[Federal Register Volume 81, Number 29 (Friday, February 12, 2016)]
[Notices]
[Pages 7567-7569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02913]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5696-N-18]
Additional Clarifying Guidance, Waivers and Alternative
Requirements for Grantees in Receipt of Community Development Block
Grant Disaster Recovery Funds Under Public Law 113-2 for the Submission
of Expenditure Deadline Extension Requests and Urgent Need
Certification Extensions and for the Provision of Interim Mortgage
Assistance by the State of New York
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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SUMMARY: This notice provides additional clarifying guidance for all
Community Development Block Grant Disaster Recovery (CDBG-DR) grantees
in receipt of funds under the Disaster Relief Appropriations Act, 2013
(the Appropriations Act), with regard to the submission of requests for
an extension of the 2-year expenditure deadline established for funds
provided under the Appropriations Act and the continued use of the
alternative urgent need national objective. This notice also provides
an alternative requirement for New York State as a grantee in receipt
of CDBG-DR funds under the Appropriations Act. This alternative
requirement addresses the period of time in which interim mortgage
assistance may be provided to beneficiaries in the State's housing
recovery programs.
DATES: Effective Date: February 17, 2016.
FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, Office of
Block Grant Assistance, Department of Housing and Urban Development,
451 7th Street SW., Room 7286, Washington, DC 20410, telephone number
202-708-3587. Persons with hearing or speech impairments may access
this number via TTY by calling the Federal Relay Service at 800-877-
8339. Facsimile inquiries may be sent to Mr. Gimont at 202-401-2044.
(Except for the ``800'' number, these telephone numbers are not toll-
free.) Email inquiries may be sent to [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Applicable Rules, Statutes, Waivers, and Alternative
Requirements
III. Catalog of Federal Domestic Assistance
IV. Finding of No Significant Impact
I. Background
The Appropriations Act (Pub. L. 113-2, approved January 29, 2013)
made available $16 billion in CDBG-DR funds for necessary expenses
related to disaster relief, long-term recovery, restoration of
infrastructure and housing, and economic revitalization in the most
impacted and distressed areas, resulting from a major disaster declared
pursuant to the Robert T. Stafford Disaster Relief and Emergency
Assistance Act of 1974 (42 U.S.C. 5121 et. seq.) (Stafford Act) due to
Hurricane Sandy and other eligible events in calendar years 2011, 2012,
and 2013. On March 1, 2013, the President issued a sequestration order
pursuant to section 251A of the Balanced Budget and Emergency Deficit
Control Act, as amended (2 U.S.C. 901a), and reduced the amount of
funding for CDBG-DR grants under the Appropriations Act to $15.18
billion. To date, a total of $15.18 billion has been allocated or set
aside: $13 billion in response to Hurricane Sandy, $514 million in
response to disasters occurring in 2011 or 2012, $655 million in
response to 2013 disasters, and $1 billion set aside for the National
Disaster Resilience Competition.
This notice applies to all CDBG-DR grantees in receipt of
allocations under the Appropriations Act, which are described within
the Federal Register notices published by the Department on March 5,
2013 (78 FR 14329), April 19, 2013 (78 FR 23578), May 29, 2013 (78 FR
32262), August 2, 2013 (78 FR 46999), November 18, 2013 (78 FR 69104),
December 16, 2013 (78 FR 76154), March 27, 2014 (79 FR 17173), June 3,
2014 (79 FR 31964), July 11, 2014 (79 FR 40133), October 7, 2014 (79 FR
60490), October 16, 2014 (79 FR 62182), January 8, 2015 (80 FR 1039),
April 2, 2015 (80 FR 17772), May 11, 2015 (80 FR 26942), August 25,
2015 (80 FR 51589), and November 18, 2015 (80 FR 72102), referred to
collectively in this notice as the ``prior notices.'' The requirements
of the prior notices continue to apply, except as modified by this
notice.\1\
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\1\ Links to the prior notices, the text of the Appropriations
Act, and additional guidance prepared by the Department for CDBG-DR
grants, are available on the HUD Exchange Web site: https://www.hudexchange.info/cdbg-dr/cdbg-dr-laws-regulations-and-federal-register-notices/.
