82982 Federal Register / Vol. 88, No. 226 / Monday, November 27, 2023 / Notices 

1Total Unmet Needs for DR 4652 were calculated 

at $16,961,434 before adjusting for the special 

Congressional appropriations for the Hermits Creek/ 

Calf Canyon Fire (the ‘‘Hermit’s Peak/Calf Canyon 

Fire Assistance Act,’’ Public Law 117–180, 136 Stat. 

2114 (2022)). As such, HUD has calculated the 

mitigation for this disaster as 15 percent of those 

total unmet needs. The allocation for unmet needs 

is reduced to $1,587,000 to reflect that the special 

appropriation is anticipated to address many of the 

calculated unmet needs. 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–6428–N–01] 

Allocations for Community 

Development Block Grant Disaster 

Recovery and Implementation of the 

CDBG–DR Consolidated Waivers and 

Alternative Requirements Notice 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, U.S. Department of 

Housing and Urban Development 

(HUD). 

ACTION: Notice. 

SUMMARY: This Allocation 

Announcement Notice allocates $142 

million of CDBG–DR funds appropriated 

by the Disaster Relief Supplemental 

Appropriations Act, 2023 for major 

disasters occurring in 2022 and 2023. 

This notice identifies grant 

requirements for these funds, including 

requirements in HUD’s CDBG–DR 

Consolidated Notice (‘‘Consolidated 

Notice’’) found in appendix B, and a 

limited number of amendments to the 

Consolidated Notice that apply to 

CDBG–DR grants for disasters occurring 

in 2022 and January 2023. The 

Consolidated Notice, as amended by 

this Allocation Announcement Notice, 

includes waivers and alternative 

requirements, relevant regulatory 

requirements, the grant award process, 

criteria for action plan approval, and 

eligible disaster recovery activities. 

DATES: Applicability Date: December 4, 

2023. 

FOR FURTHER INFORMATION CONTACT: 

Tennille Smith Parker, Director, Office 

of Disaster Recovery, Department of 

Housing and Urban Development, 451 

7th Street SW, Room 7282, Washington, 

DC 20410, telephone number 202–708– 

3587 (this is not a toll-free number). 

HUD welcomes and is prepared to 

receive calls from individuals who are 

deaf or hard of hearing, as well as 

individuals with speech or 

communication disabilities. To learn 

more about how to make an accessible 

telephone call, please visit: https://

www.fcc.gov/consumers/guides/ 

telecommunications-relay-service-trs. 

Facsimile inquiries may be sent to Ms. 

Parker at 202–708–0033 (this is not a 

toll-free number). Email inquiries may 

be sent to disaster_recovery@hud.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Allocations 

II. Use of Funds 

A. Allocations of CDBG–DR Funds for 

Smaller Grants 

III. Overview of Grant Process 

A. Requirements Related to Administrative 

Funds 

IV. Applicable Rules, Statutes, Waivers, and 

Alternative Requirements 

A. Grant Administration 

B. Clarifications to the Consolidated Notice 

V. Duration of Funding 

VI. Assistance Listing Numbers (Formerly 

Known as the CFDA Number) 

VII. Finding of No Significant Impact 

Appendix A: Allocation Methodology 

Appendix B: CDBG–DR Consolidated Notice 

I. Allocations 

The Disaster Relief Supplemental 

Appropriations Act, 2023 (Pub. L. 117– 

328, Division N, Title X) approved 

December 29, 2022, makes available 

$3,000,000,000 in CDBG–DR funds. 

These CDBG–DR funds are for necessary 

expenses for activities authorized under 

title I of the Housing and Community 

Development Act of 1974 (42 U.S.C. 

5301 et seq.) (HCDA) related to disaster 

relief, long-term recovery, restoration of 

infrastructure and housing, economic 

revitalization, and mitigation in the 

‘‘most impacted and distressed’’ (MID) 

areas resulting from a qualifying major 

disaster that occurred in 2022 or later 

until such funds are fully allocated. The 

Federal Register notice published on 

May 18, 2023 (88 FR 32046) announced 

$2,837,849,000 from Public Law 117– 

328 to address recovery needs and 

mitigation activities for major disasters 

that occurred in 2022. Based on the 

unmet needs allocation methodology 

outlined in appendix A, this notice 

announces the remaining allocations of 

$142,151,000 from Public Law 117–328 

(the ‘‘Appropriations Act’’) for disasters 

occurring in 2022 and January 2023. 

The Appropriations Act requires HUD 

to include with any final allocation for 

the total estimate of unmet need an 

additional amount of 15 percent of that 

estimate for mitigation activities that 

reduce risk in the MID areas (see table 

1). 

The Appropriations Act provides that 

grants shall be awarded directly to a 

state, local government, or Indian tribe 

at the discretion of the Secretary. 

Pursuant to the Appropriations Act, 

HUD has identified MID areas based on 

the best available data for all eligible 

affected areas. A detailed explanation of 

HUD’s allocation methodology is 

provided in appendix A of this notice. 

All of the grantees within this notice 

must use at least 80 percent of their 

allocations to address unmet disaster 

needs or mitigation activities in the 

HUD-identified MID areas, as identified 

in the last column of table 2. These 

grantees may use the remaining 20 

percent of their allocation to address 

unmet disaster needs or mitigation 

activities in those areas that the grantee 

determines are ‘‘most impacted and 

distressed’’ within an area that received 

a Presidential major disaster declaration 

identified by the Federal Emergency 

Management Agency (FEMA) disaster 

numbers listed in column two of table 

1. However, these grantees are not 

precluded from spending 100 percent of 

their allocation in the HUD-identified 

MID areas if they choose to do so. 

Detailed requirements related to MID 

areas are provided in section II.A.3. of 

the Consolidated Notice. 

Based on a review of the impacts from 

the eligible disasters, and estimates of 

unmet need, HUD made the following 

allocations for disasters occurring in 

2022 and January 2023: 

TABLE 1—ALLOCATIONS FOR UNMET NEEDS AND MITIGATION ACTIVITIES UNDER PUBLIC LAW 117–328 FOR DISASTERS

OCCURRING IN 2022 AND 2023 

Year FEMA 

disaster No. State Grantee 

Allocation for 

unmet needs 

from Public 

Law 117–328 

CDBG–DR 

mitigation setaside amounts 

from Public 

Law 117–328 

Total allocated 

under this 

notice from 

Public Law 

117–328 

2022 ..................... 4652 New Mexico ....................................... State of New Mexico .......................... 1 $1,587,000 $2,544,000 $4,131,000 

2023 ..................... 4684 Alabama ............................................. State of Alabama ............................... 9,046,000 1,357,000 10,403,000 

2023 ..................... 4683 California ............................................ State of California .............................. 100,019,000 15,003,000 115,022,000 

2023 ..................... 4685 Georgia .............................................. State of Georgia ................................. 10,952,000 1,643,000 12,595,000 


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TABLE 1—ALLOCATIONS FOR UNMET NEEDS AND MITIGATION ACTIVITIES UNDER PUBLIC LAW 117–328 FOR DISASTERS

OCCURRING IN 2022 AND 2023—Continued 

Year FEMA 

disaster No. State Grantee 

Allocation for 

unmet needs 

from Public 

Law 117–328 

CDBG–DR 

mitigation setaside amounts 

from Public 

Law 117–328 

Total allocated 

under this 

notice from 

Public Law 

117–328 

Totals ............ .................... ............................................................ ............................................................ 120,017,000 18,003,000 142,151,000 

TABLE 2—MOST IMPACTED AND DISTRESSED AREAS FOR DISASTERS OCCURRING IN 2022 AND 2023 

Grantee 

Minimum amount from Public 

Law 117–328 that must be 

expended in the HUDidentified ‘‘most 

impacted and distressed’’ 

areas in column 3 

‘‘Most impacted and distressed’’ areas 

State of New Mexico ...................................................... $3,304,800 87742 and 87745 (San Miguel County). 

State of Alabama ............................................................ 8,322,400 36703 (Dallas County). 

State of California ........................................................... 92,017,600 Merced, Santa Cruz, San Luis Obispo Counties; 95220 

(San Joaquin County), 93001 (Ventura County). 

State of Georgia ............................................................. 10,076,000 30223 (Spalding County). 

II. Use of Funds 

This Allocation Announcement 

Notice outlines requirements that apply 

to grantees receiving funds under this 

notice. Funds for disasters occurring in 

2022 and 2023 announced in this notice 

are subject to the requirements of this 

Allocation Announcement Notice and 

the Consolidated Notice, included as 

appendix B, as amended. HUD makes 

amendments to the Consolidated Notice 

in this Allocation Announcement 

Notice to reflect the terms of the 

Appropriations Act. However, the 

Consolidated Notice in appendix B is 

the same Consolidated Notice included 

as appendix B in previous Allocation 

Announcements Notices published in 

the Federal Register (87 FR 6364, 87 FR 

31636, 88 FR 3198, and 88 FR 32046). 

Sections III.A.1, III.A.1.a, and III.A.1.b 

of this Allocation Announcement Notice 

include instructions for a grantee 

submitting an early action plan for 

program administrative costs and will 

replace the alternative requirement in 

the Consolidated Notice at III.C.1 for 

purposes of accessing funds for program 

administrative costs prior to the 

Secretary’s certification. 

To comply with the statutory 

requirement in the Appropriations Act, 

grantees shall not use CDBG–DR funds 

for activities reimbursable by or for 

which funds are made available by 

FEMA or the U.S. USACE of Engineers 

(USACE). Grantees must verify whether 

FEMA or USACE funds are available 

prior to awarding CDBG–DR funds to 

specific activities or beneficiaries. 

Grantees may use CDBG–DR funds as 

the non-Federal match as described in 

section II.C.3 of the Consolidated 

Notice. 

II.A. Allocations of CDBG–DR Funds for 

Smaller Grants 

Paragraph III.C.1.b of the 

Consolidated Notice requires that 

CDBG–DR action plans ‘‘demonstrate a 

reasonably proportionate allocation of 

resources relative to areas and categories 

(i.e., housing, economic revitalization, 

and infrastructure) of greatest needs 

identified in the grantee’s impact and 

unmet needs assessment or provide an 

acceptable justification for a 

disproportional allocation.’’ 

Additionally, paragraph III.C.1.g of the 

Consolidated Notice requires grantees to 

‘‘provide a budget for the full amount of 

the allocation that is reasonably 

proportionate to its unmet needs (or 

provide an acceptable justification for 

disproportional allocation) and is 

consistent with the requirements to 

integrate hazard mitigation measures 

into all its programs and projects.’’ 

HUD recognizes that grantees 

receiving a relatively small allocation of 

funds for 2022 and 2023 disasters in this 

notice may most effectively advance 

recovery by more narrowly targeting 

these limited recovery and mitigation 

resources. Accordingly, for grantees 

receiving an allocation of less than $20 

million for 2022 and 2023 disaster(s) 

announced in this notice, HUD will 

consider the small size of the grant and 

HUD’s allocation methodology as 

acceptable justification for a grantee to 

propose a disproportional allocation 

when the grantee is allocating funds to 

address unmet affordable rental housing 

needs caused by or exacerbated by the 

disaster(s). Grantees exercising this 

option must continue to comply with 

the applicable requirements of this 

notice and the Consolidated Notice, 

including the CDBG–DR mitigation setaside requirement in section IV.A.2 of 

this notice. 

III. Overview of Grant Process 

III.A. Requirements Related to 

Administrative Funds 

III.A.1. Action plan submittal for 

program administrative costs. The 

Appropriations Act allows grantees 

receiving an award under this notice to 

access funding for program 

administrative costs prior to the 

Secretary’s certification of financial 

controls and procurement processes, 

and adequate procedures for proper 

grant management. To implement this 

authority, the following alternative 

requirement will replace the alternative 

requirement in the Consolidated Notice 

at III.C.1. 

