Hurricane Sandy Community Development Block Grant Disaster Recovery Grants (CDBG-DR)

The overall CDBG program objective is to develop viable urban communities, by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for persons of low and moderate income. CDBG DR program fu

Recipients of Community Development Block Grant Disaster Recovery (CDBG-DR), funds shall be allocated directly to States and units of general local government at the discretion of the Secretary of Housing and Urban Development (HUD), to use such funds to supplement Federal assistance provided under section 402, 403, 404, 406, 407, or 502 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).

CDBG Disaster Recovery funds are made available to States and units of general local governments designated by the President of the United States as disaster areas. These communities must have significant unmet recovery needs and the capacity to carry out a disaster recovery program (usually these are governments that already receive HOME or Community Development Block Grant allocations). Grantees may use CDBG Disaster Recovery funds for recovery efforts involving housing, economic development, infrastructure and prevention of further damage to affected areas. However, CDBG DR funds may not be used for activities reimbursable by or for which funds are made available by the Federal Emergency Management Agency or the Army Corps of Engineers.

The principal beneficiaries of CDBG DR funds are low- and moderate-income persons (generally defined as a member of a family having an income equal to or less than the Section 8 low income limit established by HUD) in communities that have experienced a disaster event. At least 50 percent of each grantee's CDBG-DR grant award must be used for activities that benefit low- and moderate-income (LMI) persons. These can be either activities in which all or the majority of people who benefit have low or moderate incomes or activities that benefit an area or service group in which at least 51 percent of the populous are of low- and moderate-income. Grantees must meet the 50 percent LMI expenditure requirement unless a waiver has been requested by the grantee and approved by HUD.

Recipients may undertake a wide range of activities directed toward addressing unmet needs of disaster relief, long-term recovery, restoration of infrastructure and housing, and economic revitalization. However, CDBG DR funds may not be used for activities reimbursable by other sources of funds, such as those made available by the Federal Emergency Management Agency, the Army Corps of Engineers, or private insurance. Grantees must conduct an assessment of community impacts and unmet needs to guide the development and prioritization of planned recovery activities and develop their own programs and funding priorities as long as programs/activities conform to the statutory standards and program regulations. Some of the specific activities that can be carried out with Community Development Block Grant Disaster recovery (CDBG DR) funds include buying damaged properties in a flood plain and relocating residents to safer areas; relocation payments for people and businesses displaced by the disaster; debris removal not covered by FEMA; rehabilitation of homes and buildings damaged by the disaster; buying, constructing, or rehabilitating public facilities such as streets, neighborhood centers, and water, sewer and drainage systems; code enforcement; homeownership activities such as down payment assistance, interest rate subsidies and loan guarantees for disaster victims; public services (generally limited to no more than 15 percent of the grant); helping businesses retain or create jobs in disaster impacted areas; and planning and administration costs (limited to no more than 20 percent of the grant). Eligible activities must meet at least one of three program national objectives: benefit persons of low and moderate income, aid in the prevention or elimination of slums or blight, or meet other urgent community development needs because existing conditions pose a serious and immediate threat to the health and welfare of the community where other financial resources are not available. CDBG Disaster Recovery grants primarily benefit low-income residents in and around communities that have experienced a natural disaster. At least 50 percent of each grantee's CDBG-DR grant award must be used for activities that benefit low- and moderate-income (LMI) persons. These can be either activities in which all or the majority of people who benefit have low or moderate incomes or activities that benefit an area or service group in which at least 51 percent of the populous are of low- and moderate-income. Recipients may contract with other local agencies or nonprofit organizations to carry out components of their programs. Grantees must meet the 50 percent LMI expenditure requirement unless a waiver has been requested by the grantee and approved by HUD. Recipients may only carry out eligible activities as listed in 24 CFR 570.201-207 or for which a waiver or alternative requirement has been granted by the Secretary, based upon a determination that good cause exists and that the waiver or alternative requirement is not inconsistent with the overall purposes of Title I of the HCD Act.

CDBG-DR grantees may use up to five (5) percent of the total grant award for grant administration and up to fifteen (15) percent of the total grant award for planning costs. In addition, grantees are limited to spending a maximum of fifteen (15) percent of their total grant amount on public services. Public service costs subject to the fifteen (15) percent cap are those defined in 42 U.S.C. 5305(a)(8) and more broadly in 24 CFR 570.201(e). For all other eligible uses, the aggregate use of CDBG-DR funds shall principally benefit low- and moderate-income families in a manner that ensures that at least seventy (70) percent, (or another percentage permitted by HUD in a waiver), of the grant amount is expended for activities that benefit low and moderate income persons.

To ensure the timely expenditure of funds, section 904(c) under Title IX of P.L. 113-2 that all funds be expended within two years of the date HUD obligates funds to a grantee (funds are obligated to a grantee upon HUD's signing of the grantee's CDBG DR grant agreement). Action Plans must demonstrate how funds will be fully expended within two years of obligation. For any funds that the grantee believes will not be expended by the deadline, the grantee may request an extension of the two-year expenditure deadline by submitting an Expenditure Extension Request consisting of a completed template and cover letter justifying why it is necessary to extend the deadline for a specific portion of funds. Extension requests submitted less than sixty days prior to the scheduled expenditure deadline must include a letter signed by the chief elected official of the grantee agency. Additionally, P.L. 113-2 requires that HUD obligate all funds provided under Chapter 9, Community Development Fund, not later than September 30, 2017. Method of awarding/releasing assistance: by letter of credit.

As a condition of making any grant under this appropriation, the Secretary is required to certify in advance that grantees have in place proficient financial controls and procurement processes and have established adequate procedures to prevent any duplication of benefits as defined by section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5155), to ensure timely expenditure of funds, to maintain comprehensive websites regarding all disaster recovery activities assisted with these funds, and to detect and prevent waste, fraud, and abuse of funds. An environmental impact assessment is required for this program. This program is excluded from coverage under E.O. 12372.

P.L. 113-2 provides that funds shall be awarded directly to a State or unit of general local government (UGLG) at the discretion of the Secretary. To comply with statutory direction that funds be used for disaster-related expenses in the most impacted and distressed areas, the Department computed direct allocations to eligible grantees totaling $14,181,892,000 based on the best available data that cover all the eligible affected areas. States and local governments receiving a CDBG DR allocation may carry out programs and/or activities directly or through subrecipients, including local governments, governmental agencies, and non-profit entities. The remaining $999,108,000 appropriated under P.L 113-2 has been awarded to eligible grantees based on a competition and is allocated under a separate CFDA number (14.272).

After a grantee receives an allocation under a published Federal Register notice, it must submit an initial Action Plan for Disaster Recovery within a time frame specified in the specific applicable Federal Register Notice.

Administrative appeals process followed if grant funds are withheld or reduced, or repayment proposed for non-compliance or non-performance.