1. HUD CDBG PROGRAM UPDATE NATIONAL COMMUNITY DEVELOPMENT ASSOCIATION
JUNE, 2019

2. Topics FY19 Funding and Policy Updates Regulation Actions
Key Topic Areas
Section 3 Proposed Rule
Consolidated Plan
Section 108 Loan Guarantee Program
Opportunity Zones
Neighborhood Stabilization Program

3. BUDGET/FUNDING: FY 2019 CDBG & SECTION 108:
FY 2019 CDBG enacted appropriation is $3.365 bil , same as FY 2018
-$65 mil for Indian CDBG, -$7 mil for Insular Areas CDBG = $3.293 bil for formula
Section 108 enacted loan guarantee authority is $300 million, same as FY2018
Contains the usual annual prohibitions and limitations on CDBG funding:
no bartering/exchanging funds among local governments
20% planning + general admin costs cap
eminent domain generally prohibited in conjunction with private for profit economic development
mandatory underwriting of assistance to private for-profit businesses

4. BUDGET/FUNDING: FY 2019 CDBG & SECTION 108:
Formula allocations announced April 12
Grantees have 60 days from April 12 to submit their Action Plan/ConPlan. Grantees with PYSD 8/1 -10/1 can submit per normal schedule
1211 Entitlement grantees (+ 2 from 2018)
2019 Formula uses ACS data + 7/1/17 Census population estimates

5. BUDGET/FUNDING: FY 2019 Other programs: HOPWA $393 mil
HOME $1.25 bil, down from $1.362 bil in FY 2018
ESG $280 mil
All other Continuum of Care & homeless demonstration programs $2.356 bil
Section 202 housing for elderly $678 mil including contract renewals
Section 811 housing for disabled $184.1 mil including contract renewals
Housing Counseling program $50 mil
Lead Hazard Reduction programs $279 mil

6. FY 19 POLICY UPDATES
CPD Notice 19-01: Guidance on Submitting Consolidated Plans and Annual Action Plans for Fiscal Year (FY) 2019
CPD Notice 19-02: Low- and Moderate-Income Summary Data Updates –new ACS-based LMISD is effective 4/1/19
CPD Notice 19-04: Urban County Qualification/Requalification for FY
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7. FY 19 POLICY UPDATES Revised IDIS CDBG Matrix Code Definitions Posted
Additional CDBG FAQ Categories Posted
FY 2019 Section 8 Income Limits Posted 4/24
FY 2019 HOME & CDBG Income Limits Posted 6/5, effective 6/28
NSP Closeout Guidance
4/17 FR Notice: Request for Information on how to support Opportunity Zones (comment period now closed)
3 New IDIS On Line training modules on LMA activities
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8. FUTURE CDBG RULE-MAKING
Final Rule on Grant-Based Accounting
CDBG Regulation Reform Proposal
Support Opportunity Zones
Incorporate Consolidated Plan Rule revisions
Incorporate Performance Measurement revisions
Incorporate ideas from Moving CDBG Forward
This is a long term project: Proposed rule > Public comment period > Final rule = months
NSP Federal Register Notice
Section 3 Final Rule
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9. NEW SECTION 3 RULE
Proposed Rule Published in Federal Register on 4/4/19
Comment deadline was 6/3
Would Eventually Replace June 1994 Interim Rule (which remains in effect until a final rule is issued)
Supersedes March 2015 Proposed Section 3 Rule
Different Implementation Approaches for Public Housing vs. Community Planning & Development and other programs
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10. NEW SECTION 3 RULE
Current Rule measures percentage of new hires who are low/very low-income persons. Leads to churning - employers create a series of short-term or P/T jobs to meet §3 numeric hiring goals.
Proposed Rule would measure percentage of labor hours worked by §3 workers & targeted workers - would measure actual sustained employment over time. Correlates with Davis-Bacon reporting.
PHAs would still have option to report new hires.
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11. NEW SECTION 3 RULE
Would apply to an entire project funded in whole/part with $200,000 + from any/all covered HUD programs, or with any Lead Hazard/Healthy Homes funding.
Dollar threshold may be adjusted every 5 years.
Numerical Benchmarks would be updated every 3 years. (Proposed initial benchmarks also published on 4/4/19)
If numerical benchmarks not met, recipients would submit qualitative report on efforts undertaken.
Reporting via programs’ existing systems/timing.
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12. NEW SECTION 3 RULE Targeted Worker Concept & Definitions
Section 3 Worker = low/very low income individual or employee of qualified business
Targeted Section 3 Worker = definition varies by program & statutory language
e.g., residents of the assisted PHA or
Section 8 project, other PHA residents,
§3 business employees, Youthbuild
program participants, low/very low
income employees living in the project’s
service area/immediate neighborhood
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13. Consolidated Plan
>50% of Grantees Due to Submit Next Consolidated Plan in 2020
Issues to Consider:
Broadband
Infrastructure
Opioid Epidemic
Partnerships
Resiliency
Opportunity Zones
AI’s remain on indefinite hold, will not affect 2020 ConPlan submission process

