1. NSP Closeout Efforts Program Income Transfer Notice
Presented By: Lori Serino, Senior CPD Representative
(904)
Community Planning and Development

2. NSP Coordination Team HUD HQ HUD Field Office Advisory Group
Jessie Handforth Kome
Casey Hines (Detroit)
John Laswick
Marilee Hansen (Las Vegas)
Ebony Madyun
Lori Serino (Jacksonville)
Njeri Santana
Brian White (Columbus)
Larry Reyes
Sarah Ciampi (Chicago)
Chin Woo Choi (LA)
TDA
Dionne Roberts
Jennifer Alpha
Ernie Hernandez
Sandy Patel
U.S. Department of Housing and Urban Development • Community Planning and Development

3. Closeout Efforts
Criteria for closeout is NOT the same as criteria for meeting the expenditure deadlines.
No regulatory deadline established for closeout.
Grantees will continue to use program income after closeout.
Life after closeout can be the same as pre- closeout for most grantees, unless using the PI Transfer Option.
Before focusing on closeout, grantees must spend 100% of their grant amount – defined as line of credit funds and program income equal to the amount of their original allocation by the applicable grant year deadline.
In order to close out their grants, however, grantees should exhaust their entire line of credit funds.
More on line of credit funds later.
U.S. Department of Housing and Urban Development • Community Planning and Development

4. Closeout Efforts
Closeout must be completed separately for each NSP grant.
TA is available for closeout preparation.
Some Grantees have completed a readiness check, but are still eligible for TA as we move toward closeout.
U.S. Department of Housing and Urban Development • Community Planning and Development

5. Closeout Efforts There are 634 Grants that need to be closed
61 NSP Grants in Jacksonville Field Office
HUD has set a goal to close 100 grants by September 2016.
To date 34 grants have been closed.
4 Closed in the Jacksonville Field Office
14 processing
U.S. Department of Housing and Urban Development • Community Planning and Development

6. Closeout Efforts
New TA effort launching to assist “ready” grantees with completing closeout packages – 125 grantees have been assigned for assistance
8 in the Jacksonville Office
6 will be assigned in the second round of TA assignments.
You are ready for closeout if…
U.S. Department of Housing and Urban Development • Community Planning and Development

7. Criteria
All activities funded with even a penny of Line of Credit Funds are Complete and have met a National Objective
Grantee has satisfied the LH25 Requirement
All Costs have been incurred
Other regulatory requirements are met
What to do with program income…
U.S. Department of Housing and Urban Development • Community Planning and Development

8. Satisfying the LH25 Requirement
To closeout, grantees must expend an amount equal to 25% of their initial Line of Credit amount to house families at or below 50% AMI
This can be either PI or LOC funds
Grantees have an additional 3 years from the date of closeout to expend an amount equal to 25% of all Program Income earned by the date of closeout
This can be either PI or LOC funds from before closeout
U.S. Department of Housing and Urban Development • Community Planning and Development

9. Satisfying the LH25 Requirement
EXAMPLE
Grant = $2,000,000
PI Earned by Date of Closeout = $100,000
Total 25% Requirement =
$500,000 (grant) $25,000 (PI) = $525,000
This amount must be expended toward 25% Set-Aside Requirement prior to Closeout.
U.S. Department of Housing and Urban Development • Community Planning and Development

10. Satisfying the LH25 Requirement
EXAMPLE (cont.)
$500,000 (grant) $25,000 (PI) = $525,000
Amount expended towards 25% Requirement at Closeout = $510,000
Within 3 years from the date of closeout, grantee must expend an additional $15,000 toward the LH25 Requirement.
U.S. Department of Housing and Urban Development • Community Planning and Development

11. 25% Set-Aside Requirement is Met
This extension does not change the requirements for PI earned post-closeout.
All future program income earned remains subject to the LH25 Requirement; unless PI is transferred to CDBG.
Grantees may expend future PI earnings toward meeting the requirement for program income on hand at the time of closeout.  
Choosing the three year option is like getting an extension on a specific homework assignment. It does not dismiss the obligation to complete future homework assignments.
U.S. Department of Housing and Urban Development • Community Planning and Development