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II. Applicable Rules (Including Clarifying Guidance), Statutes,
Waivers, and Alternative Requirements
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 HUD's
obligation, or use by the recipient, of these funds (except for
requirements related to fair housing, nondiscrimination, labor
standards, and the environment). Waivers and alternative requirements
are based upon a determination by the Secretary that good cause exists
and that the waiver or alternative requirement is not inconsistent with
the overall purposes of title I of the Housing and Community
Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCD Act). Regulatory
waiver authority is also provided by 24 CFR 5.110, 91.600, and 570.5.
For the waivers and alternative requirements described in this
notice, the Secretary has determined that good cause exists and that
the waiver and alternative requirements are not inconsistent with the
overall purpose of the HCD Act. Grantees may request waivers and
alternative requirements from the Department as needed to address
specific needs related to their recovery activities. Under the
requirements of the Appropriations Act, waivers must be published in
the Federal Register at least 5 days before the effective date of such
waiver.
1. Timeline for the submission of expenditure deadline extension
requests. The Appropriations Act requires the Department to obligate
all funds provided under the Appropriations Act by September 30, 2017,
and requires grantees to expend funds within 24-months of the date on
which the Department obligates funds to a grantee. The Appropriations
Act also authorizes the Office of Management and Budget (OMB) to grant
waivers of the 24-month expenditure deadline.
[[Page 7568]]
OMB authorized the Department to provide CDBG-DR grantees with
expenditure deadline extensions for activities that are inherently
long-term and where it would be impracticable to expend funds within
the 24-month period and still achieve program missions, up to amounts
approved by OMB. In the Federal Register notice published on May 11,
2015, (80 FR 26942), the Department established the process and
criteria for the submission of expenditure deadline extension requests
for CDBG-DR grantees in receipt of funds under the Appropriations Act.
The May 11, 2015, notice requires these grantees to submit requests for
the extension of an expenditure deadline at least 120 calendar days in
advance of the expenditure deadline (80 FR 26944). Since the May 11,
2015, notice was published, the Department subsequently received,
reviewed, and acted upon expenditure deadline extension requests from a
number of CDBG-DR grantees in receipt of funds under the Appropriations
Act. In some instances, the Department observed that events and
circumstances beyond the control of the grantee may require grantees to
request an extension of an expenditure deadline after the 120-calendar-
day deadline has passed. The Department is therefore amending this
requirement of the May 11, 2015, notice to provide that a grantee
``submits the completed CDBG-DR Expenditure Deadline Extension Request
template and any attachments to HUD in order to request consideration
of the extension request at least 120 calendar days in advance of the
expenditure deadline on the funds (or 60 days for funds expiring in
calendar year 2015). HUD may, however, also accept requests from CDBG-
DR grantees for the extension of an expenditure deadline less than 120
calendar days in advance of the deadline upon receipt of a letter from
the chief executive officer of the grantee requesting the extension and
a demonstration by the grantee that the request is required in order to
achieve program missions. Grantees are advised however, that time
constraints may not permit HUD to act upon requests that are received
in close proximity to an expenditure deadline.''
2. Urgent need national objective certification requirements. The
March 5, 2013, notice (78 FR 14329) provided grantees receiving funds
under the Appropriations Act with a waiver of the certification
requirements for the documentation of the urgent need national
objective, located at Sec. Sec. 570.208(c) and 570.483(d), until 2
years after the date the Department obligates funds to a grantee. The
May 11, 2015, notice allowed grantees seeking a waiver of an
expenditure deadline to simultaneously seek an extension of the urgent
need certification waiver. The extension of the urgent need
certification waiver, however, is currently only effective after its
publication in the Federal Register. This approach presents challenges
for CDBG-DR grantees who receive an extension of an expenditure
deadline for an activity associated with the urgent need certification,
with the extended expenditure deadline in effect but with the urgent
need certification waiver still requiring publication in the Federal
Register.