If a grantee chooses to access funds 

for program administrative costs prior to 

the Secretary’s certification, it must first 

prepare an action plan describing its use 

of funds for program administrative 

costs, subject to the five percent cap on 

the use of grant funds for such costs. 

Instead of following requirements in 

section III.C.1 of the Consolidated 

Notice, which require grantees to use 

the Public Action Plan in HUD’s DRGR 

system to submit their action plans, 

grantees will follow a different process 

to access funds for program 

administrative costs prior to the 

Secretary’s certification. 

As part of the process of accessing 

funds for these costs, grantees must 

submit to HUD an action plan 

describing their use of funds for 

program administrative costs. The 

action plan will be developed outside of 

DRGR and must include all proposed 


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2The Fact Sheet describing the process to submit 

an action plan for program administrative costs in 

DRGR can be viewed at https://files.hudexchange.

info/resources/documents/DRGR-Fact-Sheet-PL117- 

43-Appropriation-Grantees.pdf. 

uses of funds for program administrative 

costs incurred prior to a final action 

plan being submitted and approved. The 

action plan for program administrative 

costs must also include the criteria for 

eligibility and the amount to be 

budgeted for that activity. If a grantee 

chooses to submit the action plan for 

program administrative costs, the 

grantee should calculate its need to 

cover program administrative costs over 

the life of the grant and consider how 

much of its available program 

administrative funds may be reasonably 

budgeted at this very early stage of its 

grant lifecycle. 

III.A.1.a. Publication of the action 

plan for program administrative costs 

and opportunity for public comment. 

The grantee must publish the proposed 

action plan for program administrative 

costs, and substantial amendments to 

the plan, for public comment. To permit 

a more streamlined process and ensure 

that grants for program administrative 

costs are awarded in a timely manner in 

order to allow grantees to more rapidly 

design and launch recovery activities, 

provisions of 42 U.S.C. 5304(a)(2) and 

(3), 42 U.S.C. 12707, 24 CFR 570.486, 24 

CFR 1003.604, 24 CFR 91.105(b) 

through (d), and 24 CFR 91.115(b) 

through (d), with respect to citizen 

participation requirements, are waived 

and replaced by the alternative 

requirements in section III.A.1 that 

apply only to action plans for program 

administrative costs and substantial 

amendments to these plans. 

Additionally, for these action plans 

only, grantees are not subject to the 

Consolidated Notice action plan 

requirements in sections III.B.2.i, III.C.2, 

III.C.3, III.C.6, and III.D.1.a–c. 

The manner of publication of the 

action plan for program administrative 

costs must include prominent posting 

on the grantee’s official disaster 

recovery website and must afford 

residents, affected local governments, 

and other interested parties a reasonable 

opportunity to review the contents of 

the plan or substantial amendment. 

Subsequent to publication of the action 

plan or substantial amendment to that 

plan, the grantee must provide a 

reasonable time frame (no less than 

seven days) and multiple methods 

(including electronic submission) for 

receiving comments on the action plan 

or substantial amendment for program 

administrative costs. At a minimum, the 

topic of disaster recovery on the 

grantee’s website, including the posted 

action plan or substantial amendment, 

must be navigable by interested parties 

from the grantee homepage and must 

link to the disaster recovery website as 

required by section III.D.1.e of the 

Consolidated Notice. The grantee’s 

records must demonstrate that it has 

notified affected parties through 

electronic mailings, press releases, 

statements by public officials, media 

advertisements, public service 

announcements, and/or contacts with 

neighborhood organizations. Grantees 

are not required to hold any public 

hearings on the proposed action plan or 

substantial amendment for program 

administrative costs. 

The grantee must consider all oral and 

written comments on the action plan or 

any substantial amendment. Any 

updates or changes made to the action 

plan in response to public comments 

should be clearly identified in the 

action plan. A summary of comments on 

the plan or amendment, and the 

grantee’s response to each, must be 

included with the action plan or 

substantial amendment. Grantee 

responses shall address the substance of 

the comment rather than merely 

acknowledge that the comment was 

received. 

After the grantee responds to public 

comments, it will then submit its action 

plan or substantial amendment for 

program administrative costs (which 

includes Standard Form 424 (SF–424)) 

to HUD for approval. There is no due 

date for this plan as it may be submitted 

any time prior to the grantee’s Public 

Action Plan. HUD will review the action 

plan or substantial amendment for 

program administrative costs within 15 

days from date of receipt and determine 

whether to approve the action plan or 

substantial amendment to that plan per 

the criteria identified in this notice. 

III.A.1.b. Certifications waiver and 

alternative requirement. Sections 

104(b)(4), (c), and (m) of the HCDA (42 

U.S.C. 5304(b)(4), (c), and (m)), sections 

106(d)(2)(C) and (D) of the HCDA (42 

U.S.C. 5306(d)(2)(C) and (D)), and 

section 106 of the Cranston-Gonzalez 

National Affordable Housing Act (42 

U.S.C. 12706), and regulations at 24 CFR 

91.225 and 91.325 are waived and 

replaced with the following alternative. 

Each grantee choosing to submit an 

action plan for program administrative 

costs must make the following 

certifications listed in section III.F.7 of 

the Consolidated Notice and include 

them with the submission of this plan: 

paragraphs b, c, d, g, i, j, k, l, p, and q. 

Additionally, HUD is waiving section 

104(a)-(c) and (d)(1) of the HCDA (42 

U.S.C. 5304), section 106(c)(1) and (d) of 

the HCDA (42 U.S.C. 5306), section 210 

of the Uniform Relocation Assistance 

and Real Property Acquisition Policies 

Act of 1970 (URA) (42 U.S.C. 4630), 

section 305 of the URA (42 U.S.C. 4655), 

and regulations at 24 CFR 91.225(a)(2), 

(6), and (7), 91.225(b)(7), 91.325(a)(2), 

(6), and (7), 49 CFR 24.4(a), and 24 CFR 

42.325 only to the extent necessary to 

allow grantees to receive a portion of 

their allocation as a grant for program 

administrative costs before submitting 

other statutorily required certifications. 

Each grantee must make all 

certifications included in section III.F.7 

of the Consolidated Notice and submit 

them to HUD when it submits its Public 

Action Plan in DRGR described in 

III.C.1. 

III.A.1.c. Submission of the action 

plan for program administrative costs in 

DRGR. After HUD’s approval of the 

action plan for program administrative 

costs, the grantee enters the activities 

from its approved action plan into the 

DRGR system if it has not previously 

done so and submits its DRGR action 

plan to HUD (funds can be drawn from 

the line of credit only for activities that 

are established in the DRGR system). 

HUD has previously provided 

additional guidance (‘‘Fact Sheet’’) with 

screenshots and step-by-step 

instructions describing the submittal 

process for this DRGR action plan for 

program administrative costs.2 This 

process will allow a grantee to access 

funds for program administrative costs 

while the grantee begins developing its 

Public Action Plan in DRGR as provided 

in section III.C.1 of the Consolidated 

Notice. 

III.A.1.d. Incorporation of the action 

plan for program administrative costs 

into the Public Action Plan. The grantee 

shall describe the use of all grant funds 

for administrative costs in the Public 

Action Plan required by section III.C.1. 

Use of grant funds for administrative 

costs before approval of the Public 

Action Plan must be consistent with the 

action plan for administrative costs. 

Once the Public Action Plan is 

approved, the use of all grant funds 

must be consistent with the Public 

Action Plan. Upon HUD’s approval of 

the Public Action Plan, the action plan 

for administrative costs shall only be 

relevant to administrative costs charged 

to the grant before the date of approval 

of the Public Action Plan. 

III.A.2. Use of administrative funds 

across multiple grants. The 

Appropriations Act authorize special 

treatment of grant administrative funds. 

Grantees that are receiving awards 

under this notice, and that have 

received CDBG–DR or Community 

Development Block Grant mitigation 

(CDBG–MIT) grants in the past or in any 


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future acts, may use eligible 

administrative funds (up to five percent 

of each grant award plus up to five 

percent of program income generated by 

the grant) appropriated by this act for 

the cost of administering any CDBG–DR 

or CDBG–MIT grant without regard to 

the particular disaster appropriation 

from which such funds originated. If the 

grantee chooses to exercise this 

authority, the grantee must have 

appropriate financial controls to comply 

with the requirement that the amount of 

grant administration expenditures for 

each CDBG–DR or CDBG–MIT grant will 

not exceed five percent of the total grant 

award for each grant (plus five percent 

of program income generated by each 

grant), review and modify its financial 

management policies and procedures 

regarding the tracking and accounting of 

administration costs, as necessary, and 

address the adoption of this treatment of 

administrative costs in the applicable 

portions of its Financial Management 

and Grant Compliance submissions as 

referenced in section III.A.1 of the 

Consolidated Notice. Grantees are 

reminded that all uses of funds for 

program administrative activities must 

qualify as an eligible administration 

cost. 

IV. Applicable Rules, 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 the obligation by the 

Secretary, or use by the recipient, of 

these funds, except for requirements 

related to fair housing, 

nondiscrimination, labor standards, and 

the environment. This section of the 

notice and the Consolidated Notice 

describe rules, statutes, waivers, and 

alternative requirements that apply to 

allocations under this notice. For each 

waiver and alternative requirement in 

this notice and incorporated through the 

Consolidated Notice, the Secretary has 

determined that good cause exists, and 

the waiver or alternative requirement is 

not inconsistent with the overall 

purpose of title I of the HCDA. The 

waivers and alternative requirements 

provide flexibility in program design 

and implementation to support full and 

swift recovery following eligible 

disasters, while ensuring that statutory 

requirements are met. 

Grantees may request additional 

waivers and alternative requirements 

from the Department as needed to 

address specific needs related to their 

recovery and mitigation activities. 

Grantees should work with the assigned 

CPD representative to request any 

additional waivers or alternative 

requirements from HUD headquarters. 

The waivers and alternative 

requirements described below apply to 

all grantees under this notice. Under the 

requirements of the Appropriations Act, 

waivers and alternative requirements 

are effective five days after they are 

published in the Federal Register or on 

the website of the Department. 

IV.A. Grant Administration 

IV.A.1. Duplication of Benefits (DOB). 

Grantees that received funds for 

disasters occurring in 2022 and 2023 

must follow the requirements located in 

section IV.A. of the Consolidated Notice 

and the DOB requirements described in 

this section. The Federal Register notice 

published on June 2019, titled ‘‘Updates 

to Duplication of Benefits Requirements 

Under the Stafford Act for Community 

Development Block Grant (CDBG) 

Disaster Recovery Grantees’’ (84 FR 

28836) (‘‘2019 DOB Notice’’), revised 

the DOB requirements that apply to 

CDBG–DR grants for disasters declared 

between January 1, 2016, and December 

31, 2021. For these disasters, the 2019 

DOB Notice also implemented 

temporary changes to the treatment of 

loans made by the Disaster Recovery 

Reform Act of 2018 (DRRA) (division D 

of Pub. L. 115–254), which sunsets on 

October 5, 2023. 

This DRRA loan exception does not 

apply to disasters occurring in 2022 and 

2023, therefore, subsidized loans may be 

a duplication of benefits for CDBG–DR 

grants announced in this notice 

(depending on a grantee’s DOB 

analysis). Without the DRRA loan 

exception, most subsidized loans 

duplicate CDBG–DR funds for the same 

purpose (there are limited exceptions 

for declined, cancelled, or subsidized 

short-term loans to pay for eligible costs 

before CDBG–DR funds became 

available, as described in section IV.A.1. 

of the Consolidated Notice). Therefore, 

HUD’s time-limited policy in the 2019 

DOB Notice to permit reimbursement of 

costs paid with the proceeds of 

subsidized loans does not apply after 

the DRRA loan exception sunsets. 