12. Program Income Transfer Notice
U.S. Department of Housing and Urban Development • Community Planning and Development

13. Program Income Transfer Notice
The original closeout notice issued in November (FR–5660–N–01) required that NSP program income must continue to be used for NSP uses following closeout
Exception if the amount received annually after grant closeout totals $25,000 or less.
On June 14, 2016, HUD issued a Notice on changes to program income requirements (FR–5933–N–01) that allows for greater flexibility in how grantees can use program income.
U.S. Department of Housing and Urban Development • Community Planning and Development

14. Program Income Transfer Notice
Background
Due to dwindling NSP funds, administrative burdens for have become evident.
Grantees with large program income balances are having trouble reaching remaining Line of Credit funds, which delays grant closeout significantly.
Some grantees no longer have an adequate pool of NSP-eligible foreclosed or abandoned properties in their target areas but have other CDBG needs.
U.S. Department of Housing and Urban Development • Community Planning and Development

15. Program Income Transfer Notice
New Flexibility
NSP grantees will be able to transfer NSP Program Income before and after closeout to the CDBG program if they meet certain criteria:
Applies only to CDBG grantees (entitlement or state) with an open formula entitlement grant or a unit of general local government (UGLG) recipient of a CDBG grant from a state.
Grantees must meet the NSP 25% Set-aside Requirement for low-income housing.
U.S. Department of Housing and Urban Development • Community Planning and Development

16. Program Income Transfer Notice
Nonprofits and Non-Entitlement Local Governments
The transfer option will not be available for nonprofit and non- entitlement grantees, including those that are part of a consortium.
These entities will continue to follow original closeout requirements:
PI received within 5 years after closeout from projects funded before closeout must be NSP-eligible and meet NSP requirements, but no other federal requirements apply.
With the exception of income earned from the sale of NSP- assisted real property or loans, any income earned by such post- closeout use of funds is miscellaneous revenues not subject to NSP requirements
U.S. Department of Housing and Urban Development • Community Planning and Development

17. Program Income Transfer Notice
Entitlements that are Part of a Consortium
Ability of these grantees to transfer PI will depend on the funding agreement between the lead applicant and the entitlement consortium member
Entitlement is permitted to retain PI under agreement
PI is not needed for Consortium as a whole to meet NSP requirements
If conditions met, entitlement can transfer PI at closeout without Consortium permission, and before closeout with Consortium permission
U.S. Department of Housing and Urban Development • Community Planning and Development

18. Program Income Transfer Notice
Treatment of PI Following Transfer
NSP PI transferred will become CDBG PI upon receipt into IDIS
All funds will be subject to all CDBG PI requirements
CDBG expenditure caps apply (20% admin/15% public service)
Some flexibility for meeting the CDBG 1.5 Timeliness
NSP requirements will no longer apply (e.g. 25% Set- Aside Requirement not applicable; no longer able to serve up to 120% AMI)
U.S. Department of Housing and Urban Development • Community Planning and Development

19. Program Income Transfer Notice
Treatment of PI Remaining in NSP
NSP requirements will continue to apply
Reporting for funds left in DRGR will continue in DRGR (quarterly or annually if closed out)
Transfer of NSP PI receipted in DRGR can continue to be transferred to CDBG with permission from HUD.
U.S. Department of Housing and Urban Development • Community Planning and Development

20. Program Income Transfer Notice
How Do I Process a PI Transfer?
Send a written approval request to field office identifying amounts of unused NSP PI and sources of expected future PI, if future PI will be transferred.
Once approval is received, PI is transferred from DRGR to IDIS
CHANGES NEEDED TO CON PLAN? SUBSTANTIAL AMENDMENT?
U.S. Department of Housing and Urban Development • Community Planning and Development