To accommodate the timely expenditure of funds, HUD is modifying
the temporary, streamlined urgent need waiver and alternative
requirement in paragraph VI.A.1.f. of the March 5, 2013, notice (78 FR
14336). This waiver and alternative requirement supersedes the
information published in the May 11, 2015, notice and will allow
grantees to more effectively implement urgent recovery activities by
aligning the applicable urgent need national objective criteria with
the expenditure deadline on the use of funds. The March 5, 2013, notice
is modified to add the following alternative requirement for grantees
that receive an extension of the expenditure deadline: For activities
designed to respond to a disaster-related impact that poses a serious
and immediate threat to the health or welfare of the community, the
grantee may continue to use the urgent need national objective until
the end of the new expenditure deadline if the grantee meets the
following requirements from the March 5, 2013, notice: (1) Before
seeking the expenditure deadline extension, the grantee must reference
in its Action Plan the type, scale, and location of the disaster-
related impacts addressed by each program and/or activity that will
meet the urgent need national objective; (2) before seeking the
expenditure deadline extension, the grantee must identify these
disaster related impacts in its Action Plan needs assessment; (3) the
needs assessment must be updated as new or more detailed/accurate
disaster-related impacts are known; and (4) the grantee must document
how all programs and/or activities funded under the urgent need
national objective respond to a disaster-related impact identified by
the grantee.
3. Alternative requirement to permit extended time for the
provision of interim mortgage assistance (State of New York only). In
the Federal Register notice published on March 5, 2013, the Department
established an alternative requirement to 42 U.S.C. 5305(a)(8) to
extend the authority of grantees under the Appropriations Act to
provide interim mortgage assistance to qualified individuals from 3
months to up to 20 months (78 FR 14345). A grantee using this
alternative requirement is required to document in its policies and
procedures how it will determine the amount of assistance to be
provided is necessary and reasonable. The State of New York has
requested a modification of the 20-month limitation on the provision of
interim mortgage assistance to authorize the assistance for a period of
up to 36 months.
Under the State's existing Interim Mortgage Assistance (IMA)
program, financial assistance is available to eligible applicants to
the NY Rising Housing Recovery Program who demonstrate financial
difficulty in paying their mortgage due to additional housing expenses
incurred as a result of their primary residence no longer being
habitable. Interim mortgage assistance may be provided for past,
current, and future debt obligations of the mortgage, capped at $3,000
per month for a maximum of 20 months or $60,000.
On November 15, 2013, the Department approved Amendment 4 to the
State's disaster recovery Action Plan to allocate $80,000,000 to the
initial State IMA program. On May 27, 2014, the Department approved
Amendment 6 to the State's disaster recovery Action Plan to modify the
calculation of the IMA grant award based on a participant's monthly
mortgage amount for their primary residence and proof of an additional
housing payment. On April 13, 2014, the Department approved Amendment 8
to the State's disaster recovery Action Plan to enable the State to
calculate partial IMA grant awards that reflect rental housing expenses
incurred by participants while displaced, less any rental assistance
received from insurance or government agencies.
At the time the State submitted a request for a modification of the
alternative requirement, 454 program participants were receiving IMA
assistance and approximately 25 percent of those participants were low-
and moderate-income households. In its request for a modification of
the alternative requirement, the State indicated that in the absence of
additional time to provide assistance, 287 IMA recipients would no
longer qualify for IMA funds within the succeeding 12 months and that
26 percent of those recipients were low- and moderate-income
households. In its
[[Page 7569]]
request to provide IMA payments for a period of up to 36 months, the
State cited a number of unanticipated developments that contributed to
delays in the completion of assisted housing projects. Most notably,
the State pointed to the prospect of increased National Flood Insurance
Program (NFIP) claim payments to NY Rising program participants as a
result of fraudulent damage assessments conducted on behalf of the NFIP
in the immediate aftermath of the disaster. The State indicated that
uncertainty surrounding these payments, and the potential impact of the
payments on the amount of CDBG-DR funds ultimately available to the
homeowner, contributed to delays and supports an extended period of
availability for IMA. Other factors cited by the State as contributing
to the need for extended IMA are the limited pool of contractors
experienced in undertaking the elevation of homes and the shorter
Northeastern United States construction season. The State further noted
that its own clarification process, through which applicants may appeal
the ultimate amount of their CDBG-DR award, can also slow progress in
completing repairs and contribute to the need for additional IMA.