Additionally, because the DRRA loan 

exception never applied to disasters 

occurring in 2022 or later, grantees 

receiving CDBG–DR funds for those 

disasters are not able to reimburse the 

costs paid by subsidized loans, 

including SBA loans, unless the 

exceptions in section IV.A.1.a. of the 

Consolidated Notice applies. These 

grantees must follow the duplication of 

benefits requirements described below 

and in section IV.A. of the Consolidated 

Notice. 

This section of the notice describes 

the applicable laws and requirements 

related to DOB, including the general 

framework to calculate DOB. Section 

IV.A. of the Consolidated Notice 

describes the exceptions for when a 

subsidized loan that is cancelled or 

declined is not considered a duplication 

of benefits. 

IV.A.1.(a). The Stafford Act. The 

Robert T. Stafford Disaster Relief and 

Emergency Assistance Act (42 U.S.C. 

5121–5207) (Stafford Act) is the primary 

legal authority establishing the 

framework for the Federal government 

to provide disaster and emergency 

assistance. 

Section 312 of the Stafford Act directs 

Federal agencies that provide disaster 

assistance to assure that people, 

businesses, or other entities do not 

receive financial assistance that 

duplicates any part of their disaster loss 

covered by insurance or another source 

(42 U.S.C. 5155(a)). Section 312 also 

makes recipients of Federal disaster 

assistance liable for repayment of the 

amount of Federal disaster assistance 

that duplicates benefits available for the 

same purpose from another source (42 

U.S.C. 5155(c)). 

The Stafford Act also provides that 

when assistance covers only a part of 

the recipient’s disaster needs, additional 

assistance to cover needs not met by 

other sources will not cause a DOB (42 

U.S.C. 5155(b)(3)). CDBG–DR assistance 

may only pay for eligible activities to 

address unmet needs. This section 

advises grantees on the calculation of 

unmet needs through a duplication of 

benefits analysis. 

IV.A.1.(b). CDBG–DR Appropriations 

Act and Federal Register Notices. 

CDBG–DR funds are made available for 

‘‘necessary expenses’’ by the 

Appropriations Act that contain 

statutory requirements on the use of the 

grant funds. Grantees are subject to the 

requirements of the Appropriations Act, 

this notice, and the Consolidated 

Notice. 

Since 2013, as a condition of making 

any CDBG–DR grant, the Secretary must 

certify that the grantee has established 

adequate procedures to prevent DOB. To 

meet this requirement, grantees must 

submit DOB policies to HUD for review 

before HUD will award nonadministrative funds. ‘‘Adequate’’ 

procedures are those that meet the 

requirements that HUD established in 

this notice, in the Consolidated Notice, 

and as reflected in the related checklists 

that are available online. HUD requires 

grantees to establish DOB policies that 

incorporate certain steps before 

committing or awarding assistance. 

Typically, the steps include determining 


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the total need for assistance, verifying 

the total assistance available from all 

sources of disaster assistance (using 

recent data available from FEMA, SBA, 

and other sources), excluding nonduplicative assistance from total 

assistance to calculate DOB, reducing 

the total award by the amount of the 

DOB, and obtaining an agreement from 

applicants to repay duplicative 

assistance. 

This notice and the Consolidated 

Notice also require CDBG–DR grantees 

to consider projected sources of disaster 

assistance in the needs assessment that 

is part of an action plan for disaster 

recovery. Consideration of other 

potential sources of assistance when 

planning for the use of grant funds helps 

to limit the possibility of duplication 

between CDBG–DR and other assistance. 

IV.A.1.(c). Necessary and Reasonable 

Requirements. The Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards in subpart E of 2 CFR 

part 200 (the Cost Principles) applicable 

to all CDBG–DR grantees and their 

subrecipients require that costs are 

necessary and reasonable. The Cost 

Principles are made applicable to states 

by 24 CFR 570.489(p) and to local 

governments through 24 CFR 570.502. 

State grantees are also subject to 24 CFR 

570.489(d), which requires that states 

shall have fiscal and administrative 

requirements to ensure that grant funds 

are used ‘‘for reasonable and necessary 

costs of operating programs.’’ 

Under the Cost Principles, a cost 

assigned to a grant ‘‘is reasonable if, in 

its nature and amount, it does not 

exceed that which would be incurred by 

a prudent person under the 

circumstances prevailing at the time the 

decision was made to incur the cost’’ (2 

CFR 200.404). 

Grantees must consider factors 

described at 2 CFR 200.404(a) through 

(e) when determining which types and 

amounts of cost items are necessary and 

reasonable. Based on these factors, HUD 

generally presumes that if a cost has 

been paid by another source, charging it 

to the Federal award violates the 

necessary and reasonable standard 

unless grant requirements permit 

reimbursement. 

IV.A.1.(d). Basic Duplication of 

Benefits Calculation Framework. The 

Stafford Act requires a fact specific 

inquiry into assistance received by each 

applicant. This notice refers to the 

subject of a DOB review as an 

‘‘applicant’’ or ‘‘CDBG–DR applicant’’ 

and uses the term ‘‘applicant’’ to 

include individuals, businesses, 

households, or other entities that apply 

to the grantee or a subrecipient for 

CDBG–DR assistance, as well as entities 

that use CDBG–DR assistance for an 

activity without submitting an 

application (e.g., the department or 

agency of the grantee administering the 

grant, other state or local departments or 

agencies, or local governments). 

A grantee is prohibited from making 

a blanket determination that CDBG–DR 

assistance under one of its programs or 

activities does not duplicate another 

category or source of assistance. The 

grantee must conduct an individualized 

review of each applicant to determine 

that the amount of assistance will not 

cause a DOB by exceeding the unmet 

needs of that applicant. A review 

specific to each applicant is necessary 

because assistance available to each 

applicant varies widely based on 

individual insurance coverage, 

eligibility for various sources of 

assistance, and other factors. 

This section establishes the primary 

considerations that must be part of a 

DOB analysis when providing CDBG– 

DR assistance, and a framework for 

analyzing need and avoiding DOB when 

calculating awards. CDBG–DR grantees 

have discretion to develop policies and 

procedures that tailor their DOB 

analyses to their own programs and 

activities so long as the grantee’s 

policies and procedures are consistent 

with the requirements of this notice. If 

the grantee modifies its DOB procedures 

after the Secretary certifies that the 

grantee’s DOB procedures are adequate, 

the grantee’s modified procedures must 

meet standards HUD adopts to 

determine adequacy. 

IV.A.1.(d)(i). Assess Applicant Need. 

A grantee must determine an applicant’s 

total need. Total need is calculated 

based on need estimates at a point in 

time; total need is the current need. 

However, if the grantee’s action plan 

permits CDBG–DR assistance to 

reimburse costs of CDBG–DR eligible 

activities undertaken by the applicant 

before submitting an application the 

total need also includes these costs. 

Generally, total need is calculated 

without regard to the grantee’s programspecific caps on the amount of 

assistance. 

For rehabilitation, reconstruction, or 

new construction activities, the need 

can be reasonably documented using 

construction cost estimates. 

For recovery programs of the grantee 

that do not entail physical rebuilding, 

such as special economic development 

activities to provide an affected business 

with working capital, the total need will 

be determined by the requirements or 

parameters of the program or activity. 

For special economic development 

activities, total need should be guided 

by standard underwriting guidelines 

(when required by section II.D.6. of the 

Consolidated Notice, CDBG–DR grantees 

and subrecipients must comply with the 

underwriting guidelines in appendix A 

to 24 CFR part 570 when assisting a forprofit entity as part of a special 

economic development project). 

The grantee’s assessment of total need 

must consider in-kind donations of 

materials or services that are known to 

the grantee at the time it calculates need 

and makes the award. In-kind donations 

are non-cash contributions, such as 

donations of professional services, use 

of construction equipment, or 

contributions of building materials. Inkind donations are not ‘‘financial 

assistance’’ that creates a DOB under the 

Stafford Act, but they do reduce the 

amount of CDBG–DR assistance for 

unmet need because the donated goods 

or services reduce activity costs. 

IV.A.1.(d)(ii). Identify Total 

Assistance. To calculate DOB, grantees 

are required to identify ‘‘total 

assistance.’’ For this notice, total 

assistance includes all reasonably 

identifiable financial assistance 

available to an applicant. 

Total assistance includes resources 

such as cash awards, insurance 

proceeds, grants, and loans received by 

or available to each CDBG–DR 

applicant, including awards under local, 

state, or Federal programs, and from 

private or nonprofit charity 

organizations. At a minimum, the 

grantee’s efforts to identify total 

assistance must include a review to 

determine whether the applicant 

received FEMA, SBA, insurance, and 

any other major forms of assistance (e.g., 

state disaster assistance programs) 

generally available to applicants. 

Total assistance does not include 

personal assets such as money in a 

checking or savings account (excluding 

insurance proceeds or disaster 

assistance deposited into the applicant’s 

account); retirement accounts; credit 

cards and lines of credit; in-kind 

donations (although these non-cash 

contributions known to the grantee 

reduce total need); and private loans. 

For this notice, a private loan is a loan 

that is not provided by or guaranteed by 

a governmental entity, and that requires 

the CDBG–DR applicant (the borrower) 

to repay the full amount of the loan 

(principal and interest) under typical 

commercial lending terms, e.g., the loan 

is not forgivable. For DOB calculations, 

private loans are not financial assistance 

and need not be considered in the DOB 

calculation, regardless of whether the 

borrower is a person or entity. 

By contrast, subsidized loans for the 

same purpose are to be included in the 


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DOB calculation unless an exception 

applies (see sections IV.A.1.a. or 

IV.A.1.b. of the Consolidated Notice). 

Total assistance includes available 

assistance. Assistance is available if an 

applicant: (1) would have received it by 

acting in a reasonable manner, or in 

other words, by taking the same 

practical steps toward funding recovery 

as would disaster survivors faced with 

the same situation but not eligible to 

receive CDBG–DR assistance; or (2) has 

received the assistance and has legal 

control over it. Available assistance 

includes reasonably anticipated 

assistance that has been awarded and 

accepted but has not yet been received. 

For example, if a local government seeks 

CDBG–DR assistance to fund part of a 

project that also has been awarded 

FEMA Hazard Mitigation Grant Program 

(HMGP) assistance, the entire HMGP 

award must be included in the 

calculation of total assistance even if 

FEMA obligates the first award 

increment for the project, but 

subsequent increments remain 

unfunded until certain project 

milestones are met. 

Applicants for CDBG–DR assistance 

are expected to seek insurance or other 

assistance to which they are legally 

entitled under existing policies and 

contracts, and to behave reasonably 

when negotiating payments to which 

they may be entitled. For example, it 

may be reasonable for an applicant to 

elect to receive an immediate lump sum 

insurance settlement based on estimated 

cost of rehabilitation instead of waiting 

for a longer period of time for the 

insurance company to calculate 

reimbursement based on actual 

replacement costs, even if the 

reimbursement based on actual costs 

would exceed the lump sum insurance 

settlement. 

HUD generally considers assistance to 

be available if it is awarded to the 

applicant but is administered by another 

party instead of being directly deposited 

with the applicant. For example, if an 

entity administering homeowner 

rehabilitation assistance pays a 

contractor directly to complete the 

rehabilitation, the assistance is still 

considered available to the applicant. 