21. PI Transfer Procedures
STEPS
Program Income Reconciliation
Request Transfer from Field Office
Cancel DRGR PI Receipts
Receipt PI in IDIS
U.S. Department of Housing and Urban Development • Community Planning and Development

22. PI Transfer Procedures
Step 1- Program Income Reconciliation
IMPORTANT: Program income must be reconciled in DRGR before the local HUD Field Office will approve a request to transfer NSP PI to the CDBG program.
Review NSP PI receipts and drawdowns in DRGR using DRGR MicroStrategy Report Fin Rept 07b: Cumulative Data – Activity Level
U.S. Department of Housing and Urban Development • Community Planning and Development

23. PI Transfer Procedures
Step 1- Program Income Reconciliation
Ensure that PI receipts and drawdowns recorded in DRGR reconcile with corresponding internal financial records.
NOTE! Grantees are not required to receipt PI in DRGR that is on-hand but not yet receipted in DRGR if the grantee intends to transfer the un-receipted PI to the CDBG program.
U.S. Department of Housing and Urban Development • Community Planning and Development

24. NSP Closeout Package Assistance
Step 2- Request Transfer from Field Office
IMPORTANT: Grantee will need to submit a written request on the HUD Template that will be provided. Transfers should be completed promptly after approval is received.
U.S. Department of Housing and Urban Development • Community Planning and Development

25. PI Transfer Procedures
Step 2- Request Transfer from Field Office
PI Transfer Request Template will include the following information:
Grant number;
Amount of available NSP program income, including:
The amount of program income receipted and drawn in DRGR and the remaining DRGR program income balance; and
The amount of program income that has not been receipted in DRGR;
U.S. Department of Housing and Urban Development • Community Planning and Development

26. PI Transfer Procedures
Step 2- Request Transfer from Field Office
PI Transfer Request Template includes the following information:
Amount of NSP program income transfer request;
A copy of the NSP program income reconciliation record (e.g. Excel spreadsheet);
A statement that DRGR agrees with the grantee’s internal financial records less any NSP program income on-hand that has yet to be receipted in DRGR; and
U.S. Department of Housing and Urban Development • Community Planning and Development

27. PI Transfer Procedures
Step 2- Request Transfer from Field Office
PI Transfer Request Template includes the following information:
An analysis of the LH25 set-aside and administrative caps to demonstrate compliance with the requirements, including:
A minimum of 25% of program funds and NSP program income must be used to benefit households with incomes of 50% AMI or less; and up to 10% of program funds and NSP PI may be used for admin
Compliance with the LH25 set-aside and administrative cap should be performed AFTER subtracting the NSP PI that is proposed for transfer to the CDBG program.
U.S. Department of Housing and Urban Development • Community Planning and Development

28. PI Transfer Procedures
Step 3- Cancel DRGR PI Receipts
Upon FO approval, the grantee must cancel DRGR program income receipts that will be receipted in IDIS as part of the transfer.
Steps for Transfer Include the Following:
Determine the amount of PI receipts that must be cancelled in DRGR.
Check PI Account Balances to Establish Which Accounts Have Balances that will be Cancelled.
Determine which PI Receipts will be Cancelled.
Cancel PI Receipts.
U.S. Department of Housing and Urban Development • Community Planning and Development

29. PI Transfer Procedures
Step 4- Receipt PI into IDIS
Steps:
Access the Receipt Functions.
Add Receipts.
Add Formula Grant Receipt Screen.
Edit View Receipts.
Edit Receipt Screen.
View Receipt Accounts.
U.S. Department of Housing and Urban Development • Community Planning and Development

30. PI Frequently Asked Questions
U.S. Department of Housing and Urban Development • Community Planning and Development

31. PI Transfer FAQs
HUD published FAQs to guide grantees through the policy considerations and mechanics of completing the transfer in DRGR and IDIS.
Search for FAQs here:
ighborhood-stabilization-program-nsp/
View full list of PI Transfer FAQs here:
U.S. Department of Housing and Urban Development • Community Planning and Development