The State proposed to implement the extended period for IMA by
initially maintaining the current 20 months of assistance for IMA
participants. At the end of the 20-month period of assistance, the
State may subsequently determine a need for an additional 16 months of
IMA, for a total not to exceed 36 months of assistance. When a need for
an extension of IMA is identified, the State will conduct an inspection
of the property to determine if substantial construction progress has
been made. If substantial construction progress has been made, the
State may provide IMA for the additional authorized period of time, for
a total period of assistance up to 36 months. If the inspection
indicates that substantial progress has not been made, the extension of
IMA will be provided only when the recipient agrees to participate in
the newly established construction program within the NY Rising Housing
Recovery Program. Under the construction program, the State will
contract for and manage, on behalf of the IMA recipient, the
rehabilitation of the IMA recipient's home. Prior to its initial
implementation of the construction program, the State will determine
the need for the IMA extension in those instances where substantial
construction progress has not occurred and will give priority to the
rehabilitation of homes for those IMA recipients receiving a total up
to 36 months of IMA.
After reviewing the State's request, and for the State of New
York's IMA program only, the Department is modifying the provision of
the March 5, 2013, Federal Register notice that limits the provision of
interim mortgage assistance to a period of 20 months and establishing
an alternative requirement that allows for the payment of assistance
for a period of up to 36 months if the State meets the other
requirements described in the above paragraph. The goal of this
alternative requirement is to provide an extended period of IMA in
order to minimize the risk of foreclosure of storm damaged homes while
they are being rehabilitated with CDBG-DR funds and to return IMA
recipients to their rehabilitated homes as quickly as possible. The
State must implement this alternative requirement consistent with the
approach outlined in its request and as described herein. This waiver
and alternative requirement shall remain in effect until December 31,
2017, after which the State shall be authorized to offer interim
mortgage assistance for a period no more than 20 months. Interim
mortgage assistance is an authorized eligible public service activity
and the State is reminded that IMA expenditures are subject to the 15
percent cap on public services established pursuant to 42 U.S.C.
5305(a)(8).
Within 30 days of the effective date of this notice, the State must
begin to implement its construction program for IMA recipients
receiving an extended period of assistance and without substantial
construction progress in the rehabilitation of their home. The State
must have fully implemented the construction program for all IMA
recipients within 6 months of the effective date of this notice. In
addition, the State's policies and procedures must:
(1) Document how the State will determine that ``substantial
progress'' has or has not been made in the rehabilitation of an IMA
recipient's home;
(2) Document how the State will determine that the amount and
period of assistance to be provided under this alternative requirement
is necessary and reasonable;
(3) Document how the State will prioritize the rehabilitation of
homes of IMA recipients receiving a total up to 36 months of IMA;
(4) Include internal controls designed to ensure that IMA provided
to recipients is being used for its authorized purpose; and
(5) Include a plan for assisting recipients that exhaust their IMA
after 36 months but continue to have a need for assistance because the
rehabilitation of their home has not been completed.
III. Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number for the disaster
recovery grants under this notice is 14.269.
IV. Finding of No Significant Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment has been made in accordance with HUD regulations at 24 CFR
part 50, which implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is
available for public inspection between 8 a.m. and 5 p.m. weekdays in
the Regulations Division, Office of General Counsel, Department of
Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, an advance appointment to review the docket file
must be scheduled by calling the Regulations Division at 202-708-3055
(this is not a toll-free number). Hearing- or speech-impaired
individuals may access this number through TTY by calling the Federal
Relay Service at 800-877-8339 (this is a toll-free number).
Dated: February 8, 2016.
Nani A. Coloretti,
Deputy Secretary.
[FR Doc. 2016-02913 Filed 2-11-16; 8:45 am]
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