – not subject to Section 58.5 (CENST) emergency activities • Grantees can publish a combined Finding of No Significant Impact (FONSI) and Notice of Intent to Request Release of Funds (NOI/RROF). • Comment period would be 15 days. • Combined Notice must: • state funds are needed on an emergency basis due to the declared disaster and comment periods have been combined. • invite commenters to submit comments to both HUD and grantee

22. CDBG Regulatory & Statutory Relief "For funds designated under this title by a recipient to address the damage in an area for which the President has declared a disaster under title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the Secretary may suspend all requirements for purposes of assistance under section 106 for that area, except for those related to public notice of funding availability, nondiscrimination, fair housing, labor standards, environmental standards, and requirements that activities benefit persons of low- and moderate-income."

23. CDBG Regulatory & Statutory Relief • Extension of the deadline for submitting the annual performance report (CAPER) when the disaster delays its completion (§91.520(a)) • Change in the period, or extension of length of time (up to 3 years), within which to meet the 70 percent spending requirements (§570.200(a)(3)) and §570.484 • Waiving the public comment period for substantial amendments • Removal of other limitations that are not required by statute • Removal of prohibitions on new housing construction (§570.207(b)(3)) • Modification of the limitation on the amount of CDBG funds used for public services (§570.201(e))

24. HOME Regulatory & Statutory Relief • HOME statute permits HUD to suspend statutory requirements except: • Income Targeting • Housing Affordability • Nondiscrimination and Fair Housing • Environmental Standards • Labor Standards

25. HOME Regulatory & Statutory Relief • Common waivers/suspensions include: • Match Reduction • Elimination of CHDO set-aside • 2 Year Commitment Deadline • 95% Homeownership Value Limit • Property Standards • Income documentation (limited time)

26. Regulatory & Statutory Relief Discuss need with CPD Director to determine if waiver or suspension is needed. Submit request to HUD field office. HUD will work closely with grantee to ensure smooth and expedited process.

27. Using CDBG & HOME Funds for Disaster Response Questions?