32. PI Transfer FAQs
Q: Am I required to transfer my NSP program income to my CDBG program, or is it optional? A: No, this is not a requirement. HUD is making transfer option available to NSP grantees as solution to address situations such as where grantees are unable to reach LOC funds because of significant PI balances, no longer have access to NSP-eligible properties, or have excessive CDBG needs. Use of the transfer feature is solely at the discretion of the grantee.
U.S. Department of Housing and Urban Development • Community Planning and Development

33. PI Transfer FAQs
Q: Can I transfer NSP program income to my CDBG Program prior to grant closeout? A: Yes, a NSP grantee may transfer NSP program income to its CDBG program at any time before, during, or after NSP closeout, as described in the Program Income Notice. Note that program income transfers must first be approved by the local HUD field office.
U.S. Department of Housing and Urban Development • Community Planning and Development

34. PI Transfer FAQs
Q: Is there a deadline by which the transfer of funds must occur? A: No. HUD has not issued a deadline by which the transfer of funds must occur. HUD expects that the transfer of unused NSP program income and identification of the program to which future NSP payments will be made will largely be determined prior to NSP grant closeout.
U.S. Department of Housing and Urban Development • Community Planning and Development

35. PI Transfer FAQs
Q: If we transfer some NSP program income to the CDBG program, can we transfer it back to NSP for use on an NSP activity, if needed? A: No. Once a grantee has transferred NSP funds to the CDBG program, transferred NSP program income will become CDBG program income upon receipt in the IDIS subject to all CDBG statutory and regulatory requirements for program income. CDBG funds are not eligible for transfer back to the NSP program.
U.S. Department of Housing and Urban Development • Community Planning and Development

36. PI Transfer FAQs
Q: What are the benefits and disadvantages of transferring my NSP PI? A: Benefits include allowing grantees to reach LOC funds faster and infusing CDBG projects with needed funds, particularly in places where there is not an adequate pool of NSP eligible properties. Disadvantages include the inability to use transferred funds with NSP flexibilities. Additionally, grantees needs to be mindful of the timing of transfers to ensure CDBG requirements are met.
U.S. Department of Housing and Urban Development • Community Planning and Development

37. PI Transfer FAQs
Q: Can an entitlement that is part of a non- entitlement NSP Consortium transfer program income to its CDBG program? A: It depends on the terms of the consortium funding agreement between the lead applicant and the entitlement consortium member.
If the consortium funding agreement allows the entitlement consortium member to retain NSP program income and the funds are not needed to ensure that the consortium as a whole meets NSP2 original requirements (such as the 25% set-aside), the entitlement may: 1) transfer the NSP funds to CDBG at grant closeout without the permission of the lead applicant; or 2) secure the lead applicant’s permission to transfer the NSP program income to CDBG prior to grant closeout. On the other hand, if the consortium funding agreement requires that program income be returned to the non-entitlement lead applicant, the only way NSP program income may be transferred is if the lead entity amends the agreement to give the program income to the entitlement member. In either case, if the transfer is carried out, the lead entity must ensure that DRGR reporting and program records correctly record the change.
U.S. Department of Housing and Urban Development • Community Planning and Development

38. PI Transfer FAQs
Q: Will HUD approval be needed each time NSP program income is receipted in IDIS or will one approval cover all future transfers? A: It depends. The frequency of approval is determined by the scope of the grantee’s request to the Field Office. A grantee may request a one- time transfer of program income on hand. A grantee may also identify and ask for transfer of all expected PI from a particular activity or group of activities (such as a rehab portfolio). The two approaches may also be combined.
Please note that HUD strongly recommends combining the two approaches to include all unused NSP program income on hand plus all future program income from identified sources. Once HUD permission is granted, then the grantee may receipt the amounts identified in accordance HUD’s written permission.
U.S. Department of Housing and Urban Development • Community Planning and Development