By contrast, funds that are not 

available to an applicant must be 

excluded from the final CDBG–DR 

award calculation. For example, 

insurance or rehabilitation assistance 

received by a previous owner of a 

disaster damaged housing unit is not 

available to a current owner that 

acquired the unit by sale or transfer 

(including a current owner that 

inherited the unit as a result of the 

death of the previous owner) unless the 

current owner is a co-recipient of that 

assistance. 

Funds are not available to an 

applicant if the applicant does not have 

legal control of the funds when they are 

received. For example, if a homeowner’s 

mortgage requires insurance proceeds to 

be applied to reduce the unpaid 

mortgage principal, then the lender/ 

mortgage holder (not the homeowner) 

has legal control over those funds. The 

homeowner is legally obligated to use 

insurance proceeds for the purpose of 

reducing the unpaid mortgage principal 

and does not have a choice in using 

them for any other purpose, such as to 

rehabilitate the house. Under these 

circumstances, insurance proceeds do 

not reduce CDBG–DR rehabilitation 

assistance eligibility. 

Alternatively, if a lender requires use 

of insurance for rehabilitation, or a 

disaster-affected homeowner chooses to 

apply insurance proceeds received for 

damage to the building to reduce an 

unpaid mortgage principal, these 

insurance proceeds are treated as a DOB 

and reduce the amount of CDBG–DR 

funds the grantee may provide for 

rehabilitation. 

IV.A.1.(d)(iii). Exclude NonDuplicative Amounts. Once a grantee 

has determined the total need and the 

total assistance, it determines which 

sources it must exclude as nonduplicative for the DOB calculation. 

Grantees must exclude amounts that are: 

(1) provided for a different purpose; or 

(2) provided for the same purpose 

(eligible activity), but for a different, 

allowable use (cost). Below, each of 

these categories is explained in greater 

detail. 

IV.A.1.(d)(iii)(1). Funds for a Different 

Purpose. Any assistance provided for a 

different purpose than the CDBG–DR 

eligible activity, or a general, nonspecific purpose (e.g., ‘‘disaster relief/ 

recovery’’) and not used for the same 

purpose must be excluded from total 

assistance when calculating the amount 

of the DOB. 

Insurance proceeds for damage or 

destruction of a building are for the 

same purpose as CDBG–DR assistance to 

rehabilitate or reconstruct that building. 

On the other hand, grantees may 

exclude, as non-duplicative, insurance 

provided for a different purpose (e.g., 

insurance proceeds for loss of contents 

and personal property, or insurance 

proceeds for loss of buildings (such as 

a detached garage) that the grantee has 

determined it will not assist with 

CDBG–DR funds). However, a grantee 

may treat all insurance proceeds as 

duplicative if it is impractical to 

identify the portion of insurance 

proceeds that are non-duplicative 

because they are for a different purpose 

than the CDBG–DR assistance. 

Similarly, CDBG–DR assistance paid 

to a homeowner as a housing incentive 

for the purpose of inducing the 

homeowner to sell the home to the 

grantee (e.g., in conjunction with a 

buyout) are for a different purpose than 

funds provided for interim housing (e.g., 

temporary assistance for rental housing 

during a period when a household is 

unable to reside in its home). In such a 

case, interim housing assistance may be 

excluded from the final DOB calculation 

as non-duplicative of funds paid for the 

housing incentive. 

IV.A.1.(d)(iii)(2). Funds for Same 

Purpose, Different Allowable Use. 

Assistance provided for the same 

purpose as the CDBG–DR purpose (the 

CDBG–DR eligible activity) must be 

excluded when calculating the amount 

of the DOB if the applicant can 

document that actual specific use of the 

assistance was an allowable use of that 

assistance and was different than the 

use (cost) of the CDBG–DR assistance 

(e.g., the purpose is housing 

rehabilitation, the use of the other 

assistance was roof replacement and the 

use of the CDBG–DR assistance is 

rehabilitation of the interior of the 

house). Grantees are advised to consult 

with HUD to determine what 

documentation is appropriate in this 

circumstance. As a starting point, 

grantees should consider whether the 

source of the assistance requires 

beneficiaries to maintain documentation 

of how the assistance was used. 

Whether the use of the non-CDBG–DR 

assistance is an allowable use depends 

on the rules imposed by the source that 

provided the assistance. For example, 

assume that a CDBG–DR grantee is 

administering a homeowner 

rehabilitation program and an applicant 

to the program can document that he/ 

she previously received and used FEMA 

funds for interim housing costs (i.e., 

rent). If FEMA permitted the applicant 

to use its assistance for the general 

purpose of meeting any housing need, 

the CDBG–DR grantee can exclude the 

FEMA assistance used for interim 

housing as non-duplicative of the 

CDBG–DR assistance for rehabilitation. 

If, on the other hand, FEMA limited 

the use of FEMA funds to housing 

rehabilitation, then the full amount of 

the FEMA assistance must be 

considered for the specific purpose of 

housing rehabilitation and cannot be 

excluded if the applicant used those 

funds for interim housing. If interim 

housing is not an allowable use, the 

amount of the FEMA housing 

rehabilitation assistance used for 

interim housing is considered a DOB. If 


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the grantee thinks the actual use of the 

FEMA assistance may be allowable, the 

CDBG–DR grantee should contact FEMA 

for clarification. 

Assistance provided for the purpose 

of housing rehabilitation, including 

assistance provided for temporary or 

minor rehabilitation, is for the same 

purpose as CDBG–DR rehabilitation 

assistance. However, the grantee can 

exclude assistance used for different 

costs of the rehabilitation, which are a 

different allowable use (rehabilitation 

costs not assisted with CDBG–DR). For 

example, if the other assistance is used 

for minor or temporary rehabilitation 

which enabled the applicant family to 

live in their home instead of moving to 

temporary housing until rehabilitation 

can be completed, the grantee can 

undertake remaining work necessary to 

complete rehabilitation. The grantee’s 

assessment of total need at the time of 

application may include the costs of 

replacing temporary materials with 

permanent construction and of 

completing mold remediation by 

removing drywall installed with other 

assistance. These types of costs to 

modify partially completed 

rehabilitation that the grantee 

determines are necessary to comply 

with the requirements of CDBG–DR 

assistance do not duplicate other 

assistance used for the partial 

rehabilitation. 

Grantees are encouraged to contact 

HUD for further guidance in cases when 

it is unclear whether non-CDBG–DR 

assistance for the same general purpose 

can be excluded from the DOB 

calculation because it was used for a 

different allowable use. 

IV.A.1.(d)(iv). Identify DOB Amount 

and Calculate the Total CDBG–DR 

Award. The total DOB is calculated by 

subtracting non-duplicative exclusions 

from total assistance. Therefore, to 

calculate the total maximum amount of 

the CDBG–DR award, the grantee must: 

(1) identify total need; (2) identify total 

assistance; (3) subtract exclusions from 

total assistance to determine the amount 

of the DOB; and (4) subtract the amount 

of the DOB from the amount of the total 

need to determine the maximum 

amount of the CDBG–DR award. 

Three considerations may change the 

maximum amount of the CDBG–DR 

award. 

First, the grantee may impose a 

program cap that limits the amount of 

assistance an applicant is eligible to 

receive, which may reduce the potential 

CDBG–DR assistance available to the 

applicant. 

Second, the grantee may increase the 

amount of an award if the applicant 

agrees to repay duplicative assistance it 

receives in the future (unless prohibited 

by a statutory order of assistance, as in 

the requirement to use FEMA or USACE 

assistance before CDBG–DR assistance 

discussed in sections II. and. IV.A.1.(f)). 

Section 312(b) of the Stafford Act 

permits a grantee to provide CDBG–DR 

assistance to an applicant who is or may 

be entitled to receive assistance that 

would be duplicative if: (1) the 

applicant has not received the other 

assistance at the time the CDBG–DR 

grantee makes its award; and (2) the 

applicant agrees to repay the CDBG–DR 

grantee for any duplicative assistance 

once it is received. The agreement to 

repay from future funds may enable a 

faster recovery in cases when other 

sources of assistance are delayed (e.g., 

due to insurance litigation). HUD 

requires all grantees to enter into 

agreements with applicants before the 

applicant receives CDBG–DR assistance. 

Third, the applicant’s CDBG–DR 

award may increase if a reassessment 

shows that the applicant has additional 

unmet need. 

IV.A.1.(d)(v). Reassess Unmet Need 

When Necessary. Although long-term 

recovery is a process, disaster recovery 

needs are calculated at points in time. 

As a result, a subsequent change in an 

applicant’s circumstances can affect that 

applicant’s remaining unmet need, 

meaning the need that was not met by 

CDBG–DR and other sources of 

assistance. Oftentimes, unmet need does 

not become apparent until after CDBG– 

DR assistance has been provided. 

Examples may include: a subsequent 

disaster that causes further damage to a 

partially rehabilitated home or business; 

an increase in the cost of construction 

materials; vandalism; contractor fraud; 

or theft of materials. Unmet need may 

also change if other resources become 

available to pay for costs of the activity 

(such as FEMA or USACE), and reduce 

the need for CDBG–DR. 

To the extent that an original disaster 

recovery need was not fully met or was 

exacerbated by factors beyond the 

control of the applicant, the grantee may 

provide additional CDBG–DR funds to 

meet the increased unmet need. 

Grantees must be able to identify and 

document additional unmet need, for 

example, by completing a professional 

inspection to verify the revised estimate 

of costs to rehabilitate or reconstruct 

damaged property. 

IV.A.1.(e). Special Considerations. 

The potential for DOB arises most 

frequently under homeowner 

rehabilitation programs but is not 

limited solely to that type of activity. 

The following examples do not form an 

exhaustive list of all CDBG–DR funded 

programs or activities. They are 

included to illustrate instances when 

duplicative assistance can occur when 

assisting other recovery activities: 

1. Assistance to businesses. Many 

grantees carry out economic 

revitalization programs that provide 

working capital assistance to businesses. 

Generally, working capital assistance is 

calculated after assessing a business’s 

ability to use its current assets to pay its 

current liabilities. The grantee’s DOB 

analysis must consider total assistance, 

which includes all sources of financial 

assistance available to the applicant to 

pay a portion of liabilities that will 

become due. For example, a downtown 

business alliance might award business 

recovery grants from its funds to cover 

some of the same liabilities. Even if the 

downtown business alliance does not 

call its assistance ‘‘working capital’’ 

assistance, the amount the business 

received from the downtown business 

alliance to pay the same costs as the 

CDBG–DR funds is a DOB. Therefore, a 

grantee’s basis for calculating CDBG–DR 

economic development assistance and 

the purposes for which the applicant 

can use the assistance should be clearly 

identified so that grantees can prevent a 

DOB. As discussed above, assets such as 

cash and cash equivalents (excluding 

deposits of insurance proceeds or other 

disaster assistance), inventories, shortterm investments and securities, 

accounts receivable, and other assets of 

the business are not financial assistance, 

although those assets may be relevant to 

underwriting. 

2. Assistance for infrastructure. State 

grantees may assist state or local 

government entities by providing 

funding to restore infrastructure (public 

facilities and improvements) after a 

disaster. CDBG–DR funds used directly 

by state and local governments for 

public facilities and improvements, or 

other purposes are also subject to the 

DOB requirements of the Stafford Act. 

For example, a wastewater treatment 

facility owned by a local government 

may need to be rehabilitated. In this 

instance, total assistance, for a DOB 

analysis, would not only include any 

other Federal assistance available to 

rehabilitate the facility, but it must also 

include any local funds that are 

available for this activity. And if local 

funds were previously designated or 

planned for the activity, but are no 

longer available, the grantee should 

document that the local government 

recipient does not have funds set aside 

for the activity in any capital 

improvement plan (or similar document 

showing planned use of funds). 

