Sneak Preview: HUD Allows Program Income Transfers to CDBG

July 7, 2016 | By Jerry Ashworth | Post a Comment

xgran_bookshot(The following was excerpted from a recent article in the Federal Grants Management Handbook.) The Department of Housing and Urban Development (HUD) recently amended its grant closeout policy related to program income earned by recipients of HUD Neighborhood Stabilization Program funding that also are Community Development Block Grant (CDBG) formula grant recipients.

Established under the Housing and Economic Recovery Act of 2008 (Pub. L. 110-289), the Neighborhood Stabilization Program provides federal funds to redevelop neighborhoods negatively affected by properties that have been foreclosed upon and abandoned. In 2010, HUD issued policy establishing the principles, objectives and outcomes for the Neighborhood Stabilization Program. In 2012, it amended the 2010 policy to add grant closeout and other related provisions.

HUD policy previously required that with the exception of de minimis amounts received after grant closeout, program income generated by Neighborhood Stabilization-assisted activities must continue to be used under the Neighborhood Stabilization program. HUD said that Neighborhood Stabilization recipients had voiced that this requirement was often “administratively unworkable.”

In a June 14 Federal Register notice, HUD said that it has updated its policies by allowing Neighborhood Stabilization program income received by a CDBG recipient to be transferred by the recipient from the Neighborhood Stabilization Program to be used for the CDBG program before, during or after grant closeout. Any transferred program income then will be subject to CDBG program income regulations. HUD also is updating its CDBG closeout guidance to include this change in policy.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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