39. PI Transfer FAQs
Q: Will the CDBG expenditure caps apply to the NSP program income funds transferred to the CDBG program? 20% for admin, 15% for public service? A: Yes. After transfer, the transferred funds will be CDBG funds in all respects.
U.S. Department of Housing and Urban Development • Community Planning and Development

40. PI Transfer FAQs
Q: When transferring NSP program income to the CDBG program, what CDBG action plan year will it affect? A: CDBG program income will be accounted for in the year that the program income was received into the CDBG program.
U.S. Department of Housing and Urban Development • Community Planning and Development

41. PI Transfer FAQs
Q: Will HUD waive or extend deadlines for meeting the CDBG 1.5 ratio due to an influx of NSP program income transferred into the CDBG program? A: HUD will take into account the timing and amount of program income transfers when evaluating timeliness, but HUD will not allow large balances to remain in the CDBG accounts indefinitely.
U.S. Department of Housing and Urban Development • Community Planning and Development

42. PI Transfer FAQs
Q: Will I have to do a substantial amendment to my Consolidated Plan/Action Plan if I decide to transfer funds? A: This is likely. This will depend on whether your intended use of the PI will change from the use described in your existing NSP1 or 3 substantial amendment or your NSP2 proposal, and whether this change meets the CDBG requirements for a substantial amendment.
The regulations at 24 CFR (c) identify a change in the use of CDBG funds from one eligible activity to another as requiring a substantial amendment.
For example, a small amount of program income transferred from an existing NSP rehab program to an existing CDBG rehab program covering the same geography might not trigger a substantial amendment. Grantees should also review their citizen participation plans. The regulations at 24 CFR (c) and (b) require the citizen participation plan to specify the criteria the jurisdiction will use for determining what changes in the jurisdiction’s planned or actual activities constitute a substantial amendment to the consolidated plan.
U.S. Department of Housing and Urban Development • Community Planning and Development

43. PI Transfer FAQs
Q: Will I have to do a substantial amendment to my NSP Action Plan in DRGR if I decide to transfer funds? A: No, but you must look to the CDBG program to determine whether an amendment will be required to the CDBG Action Plan. This will depend on the scope and nature of the change.
For example, if you dismantle an NSP RLF and direct its unused amounts and anticipated future revenue to the CDBG program, you will have some work to do in DRGR. On the other hand, if you are simply transferring unused NSP program income on hand and any anticipated future NSP revenue to the CDBG program, you should complete any affected activities, then upload to the Action Plan your written permission from HUD and annotate the overall QPR narrative in DRGR..
U.S. Department of Housing and Urban Development • Community Planning and Development

44. Resources
NSP – NSP on the HUD Resource Exchange: – NSP Closeout Guidance: – NSP Webinars- Search here
U.S. Department of Housing and Urban Development • Community Planning and Development

45. More Resources
DRGR – HUD Exchange Frequently Asked Questions (FAQ): – HUD Exchange 2016 DRGR User Manual: IDIS entitlement-communities-training-manual/
U.S. Department of Housing and Urban Development • Community Planning and Development

46. More Resources
Ask-A-Question for NSP, DRGR, and IDIS NSP Questions Mailbox TA Requests
U.S. Department of Housing and Urban Development • Community Planning and Development

47. Reminder August 2, 2016 – NSP Webinar “DRGR Reconciliation”
Grantees that are ready to close, call your HUD Representative
A private address has been established for questions at
Direct TA available to assist in close out efforts.
U.S. Department of Housing and Urban Development • Community Planning and Development

48. U.S. Department of Housing and Urban Development • Community Planning and Development

49. Grant Closeout Process
U.S. Department of Housing and Urban Development • Community Planning and Development

50. Process
Grantee, Field Office or NSP Team begins process. Grantee goes to NSP Guidance on OneCPD
U.S. Department of Housing and Urban Development • Community Planning and Development