3. Payments made under the Uniform 

Relocation Assistance and Real Property 

Acquisition Policies Act (URA). 


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Grantees may provide a displaced 

person (as defined under 24 CFR 

570.606) with rental assistance 

payments under the URA or provide 

temporary relocation assistance (as 

described in 49 CFR part 24, appendix 

A, 49 CFR 24.2(a)(9)(ii)(D)) to persons 

temporary relocated as a result of a 

project. Relocation payments made 

under the URA, as well as under 

CDBG’s optional relocation assistance 

provisions of 24 CFR 570.606(d), are 

subject to DOB requirements in this 

notice and the Consolidated Notice, as 

well as DOB requirements under the 

URA that prohibit payments for the 

same ‘‘purpose and effect’’ as another 

payment to a displaced person (49 CFR 

24.3). To comply with CDBG–DR DOB 

requirements, before issuance of rental 

assistance payments required by the 

URA, grantees must complete a DOB 

analysis. For example, a CDBG–DR 

grantee must check FEMA assistance 

data to determine that FEMA did not 

provide rental assistance payments 

during the same time period (under the 

URA or as part of a FEMA Individual 

Assistance Award). Please note that 

while you cannot duplicate assistance 

for the same purpose, advisory services 

and the provision of notices required 

under the URA are not subject to this 

analysis because they are not financial 

assistance to the person, and therefore 

must be provided in accordance with 

the URA. 

Subsidized Loans. For this notice, 

subsidized loans (including forgivable 

loans) are loans other than private loans. 

Subsidized loans are assistance that 

must be included in the DOB analysis 

unless an exception applies. Section 

IV.A. of the Consolidated Notice 

discusses these exceptions and related 

requirements for the treatment of 

subsidized loans in a duplication of 

benefits analysis. The full amount of a 

subsidized loan available to the 

applicant for the same purpose as 

CDBG–DR assistance is assistance that 

must be included in the DOB 

calculation unless one of the exceptions 

in IV.A.1. of the Consolidated Notice 

applies. A subsidized loan is available 

when it is accepted, meaning that the 

borrower has signed a note or other loan 

document that allows the lender to 

advance loan proceeds. Both SBA and 

FEMA provide subsidized loans for 

disaster recovery. Note that the statutory 

order of assistance provision pertaining 

to assistance from FEMA and USACE 

applies to grants and subsidized loans 

made by these agencies. Subsidized 

loans may also be available from other 

sources. 

IV.A.1.(f). Order of Assistance. CDBG– 

DR appropriations acts generally 

include a statutory order of assistance 

for Federal agencies. Although the 

language may vary among 

appropriations, the statutory order of 

assistance typically provides that 

CDBG–DR funds may not be used for 

activities reimbursable by or for which 

funds are made available by FEMA or 

USACE. This means that grantees must 

verify whether FEMA or USACE funds 

are available for an activity (i.e., the 

application period is open) or the costs 

are reimbursable by FEMA or USACE 

(i.e., the grantee will receive FEMA or 

USACE assistance to reimburse the costs 

of the activity) before awarding CDBG– 

DR assistance for costs of carrying out 

the same activity. If FEMA or USACE 

are accepting applications for the 

activity, the applicant must seek 

assistance from those sources before 

receiving CDBG–DR assistance. If the 

applicant’s costs for the activity will be 

reimbursed by FEMA or USACE, the 

grantee cannot provide the CDBG–DR 

assistance for those costs. In the event 

that FEMA or USACE assistance is 

awarded after CDBG–DR to pay the 

same costs, it is the CDBG–DR grantee’s 

responsibility to recapture CDBG–DR 

assistance that duplicates assistance 

from FEMA or USACE. 

Under the Stafford Act, a Federal 

agency that provides duplicative 

assistance must collect that assistance. 

For CDBG–DR grants, the grantee is 

required to collect duplicative 

assistance it provides. A grantee that 

does not collect duplicative CDBG–DR 

assistance that it provides may resolve 

this noncompliance by reimbursing its 

program account with non-Federal 

funds in the amount of the duplication 

and reprograming the use of the funds 

in accordance with applicable 

requirements to avoid other corrective 

or remedial actions. 

FEMA regulations at 44 CFR 206.191 

set forth a delivery sequence that 

establishes which source of assistance is 

duplicative for certain programs. CDBG– 

DR assistance is not listed in FEMA’s 

sequence, but as a practical matter, 

CDBG–DR assistance duplicates other 

sources received before CDBG–DR 

assistance for the same purpose and 

portion of need. Any amount received 

from other sources before the CDBG–DR 

assistance that is determined to be 

duplicative must be collected by the 

grantee. The mandatory agreement to 

repay (discussed in section 

IV.A.1.(i)below) can be used to prevent 

duplication by assistance that is 

available, but not yet received. If the 

duplicative assistance is received after 

CDBG–DR, the grantee must collect the 

DOB or contact HUD if it has questions 

about whether another Federal agency is 

responsible for collecting the 

duplication. 

IV.A.1.(g). Multiple Disasters. When 

multiple disasters occur in the same 

location, and the applicant has not 

recovered from the first disaster at the 

time of a second disaster, the assistance 

provided in response to the second 

disaster may duplicate assistance for the 

same purpose and need as assistance 

provided after the first disaster. HUD 

recognizes that in this scenario, DOB 

calculations can be complicated. 

Damage from a second disaster, for 

example, may destroy work funded and 

completed in response to the first 

disaster. The second disaster may also 

damage or destroy receipts and other 

documentation of how applicants 

expended assistance provided after the 

first disaster. 

Therefore, HUD is adopting the 

following policy that is applicable to 

circumstances when two disasters occur 

in the same area, and the applicant has 

not fully recovered from the first 

disaster before the second disaster 

occurs: Applicants are not required to 

maintain documentation related to the 

use of public disaster assistance 

(Federal, state, and local) beyond the 

period required by the agency that 

provided the assistance. If 

documentation cannot be provided, the 

grantee may accept a self-certification 

regarding how the applicant used the 

other agency’s assistance, provided that 

the applicant is advised of the criminal 

and civil penalties that apply in cases of 

false claims and fraud, and the grantee 

determines that the applicant’s total 

need is consistent with data the grantee 

has about the nature of damage caused 

by the disasters (e.g., flood inundation 

levels). For example, a second disaster 

strikes three years after an agency 

provided assistance in response to the 

first disaster, and that agency required 

applicants to maintain documentation 

for two years, the grantee may accept a 

self-certification regarding how the 

applicant used the other agency’s 

assistance. 

IV.A.1.(h). Recordkeeping. The 

grantee must document compliance 

with DOB requirements. Policies and 

procedures for DOB may be specific for 

each program funded by the CDBG–DR 

grantee and should be commensurate 

with risk. Grantees should be especially 

careful to sufficiently document the 

DOB analysis for activities they are 

carrying out directly. Insufficient 

documentation on DOB can lead to 

findings, which can be difficult to 

resolve if records are missing, 

inadequate, or inaccurate to 

demonstrate compliance with DOB 

requirements. 


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When documenting its DOB analysis, 

grantees cannot rely on certification 

alone for proof of other sources of funds 

for the same purpose (unless authorized 

by this notice, see section IV.A.1.(g). 

above). Any certification by an 

applicant must be based on supporting 

evidence that will be kept available for 

inspection by HUD. For example, if an 

applicant certifies that other sources of 

funds were received and expended for 

a different purpose than the CDBG–DR 

funds, grantees must substantiate this 

assertion with an additional source of 

information (e.g., physical inspections, 

credit card statements, work estimates, 

contractor invoices, flood inundation 

records, or receipts). For these reasons, 

HUD recommends that as soon as 

possible after a disaster, grantees advise 

the public and potential applicants to 

retain all receipts that document 

expenditures for recovery needs. 

Grantees should consult their CPD 

specialist or CPD representative with 

questions about the sufficiency of 

documentation. 

IV.A.1.(i). Agreement to Repay. The 

Stafford Act requires grantees to ensure 

that applicants agree to repay all 

duplicative assistance to the agency 

providing that Federal assistance. To 

address any potential DOB, each 

applicant must also enter into an 

agreement with the CDBG–DR grantee to 

repay any assistance later received for 

the same purpose for which the CDBG– 

DR funds were provided. This 

agreement can be in the form of a 

subrogation agreement or similar 

document and must be signed by every 

applicant before the grantee disburses 

any CDBG–DR assistance to the 

applicant. 

In its policies and procedures, the 

grantee must establish a method to 

monitor each applicant’s compliance 

with the agreement for a reasonable 

period after project completion (i.e., a 

time period commensurate with risk). 

Additionally, section III.A.1. of the 

Consolidated Notice requires a grantee’s 

agreement to also include the following 

language: ‘‘Warning: Any person who 

knowingly makes a false claim or 

statement to HUD may be subject to 

civil or criminal penalties under 18 

U.S.C. 287, 1001 and 31 U.S.C. 3729.’’ 

IV.A.1.(j). Collecting a Duplication. If 

a potential DOB is discovered after 

CDBG–DR assistance has been provided, 

the grantee must reassess the applicant’s 

need at that time (see section 

IV.A.1.(d)(v) above). If additional need 

is not demonstrated, CDBG–DR funds 

shall be recaptured to the extent they 

are in excess of the remaining need and 

duplicate other assistance received by 

the applicant for the same purpose. 

However, this determination may 

depend on what sources of assistance 

were last received by the applicant. 

If a grantee fails to recapture funds 

from an applicant, HUD may impose 

corrective actions pursuant to 24 CFR 

570.495 and 570.910, and Federal 

Register notices, as applicable. Also, 

HUD reminds grantees that the Stafford 

Act states that ‘‘A person receiving 

Federal assistance for a major disaster or 

emergency shall be liable to the United 

States to the extent that such assistance 

duplicates benefits available to the 

person for the same purpose from 

another source.’’ A grantee’s failure to 

collect duplication of benefits does not 

remove an applicant’s potential liability 

to the United States. A grantee that does 

not collect duplicative CDBG–DR 

assistance that it provides, should 

review HUD’s guidance in the second 

paragraph of section IV.A.1.(f). above. 

The grantee may refer to any relevant 

guidance or the debt collection 

procedures in place for the state or local 

government. HUD is available to 

provide guidance to grantees in 

establishing or revising the grantee’s 

duplication of benefits policies and 

procedures. 

CDBG–DR grantees awarded funds for 

disasters occurring in 2022 or later can 

find the additional DOB requirements in 

Section IV.A. of the Consolidated 

Notice. 

IV.A.2. CDBG–DR mitigation setaside. The Appropriations Act requires 

HUD to include in any allocation of 

CDBG–DR funds for unmet needs an 

additional amount of 15 percent for 

mitigation activities (‘‘CDBG–DR 

mitigation set-aside’’). Grantees should 

consult table 1 for the amount allocated 

specifically for the CDBG–DR mitigation 

set-aside. For purposes of grants under 

this notice, mitigation activities are 

defined as those activities that increase 

resilience to disasters and reduce or 

eliminate the long-term risk of loss of 

life, injury, damage to and loss of 

property, and suffering and hardship, by 

lessening the impact of future disasters. 

In the grantee’s action plan, it must 

identify how the proposed use of the 

CDBG–DR mitigation set-aside will: (1) 

meet the definition of mitigation 

activities; (2) address the current and 

future risks as identified in the grantee’s 

mitigation needs assessment in the MID 

areas; (3) be CDBG-eligible activities 

under title I of the HCDA or otherwise 

eligible pursuant to a waiver or 

alternative requirement; and (4) meet a 

national objective. 