14. FORTHCOMING CDBG GUIDANCE
Webinars on Complying with 20% Planning + Admin cap under Grant Based Accounting
Webinar on Urban County & HOME Consortia Qualification/Requalification
Webinar on Code Enforcement
Guidance on using Consolidated Plan/CDBG/§ 108 to support Opportunity Zones
CPD Notice on using CDBG for Housing (update of 2007 Notice)
Additional modules of IDIS On-Line training
Basically CDBG On-Line training
Webinars + Guidance on Consolidated Plan development/submissions for 2020 – first one is May 1
Local Income Survey development - On-Line Tool
NSP – Guidance on Expending Funds/Transferring Program Income/Closing Out Grants
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15. OTHER RECENT POLICY GUIDANCE
CAPER PR-26 Report Troubleshooting Guide at
Housing Counseling Certification Rule Resources:
Grant Based Accounting Webinar & Materials at:
FAQs on using CDBG funds for broadband:
Returning funds to LoC, local program account, IDIS LA fund, Excess PI:
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16. OTHER RECENT POLICY GUIDANCE
CPD Note: Timely Distribution of State CDBG Funds:
CPD Notice: Supporting Envision Centers in the Con Plan process:
CPD Notice: CDBG Lump Sum Drawdown Requirements:
CPD Notice: Management of CDBG-Assisted Real Property:
CPD Notice: Using CDBG for Individual Development Accounts:
CPD Notice: Using CPD formula funds for Disaster Response & Recovery:
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17. OTHER USEFUL T.A. RESOURCES
14 “Explore CDBG” TA Videos + Project Profiles: products/
IDIS Online Training Modules:
Web-Based Instructional System for Environmental Review (WISER):
§ 108 Project Profiles, Webinars on Underwriting, IDIS reporting, Project Design, Application Process:
Uniform Relocation Act explanatory video:
eConPlan Suite webinars – incorporating HTF; Best Practices:

18. Neighborhood Stabilization Program
Total Investments: $7 billion
Impact: 54,285 housing units
Program Income: $1.83 billion
Remaining Grant Balance: $240 million
Out of 633 grants, 529 remain open

19. NSP Accomplishments

20. NSP Challenges
Programmatic issues remain to be resolved (e.g. unfinished homes, audits)
Some grantees cannot spend their original grant funds because Program Income must be spent first.
Grantees lack eligible units in approved areas of greatest need; target areas are difficult to amend.
Administrative funds are diminished; staff capacity has moved on.
Grantee DRGR skills are low, so budget reconciliations are difficult.
The statute has no deadline for closeout; many grantees have ignored the program.

21. NSP Opportunities & Options
Building Grantee and Staff Capacity
Providing targeted Closeout TA (including personalized service facilitated by TA providers, national mini-clinics with follow up and peer-to-peer learning)
Looking at Policy Fixes & Options
Waiving requirement to spend PI first
Allowing one-time transfers of PI to CDBG. Considering permitting transfers of future income streams.
Investigating a simple and comprehensive way to expand target areas
Reviewing the possibility of grant fund recapture as a last resort
Engaging Our Key Stakeholders
Working with our national housing partners, state and local leaders and City Managers to heighten awareness for innovative ways to use the funds and/or closeout grants