51. Process
Grantee makes TA request for Closeout Check in Portal and Upload a draft version of the Final Performance Report.
U.S. Department of Housing and Urban Development • Community Planning and Development

52. Process NSP Team reviews requests and assigns TA
TA Providers contacts Field Office to inform them of the start of the Readiness Check
U.S. Department of Housing and Urban Development • Community Planning and Development

53. Process
TA provider reviews the draft version of the Final Performance Report and other DRGR reports etc.
Confirm all activities appear to be eligible;
Confirm line of credit funds are nearly spent;
Spot checks beneficiary data;
Identify any other points of discussions such as significant program income, land banks, or activities that have not been marked as complete.
U.S. Department of Housing and Urban Development • Community Planning and Development

54. Process
TA provider consults Grantee on program attributes and reviews the Closeout Recommendation Report.
TA provider works with the grantee to evaluate the grantee’s performance against NSP Closeout Checklist.
TA provider walks grantee through Closeout Package and forms
U.S. Department of Housing and Urban Development • Community Planning and Development

55. Process
TA provider completes the Closeout Recommendation form and submits to HUD HQs, the Grantee and the Field Office.
Grantee and Field Office jointly determine Grantee Readiness
Field Office sends Closeout Package to Grantee
U.S. Department of Housing and Urban Development • Community Planning and Development

56. Process Grantee completes package and submits to Field Office
Field Office reviews the closeout package
Field Office executes Closeout Certification and submits a copy to the Grantee
U.S. Department of Housing and Urban Development • Community Planning and Development

57. Process 15. Grantee has 90 days to submit final QPR.
Field Office Reviews and Approved final QPR, if they have not done so already and prepares Closeout Agreement
Field Office and grantee execute the Closeout Agreement and grantee gets a copy
U.S. Department of Housing and Urban Development • Community Planning and Development

58. Process
Field Office sends copy of the Closeout Agreement and the form 7082 to Fort Worth
Field Office completes DRGR Closeout Checklist
Field Office uploads all closeout docs to DRGR
U.S. Department of Housing and Urban Development • Community Planning and Development

59. Process
Field Office notifies the NSP Team that the DRGR Closeout Checklist is complete and all forms uploaded to DRGR
Field Office notifies the NSP Team if the grantee has any PI on hand or will earn any PI in the future
U.S. Department of Housing and Urban Development • Community Planning and Development

60. THE REST OF THE PROCESS IS HANDLED BY HUD HEADQUARTERS
U.S. Department of Housing and Urban Development • Community Planning and Development

61. Forms Links to PDFs, Word and Instructional Videos for the forms*
affordability
*The checklist only has a annotated checklist and no video, and we are still working on the Management Plan Video
U.S. Department of Housing and Urban Development • Community Planning and Development

62. Forms – Attachment A Cover Letter
U.S. Department of Housing and Urban Development • Community Planning and Development

63. Forms – Attachment C Checklist
U.S. Department of Housing and Urban Development • Community Planning and Development

64. Forms – Attachment E Management Plan for Continued Affordability
U.S. Department of Housing and Urban Development • Community Planning and Development

65. Forms – Attachment E Management Plan for Continued Affordability
Grantees can download a report to submit as a substitute for the Management Plan for Continued Affordability
“Support Data for Addresses
U.S. Department of Housing and Urban Development • Community Planning and Development

66. Forms – Land Bank Plan There is no definitive example
The Plan must demonstrate that the Grantee has thought out what they will do with Land Banked property over the next 10 years
U.S. Department of Housing and Urban Development • Community Planning and Development

67. Forms – Attachment B Certification
U.S. Department of Housing and Urban Development • Community Planning and Development

68. Forms – Attachment D Closeout Agreement
U.S. Department of Housing and Urban Development • Community Planning and Development

69. Forms – Attachment D Closeout Agreement
U.S. Department of Housing and Urban Development • Community Planning and Development