Unlike recovery activities where 

grantees must demonstrate that their 

activities ‘‘tie-back’’ to the specific 

disaster and address a specific unmet 

recovery need for which the CDBG–DR 

funds were appropriated, activities 

funded by the CDBG–DR mitigation setaside do not require such a ‘‘tie-back’’ 

to the specific qualified disaster that has 

served as the basis for the grantee’s 

allocation. Instead, grantees must 

demonstrate that activities funded by 

the CDBG–DR mitigation set-aside meet 

the provisions included as (1) through 

(4) in the prior paragraph, to be eligible. 

Grantees must report activities as a 

‘‘MIT’’ activity type in DRGR so that 

HUD and the public can determine that 

the grantee has fulfilled the requirement 

for the CDBG–DR mitigation set-aside. 

Grantees may also meet the 

requirement of the CDBG–DR mitigation 

set-aside by including eligible recovery 

activities that both address the impacts 

of the disaster (i.e., have ‘‘tie-back’’ to 

the specific qualified disaster) and 

incorporate mitigation measures into the 

recovery activities. In section II.A.2.b of 

the Consolidated Notice, grantees are 

instructed to incorporate mitigation 

measures when carrying out activities to 

construct, reconstruct, or rehabilitate 

residential or non-residential structures 

with CDBG–DR funds as part of 

activities eligible under 42 U.S.C. 

5305(a) (including activities authorized 

by waiver and alternative requirement). 

Additionally, in section II.A.2.c of the 

Consolidated Notice, grantees are 

required to establish resilience 

performance metrics for those activities. 

If grantees wish to count those 

activities towards the grantee’s CDBG– 

DR mitigation set-aside, grantees must: 

(1) Document how those activities and 

the incorporated mitigation measures 

will meet the definition of mitigation, as 

provided above; and (2) Report those 

activities as a ‘‘MIT’’ activity type in 

DRGR so they are easily tracked. 

IV.A.2.a. Mitigation needs 

assessment. In addition to the 

requirements prescribed in section 

III.C.1.a of the Consolidated Notice that 

grantees must develop an impact and 

unmet needs assessment, grantees 

receiving an award under this 

Allocation Announcement Notice must 

also include in their action plan a 

mitigation needs assessment to inform 

the activities funded by the CDBG–DR 

mitigation set-aside. Each grantee must 

assess the characteristics and impacts of 

current and future hazards identified 

through its recovery from the qualified 

disaster and any other Presidentially 

declared disaster. Mitigation solutions 

designed to be resilient only for threats 

and hazards related to a prior disaster 

can leave a community vulnerable to 

negative effects from future extreme 

events related to other threats or 

hazards. When risks are identified 


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among other vulnerabilities during the 

framing and design of mitigation 

projects, implementation of those 

projects can enhance protection and 

save lives, maximize the utility of scarce 

resources, and benefit the community 

long after the projects are complete. 

Accordingly, each grantee receiving a 

CDBG–DR allocation under this notice 

must conduct a risk-based assessment to 

inform the use of its CDBG–DR 

mitigation set-aside considering 

identified current and future hazards. 

Grantees must assess their mitigation 

needs in a manner that effectively 

addresses risks to indispensable services 

that enable continuous operation of 

critical business and government 

functions and are critical to human 

health and safety or economic security. 

In the mitigation needs assessment, each 

grantee must cite data sources and must, 

at a minimum, use the risks identified 

in the current FEMA-approved state or 

local Hazard Mitigation Plan (HMP). If 

a jurisdiction is currently updating an 

expired HMP, the grantee’s agency 

administering the CDBG–DR funds must 

consult with the agency administering 

the HMP update to identify the risks 

that will be included in the assessment. 

Mitigation needs evolve over time and 

grantees are to amend the mitigation 

needs assessment and action plan as 

conditions change, additional mitigation 

needs are identified, and additional 

resources become available. 

IV.A.2.b. Connection of programs and 

projects to the mitigation needs 

assessment. Grantees are required by 

section III.C.1.b of the Consolidated 

Notice to describe the connection 

between identified unmet needs and the 

allocation of CDBG–DR resources. In a 

similar fashion, the plan must provide 

a clear connection between a grantee’s 

mitigation needs assessment and its 

proposed activities in the MID areas 

funded by the CDBG–DR mitigation setaside (or outside in connection to the 

MID areas as described in section II.A.3 

of the Consolidated Notice). To 

maximize the impact of all available 

funds, grantees are encouraged to 

coordinate and align these funds with 

other projects funded with CDBG–DR 

and CDBG–MIT funds, as well as other 

disaster recovery activities funded by 

FEMA, USACE, the U.S. Forest Service, 

and other agencies as appropriate. 

Grantees are encouraged to fund 

planning activities that complement 

FEMA’s Building Resilient 

Infrastructure and Communities (BRIC) 

program and to upgrade mapping, data, 

and other capabilities to better 

understand evolving disaster risks. 

IV.A.3. Interchangeability of disaster 

funds. The Appropriations Act gives the 

Secretary authority to authorize grantees 

that receive an award in this Allocation 

Announcement Notice and under prior 

or future appropriations to use those 

funds interchangeably and without 

limitation for the same activities related 

to unmet recovery needs in the MID 

areas resulting from a major disaster in 

the Appropriations Act or in prior or 

future appropriation acts, when the MID 

areas overlap and when the use of the 

funds will address unmet recovery 

needs of major disasters in the 

Appropriations Act or in any prior or 

future appropriation acts. 

Based on this authority, the Secretary 

authorizes grantees receiving a CDBG– 

DR grant under the Appropriations Act 

and prior or future appropriation acts 

for activities authorized under title I of 

the HCDA for a specific qualifying 

disaster(s) to use these funds 

interchangeably and without limitation 

for the same activities in MID areas 

resulting from a major disaster in prior 

or future appropriation acts, as long as 

the MID areas overlap and the activities 

address unmet needs of both disasters. 

Grantees are reminded that expanding 

the eligible beneficiaries of activities in 

an action plan funded by any prior or 

future acts to include those impacted by 

the specific qualifying disaster(s) in this 

notice requires the submission of a 

substantial action plan amendment in 

accordance with section III.C.6 of the 

Consolidated Notice. Additionally, all 

waivers and alternative requirements 

associated with a CDBG–DR grant apply 

to the use of the funds provided by that 

grant, regardless of which disaster the 

funded activity will address. 

For example, if a grantee is receiving 

funds under this notice for a disaster 

occurring in 2023 and the MID areas for 

the 2023 disaster overlap with the MID 

areas for a disaster that occurred in 

2017, the grantee may choose to use the 

funds allocated under this notice to 

address unmet needs of both the 2017 

disaster and the 2023 disaster. In doing 

so, the grantee must follow the rules and 

requirements outlined in this notice. 

However, if the grantee chooses to use 

its CDBG–DR grant awarded due to a 

disaster that occurred in 2017 to address 

unmet needs of both that disaster and 

the 2023 disaster, the grantee must 

follow the rules and requirements 

outlined in the Federal Register notices 

applicable to its CDBG–DR grant for 

2017 disasters. 

IV.A.4. Assistance to utilities. The 

Appropriations Act provides that funds 

‘‘may be used by a grantee to assist 

utilities as part of a disaster-related 

eligible activity under section 105(a) of 

the Housing and Community 

Development Act of 1974 (42 U.S.C. 

5305(a)).’’ 

Accordingly, paragraph III.G.3 of the 

Consolidated Notice does not apply to 

funds under the Appropriations Act, 

and HUD is adding a modified 

alternative requirement that applies in 

lieu of paragraph III.G.3. 

While it is possible that not every 

CDBG–DR assisted utility will serve 

predominantly low- and moderateincome (LMI) populations, HUD 

recognizes that LMI populations would 

benefit especially from the increased 

resilience and recovery of private 

utilities. HUD also recognizes that 

privately-owned, for-profit utilities have 

a means of obtaining private investment 

or otherwise recapturing costs from 

ratepayers. Therefore, HUD’s alternative 

requirement below includes basic 

safeguards that HUD has determined are 

necessary to ensure that costs comply 

with the certification to give maximum 

feasible priority to activities that benefit 

LMI persons and that costs are 

necessary and reasonable and do not 

duplicate other financial assistance. The 

modified alternative requirement also 

makes clear that assistance to utilities is 

subject to all other requirements that 

apply to the use of funds, consistent 

with the requirement in the 

Appropriations Act that funds must be 

for an ‘‘eligible activity under section 

105(a).’’ If a grantee needs to submit a 

substantial amendment to add any 

activity based on these new alternative 

requirements, they must follow section 

III.C.6.a in the Consolidated Notice. 

For grants made in response to 2022 

and 2023 disasters under the 

Appropriations Act, the following 

alternative requirement applies: 

A grantee may assist private for-profit, 

non-profit, or publicly owned utilities 

as part of disaster-related activities that 

are eligible under section 105(a) of the 

HCDA, or otherwise made eligible 

through a waiver or alternative 

requirement, provided that the grantee 

complies with the following: 

1. The funded activity must comply 

with applicable CDBG–DR 

requirements, including the 

requirements that the assisted activity 

will meet a national objective, the 

activity will address an unmet recovery 

need or a risk identified in the grantee’s 

mitigation needs assessment, and if the 

assistance is provided to a for-profit 

entity for an economic development 

project under section 105(a)(17), the 

grantee must first comply with the 

underwriting requirements in section 

II.D.6 of the Consolidated Notice. 

2. Each grantee must carry out the 

grant consistent with the grantee’s 

certification that: 


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‘‘With respect to activities expected to 

be assisted with CDBG–DR funds, the 

action plan has been developed so as to 

give the maximum feasible priority to 

activities that will benefit low- and 

moderate-income families.’’ 

To fortify compliance with the 

existing certification, if the grantee 

carries out activities that assist 

privately-owned, for-profit utilities, the 

grantee must prioritize assistance to forprofit utilities that will benefit areas 

where at least 51 percent of the 

residents are LMI persons and 

demonstrate how assisting the private, 

for-profit utility will benefit those areas. 

3. The grantee must determine that 

the costs of the activity to assist a utility 

are necessary and reasonable and that 

they do not duplicate other financial 

assistance. To fortify these requirements 

and achieve a targeted use of funds and 

to safeguard against the potential oversubsidization when assistance is used to 

carry out activities that benefit private, 

for-profit utilities, the grantee must 

document that the level of assistance 

provided to a private, for-profit utility 

addresses only the actual identified 

needs of the utility. Additionally, the 

grantee must establish policies and 

procedures to ensure that the CDBG–DR 

funds that assist private, for-profit 

utilities reflect the actual identified 

financing needs of the assisted 

businesses by establishing a mix of 

financing terms (loan, forgivable loan, 

and/or grant) for each assisted private, 

for-profit utility, based on the business’s 

financial capacity, in order to ensure 

that assistance is based on actual 

identified need. 

IV.B. Clarifications to the Consolidated 

Notice 

IV.B.1. Reimbursement Requirements 

for Grants Under the Appropriations 

Act. This section sets out requirements 

for 2022 and 2023 disasters under the 

Appropriations Act. In paragraph III.F.5 

of the Consolidated Notice, HUD 

permits grantees to charge to grants the 

pre-award and pre-application costs of 

homeowners, renters, businesses, and 

other qualifying entities for eligible 

costs these applicants have incurred in 

response to an eligible disaster covered 

under a grantee’s applicable Allocation 

Announcement Notice. In addition to 

other requirements, paragraph III.F.5 

stipulates that grantees may charge the 

eligible pre-application costs to the 

grant only if (1) the person or private 

entity incurred the expenses within one 

year after the applicability date of the 

grantee’s Allocation Announcement 

Notice (or within one year after the date 

of the disaster, whichever is later); and 

(2) the person or entity pays for the cost 

before the date on which the person or 

entity applies for CDBG–DR assistance. 

Congress may enact multiple 

supplemental appropriations of CDBG– 

DR funds for disasters occurring in the 

same year and HUD may then publish 

multiple notices announcing CDBG–DR 

grants for the same disaster. For 

example, HUD announced CDBG–DR 

grants for disasters occurring in 2022 

and 2023 in this notice. If Congress 

appropriates additional funds for 2022 

and 2023 disasters in a future 

appropriations act, grantees may find it 

difficult to track expenses incurred 

within one year after the applicability 

date of this notice and another 

Allocation Announcement Notice, given 

that funds for disasters occurring in 

2022 and 2023 would be announced in 

different notices. To avoid confusion 

and to apply a uniform time frame to 

reimbursement of all pre-application 

costs for 2022 and 2023 disasters, the 

requirement in III.F.5.(1) in the 

Consolidated Notice that states, ‘‘The 

person or private entity incurred the 

expenses within one year after the 

applicability date of the grantee’s 

Allocation Announcement Notice (or 

within one year after the date of the 

disaster, whichever is later)’’ shall not 

apply, and instead, grantees shall 

comply with the following alternative to 

that requirement in III.F.5.(1): ‘‘The 

person or private entity incurred the 

expenses within one year after the 

applicability date of the notice that 

announced the initial allocation of 

CDBG–DR funds (or within one year 

after the date of the disaster, whichever 

is later).’’ For grantees receiving an 

allocation for a 2022 and 2023 disaster, 

the notice that announced the initial 

allocation of CDBG–DR funds is this 

notice. 

IV.B.2. Clarification of the green and 

resilient building standard. Paragraph 

II.B.2.a. of the Consolidated Notice 

requires that all covered construction 

(new construction, reconstruction, and 

rehabilitation) that is assisted with 

CDBG–DR funds meet an industryrecognized standard that has achieved 

certain certifications described in the 

notice. In the Consolidated Notice, HUD 

updated its building standards to 

support the adoption and enforcement 

of modern and resilient codes and 

inadvertently omitted a standard. 

Accordingly, HUD clarifies that 

paragraph II.B.2.a. in the Consolidated 

Notice allows a grantee to use either the 

ICC–700 National Green Building 

Standard (NGBS) Green or NGBS 

Green+ Resilience standard, among 

other industry-recognized standards. 

For grants made in response to disasters 

occurring in 2022 and 2023, this notice 

replaces paragraph II.B.2.a. in the 

Consolidated Notice with the following 

text: 

II.B.2.a. Green and resilient building 

standard for new construction and 

reconstruction of housing. Grantees 

must meet the Green and Resilient 

Building Standard, as defined in this 

subparagraph, for: (i) all new 

construction and reconstruction (i.e., 

demolishing a housing unit and 

rebuilding it on the same lot in 

substantially the same manner) of 

residential buildings and (ii) all 

rehabilitation activities of substantially 

damaged residential buildings, 

including changes to structural elements 

such as flooring systems, columns, or 

load-bearing interior or exterior walls. 

The Green and Resilient Building 

Standard requires that all construction 

covered by the paragraph above and 

assisted with CDBG–DR funds meet an 

industry-recognized standard that has 

achieved certification under (i) 

Enterprise Green Communities; (ii) 

LEED (New Construction, Homes, 

Midrise, Existing Buildings Operations 

and Maintenance, or Neighborhood 

Development); (iii) ICC–700 National 

Green Building Standard (NGBS) Green 

or NGBS Green+ Resilience; (iv) Living 

Building Challenge; or (v) any other 

equivalent comprehensive green 

building program acceptable to HUD. 

IV.B.3. Clarification of the Use of 

‘‘Uncapped’’ Income Limits. The 

Quality Housing and Work 

Responsibility Act of 1998 (Title V of 

Pub. L. 105–276) enacted a provision 

that directs the Department to grant 

exceptions to at least 10 jurisdictions 

that are currently ‘‘capped’ under HUD’s 

low and moderate-income limits. Under 

this exception, several CDBG 

entitlement grantees may use 

‘‘uncapped’’ income limits that reflect 

80 percent of the actual median income 

for the area. Each year, HUD publishes 

guidance on its website identifying 

which grantees may use uncapped 

limits. 

Accordingly, HUD clarifies that, the 

annual uncapped income limits 

published by HUD applies to CDBG–DR 

funded activities in jurisdictions 

covered by the uncapped limits, 

including jurisdictions that receive 

disaster recovery funds from a state 

CDBG–DR grantee. This alternative 

requirement applies to grants made in 

response to disasters occurring in 2022 

and 2023 that are subject to this notice 

(including requirements identified as a 

‘‘Consolidated Notice’’ incorporated in 

this notice as appendix B). 


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V. Duration of Funding 

The Appropriations Act made the 

funds available for obligation by HUD 

until expended. HUD waives the 

provisions at 24 CFR 570.494 and 

570.902 regarding timely distribution 

and expenditure of funds and 

establishes an alternative requirement 

providing that each grantee must 

expend 100 percent of its allocation 

within six years of the date HUD signs 

the grant agreement. HUD may extend 

the time period in this alternative 

requirement and associated grant period 

of performance administratively, if good 

cause for such an extension exists at 

that time, as requested by the grantee, 

and approved by HUD. When the period 

of performance has ended, HUD will 

close out the grant and any remaining 

funds not expended by the grantee on 

appropriate programmatic purposes will 

be recaptured by HUD. 

VI. Assistance Listing Numbers 

(Formerly Known as the CFDA 

Number). 

The Assistance Listing Numbers 

(formerly known as the Catalog of 

Federal Domestic Assistance numbers) 

for the disaster recovery grants under 

this notice are as follows: 14.218; 

14.228. 

VII. 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 

online on HUD’s CDBG–DR website at 

https://www.hud.gov/program_offices/ 

comm_planning/cdbg-dr. 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). HUD 

welcomes and is prepared to receive 

calls from individuals who are deaf or 

hard of hearing, as well as individuals 

with speech or communication 

disabilities. To learn more about how to 

make an accessible telephone call, 

please visit https://www.fcc.gov/ 

consumers/guides/telecommunicationsrelay-service-trs. 

Adrianne Todman, 

Deputy Secretary. 

Appendix A 

Allocation of CDBG–DR Funds to Most 

Impacted and Distressed Areas Due to 

Presidentially Declared Disasters Occurring 

in 2022 and 2023 

Background 

The Disaster Relief Supplemental 

Appropriations Act, 2023 (Pub. L. 117–328, 

Division N, Title X) (approved on December 

29, 2022) appropriated $3 billion of CDBG– 

DR for disasters ‘‘that occurred in 2022 or 

later until such funds are fully allocated’’. 

The law instruct HUD that the funds are ‘‘for 

the same purposes and under the same terms 

and conditions as funds appropriated under 

such heading in title VIII of the Disaster 

Relief Supplemental Appropriations Act, 

2022 (division B of Pub. L. 117–43)’’ except 

that such amounts shall be for major disasters 

that occurred in 2022 or later until such 

funds are fully allocated and the fourth, 

twentieth, and twenty-first provisos under 

such heading in the Disaster Relief 

Supplemental Appropriations Act, 2022 shall 

not apply. 

The statutory text related to the allocation 

in Public Law 117–43 is as follows: 

‘‘. . . for necessary expenses for activities 

authorized under title I of the Housing and 

Community Development Act of 1974 (42 

U.S.C. 5301 et seq.) related to disaster relief, 

long-term recovery, restoration of 

infrastructure and housing, economic 

revitalization, and mitigation, in the most 

impacted and distressed areas resulting from 

a major disaster . . . Provided, That amounts 

made available under this heading in this Act 

shall be awarded directly to the State, unit 

of general local government, or Indian tribe 

(as such term is defined in section 102 of the 

Housing and Community Development Act of 

1974 (42 U.S.C. 5302)) at the discretion of the 

Secretary: Provided further, That the 

Secretary shall allocate, using the best 

available data, an amount equal to the total 

estimate for unmet needs for qualifying 

disasters under this heading in this Act: 

Provided further, That any final allocation for 

the total estimate for unmet need made 

available under the preceding proviso shall 

include an additional amount of 15 percent 

of such estimate for additional mitigation: ’’ 

Under a prior Notice, $2,837,849,000 of the 

funds allocated under Public Law 117–328 

had been awarded. Of the remaining 

$162,151,000, $20 million is set aside for 

capacity building, HUD Administration, and 

Inspector General expenses, leaving 

$142,151,000 for allocations to additional 

disasters. Total unmet needs and mitigation 

needs for one disaster in 2022 (New Mexico) 

is calculated as discussed in a special section 

below at $4.131 million. In addition, for three 

disasters (California, Alabama, and 

Georgia)—all declared in January 2023— 

unmet needs and additional mitigation 

amounts were calculated at $241.728 million. 

HUD chose to allocate 57.10 percent of the 

unmet needs and additional mitigation 

amounts of each 2023 disaster to stay within 

the $138.020 million available after taking 

into account the $4.131 million for the 2022 

New Mexico disaster ($138.020 million/ 

$241.728 million = 57.10%). 

Most Impacted and Distressed Areas 

As with prior CDBG–DR appropriations, 

HUD is not obligated to allocate funds for all 

major disasters occurring in the statutory 

timeframes. HUD is directed to use the funds 

‘‘in the most impacted and distressed areas.’’ 

HUD has implemented this directive by 

limiting CDBG–DR formula allocations to 

grantees with major disasters that meet these 

standards: 

(1) Individual and Households Program 

(IHP) designation. HUD has limited 

allocations to those disasters where the 

Federal Emergency Management Agency 

(FEMA) had determined the damage was 

sufficient to declare the disaster as eligible to 

receive IHP funding. 

(2) Concentrated damage. HUD has limited 

its estimate of serious unmet housing need to 

counties and/or counties with zip codes with 

high levels of damage, collectively referred to 

as ‘‘most impacted areas.’’ For this allocation, 

HUD is defining most impacted areas as 

either most impacted counties—counties 

exceeding $10 million in serious unmet 

housing needs—and most impacted Zip 

Codes—Zip Codes with $2 million or more 

of serious unmet housing needs. The 

calculation of serious unmet housing needs 

is described below. 

For disasters that meet the most impacted 

threshold described above, the unmet need 

allocations are based on the following factors 

summed together: 

(1) Repair estimates for seriously damaged 

owner-occupied units without insurance 

(with some exceptions) in most impacted 

areas after FEMA and Small Business 

Administration (SBA) repair grants or loans; 

(2) Repair estimates for seriously damaged 

rental units occupied by very low-income 

renters in most impacted areas; 

(3) Repair and content loss estimates for 

small businesses with serious damage denied 

by SBA; and 

(4) The estimated local cost share for 

Public Assistance Category C to G projects. 

Methods for Estimating Serious Unmet 

Needs for Housing 

The data HUD uses to calculate unmet 

needs for qualifying disasters declared 

between November 1, 2022 and January 30, 

2023 come from the FEMA IHP data on 

housing-unit damage as of April 6, 2023 and 

reflect disasters occurring in 2022 and/or 

2023 and declared after October 30, 2022 and 

before January 30, 2023. The New Mexico 

(DR 4652) estimates uses the same data as 

discussed in the prior Federal Register 

Notice for 2022 disasters (88 FR 32046). 

The core data on housing damage for both 

the unmet housing needs calculation and the 

concentrated damage are based on home 

inspection data for FEMA’s IHP and SBA’s 

disaster loan program. HUD calculates 

‘‘unmet housing needs’’ as the number of 

housing units with unmet needs times the 

estimated cost to repair those units less 

repair funds estimated to be provided by 

FEMA and SBA. 


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Each of the FEMA IHP inspected owner 

units are categorized by HUD into one of five 

categories: 

• Minor-Low: Less than $3,000 of FEMA 

inspected real property damage. 

• Minor-High: $3,000 to $7,999 of FEMA 

inspected real property damage. 

• Major-Low: $8,000 to $14,999 of FEMA 

inspected real property damage and/or 1 to 

3.9 feet of flooding on the first floor. 

• Major-High: $15,000 to $28,800 of FEMA 

inspected real property damage and/or 4 to 

5.9 feet of flooding on the first floor. 

• Severe: Greater than $28,800 of FEMA 

inspected real property damage or 

determined destroyed and/or six or more feet 

of flooding on the first floor. 

When owner-occupied properties also have 

a personal property inspection or only have 

a personal property inspection, HUD reviews 

the personal property damage amounts such 

that if the personal property damage places 

the home into a higher need category over the 

real property assessment, the personal 

property amount is used. The personal 

property-based need categories for owneroccupied units are defined as follows: 

• Minor-Low: Less than $2,500 of FEMA 

inspected personal property damage. 

• Minor-High: $2,500 to $3,499 of FEMA 

inspected personal property damage. 

• Major-Low: $3,500 to $4,999 of FEMA 

inspected personal property damage or 1 to 

3.9 feet of flooding on the first floor. 

• Major-High: $5,000 to $9,000 of FEMA 

inspected personal property damage or 4 to 

5.9 feet of flooding on the first floor. 

• Severe: Greater than $9,000 of FEMA 

inspected personal property damage or 

determined destroyed and/or 6 or more feet 

of flooding on the first floor. 

To meet the statutory requirement of ‘‘most 

impacted’’ in this legislative language, homes 

are determined to have a high level of 

damage if they have damage of ‘‘major-low’’ 

or higher. That is, they have a FEMA 

inspected real property damage of $8,000 or 

above, personal property damage $3,500 or 

above, or flooding 1 foot or above on the first 

floor. 

Furthermore, a homeowner with flooding 

outside the one percent risk flood hazard area 

is determined to have unmet needs if they 

reported damage and no flood insurance to 

cover that damage. For homeowners inside 

the one percent risk flood hazard area, 

homeowners without flood insurance with 

flood damage below the greater of national 

median or 120 percent of Area Median 

Income are determined to have unmet needs. 

For non-flood damage, homeowners without 

hazard insurance with incomes below the 

greater of national median or 120 percent of 

Area Median Income are included as having 

unmet needs. The unmet need categories for 

these types of homeowners are defined as 

above for real and personal property damage. 

FEMA IHP does not inspect rental units for 

real property damage so personal property 

damage is used as a proxy for unit damage. 

Each of the FEMA-inspected renter units are 

categorized by HUD into one of five 

categories: 

• Minor-Low: Less than $1,000 of FEMA 

inspected personal property damage. 

• Minor-High: $1,000 to $1,999 of FEMA 

inspected personal property damage or 

determination of ‘‘Moderate’’ damage by the 

FEMA inspector. 

• Major-Low: $2,000 to $3,499 of FEMA 

inspected personal property damage or 1 to 

3.9 feet of flooding on the first floor or 

determination of ‘‘Major’’ damage by the 

FEMA inspector. 

• Major-High: $3,500 to $7,500 of FEMA 

inspected personal property damage or 4 to 

5.9 feet of flooding on the first floor. 

• Severe: Greater than $7,500 of FEMA 

inspected personal property damage or 

determined destroyed and/or 6 or more feet 

of flooding on the first floor or determination 

of ‘‘Destroyed’’ by the FEMA inspector. 

To meet the statutory requirement of ‘‘most 

impacted’’ for rental properties, homes are 

determined to have a high level of damage if 

they have damage of ‘‘major-low’’ or higher. 

That is, they have a FEMA personal property 

damage assessment of $2,000 or greater or 

flooding 1 foot or above on the first floor. 

Furthermore, landlords are presumed to 

have adequate insurance coverage unless the 

unit is occupied by a renter with income less 

than the greater of the Federal poverty level 

or 50 percent of the area median income. 

Units occupied by a tenant with income less 

than the greater of the poverty level or 50 

percent of the area median income are used 

to calculate likely unmet needs for affordable 

rental housing. 

The average cost to fully repair a home for 

a specific disaster to code within each of the 

damage categories noted above is calculated 

using the median real property damage repair 

costs determined by the SBA for its disaster 

loan program based on a match comparing 

FEMA and SBA inspections by each of the 

FEMA damage categories described above. 

If there is a match of 20 or more SBA 

inspections to FEMA inspections for any 

damage category, the median damage 

estimate for the SBA properties is used less 

the estimated average FEMA IHP repair grant 

and average SBA disaster loan grant weighted 

on take-up rates, which are generally high for 

IHP and low and for SBA. Except that no 

matched multiplier can be less than the 25th 

percentile for all IHP eligible disasters 

combined in eligible disaster years at the 

time of the allocation calculation or more 

than the 75th percentile for all IHP eligible 

disasters combined with data available as of 

the allocation. 

If there is a match of fewer than 20 SBA 

inspections to FEMA inspections within 

individual damage categories, these 

multipliers are used which are based on the 

2020 and 2021 disaster years: 

Disaster type 

Multipliers by disaster type 

Major-low Major-high Severe 

Dam/Levee Break .............................................................................................................................................. $33,007 $47,078 $47,078 

Earthquake ......................................................................................................................................................... 27,141 33,714 134,503 

Fire ..................................................................................................................................................................... 22,971 82,582 134,503 

Flood .................................................................................................................................................................. 47,074 57,856 64,513 

Hurricane ........................................................................................................................................................... 36,800 45,952 45,952 

Severe Ice Storm ............................................................................................................................................... 33,528 33,714 36,592 

Severe Storm(s) ................................................................................................................................................. 22,971 37,299 37,299 

Tornado .............................................................................................................................................................. 52,961 82,582 134,503 

A separate multiplier is applied to mobile 

homes for all disaster types. Where there are 

fewer than 20 mobile homes for a match for 

a disaster, the mobile home multipliers are 

$49,571 for major-low, $60,189 for majorhigh, and $67,594 for severe. If there are 20 

or more matches for a specific disaster’s 

mobile homes, that specific disaster 

multiplier is used. 

Methods for Estimating Serious Unmet 

Economic Revitalization Needs 

Based on SBA disaster loans to businesses 

using data from as of April 5, 2023, HUD 

calculates the median real estate and content 

loss by the following damage categories for 

each disaster: 

• Category 1: real estate + content loss = 

below $12,000 

• Category 2: real estate + content loss = 

$12,000–$29,999 

• Category 3: real estate + content loss = 

$30,000–$64,999 

• Category 4: real estate + content loss = 

$65,000–$149,999 

• Category 5: real estate + content loss = 

$150,000 and above 

For properties with real estate and content 

loss of $30,000 or more, HUD calculates the 

estimated amount of unmet needs for small 

businesses by multiplying the median 

damage estimates for the categories above by 

the number of small businesses denied an 

SBA loan, including those denied a loan 

prior to inspection due to inadequate credit 

or income (or a decision had not been made), 

under the assumption that damage among 

those denied at pre-inspection have the same 

distribution of damage as those denied after 

inspection. 


khammond on DSKJM1Z7X2PROD with NOTICES2
Federal Register / Vol. 88, No. 226 / Monday, November 27, 2023 / Notices 82995 

3Correction. In the Federal Register notice 

published on Thursday, May 18, 2023, at 88 FR 

32046, HUD makes the following correction: On 

page 32059, in the Sub-Disaster Allocations for 

Local Governments section of appendix A, for DR 

4673 FL the unmet need value reads as ‘‘$100 

million’’ but should read as ‘‘$125 million.’’ 

4https://www.fema.gov/disaster/current/hermitspeak/frequently-asked-questions#:∼:text=

An%20additional%20

%241.45%20billion%20was,business 

%20loss%20or%20financial%20loss. 

Methods for Estimating Unmet 

Infrastructure Needs 

To calculate unmet needs for infrastructure 

projects, HUD received FEMA cost estimates 

on April 6, 2023, of the expected local cost 

share to repair the permanent public 

infrastructure (Categories C to G) to their prestorm condition. 

Allocation Calculation 

Once eligible entities are identified using 

the above criteria, the allocation to 

individual grantees represents their 

proportional share of the estimated unmet 

needs. For the formula allocation, HUD 

calculates total unmet recovery needs for 

eligible disasters as the aggregate of: 

• Serious unmet housing needs in most 

impacted and distressed areas; 

• Serious unmet business needs; and 

• Unmet infrastructure need. 

Mitigation is calculated as 15 percent of 

the unmet need calculation, and then 

rounded to the nearest $1,000.3

Adjustments for 2022 Disaster—DR 4652 

(New Mexico) 

When HUD made its March 2023 

announcement for 2022 disasters, we had not 

made an allocation for the 2022 wildfires in 

New Mexico (DR 4652) because of separate 

appropriations ($3.95 billion appropriated in 

the ‘‘Continuing Appropriations Act, 2023,’’ 

Public Law 117–180, 136 Stat. 2114 (2022), 

and the ‘‘Disaster Relief Supplemental 

Appropriations Act, 2023’’ Public Law 117– 

328, 136 STAT. 4459 (2022)) to a claims fund 

(the ‘‘Hermit’s Peak/Calf Canyon Fire 

Assistance Act,’’ Public Law 117–180, 136 

Stat. 2114 (2022)) administered by FEMA for 

the Hermit’s Peak/Calf Canyon Fire which 

was the larger fire covered by DR 4652. At 

the time we were seeking more information 

from the state and FEMA on how those 

claims funds could be used. 

Absent the special appropriation, HUD had 

determined for this disaster $16.961 million 

in total unmet needs and $2.544 million in 

mitigation (15% of the unmet needs). A great 

deal of what HUD calculates for unmet needs 

would be covered by the claims fund. 

According to FEMA,4 ‘‘covered losses will 

include but are not limited to uninsured and 

uncompensated property loss; business and 

financial loss; and some heightened risk 

reduction to minimize impacts from 

heightened risks caused by the wildfires.’’ 

Individuals, businesses, non-federal 

government, Indian Tribes, and Not-for-Profit 

entities are eligible. (See 44 CFR part 296). 

According to 44 CFR 296.21, claims can be 

made for: 

• Loss of property (examples: property loss, 

decrease in value of real property, damage 

to physical infrastructure, lost subsistence, 

cost reforestation, other.) 

• Business loss (examples: damage to 

tangible assets or inventory, business 

interruption loss, overhead, employee 

wages, loss of business net income, other.) 

• Financial loss (examples: increased 

mortgage interest cost, insurance 

deductible, temporary living or relocation 

expenses, lost wages or personal income, 

emergency staffing, debris removal and 

clean-up, other.) 

• Personal injury (examples: general 

damages, medical expenses, injury-related 

lost wages/personal income 

But there are items that are not eligible 

under the claims fund, including replacing 

lost affordable rental housing, business and 

infrastructure needs outside of the Hermits 

Peak/Calf Canyon fire claims fund area, and 

mitigation. As such, HUD has calculated this 

grant as the total unmet needs $16.961 

million, plus mitigation based on the total 

unmet needs (15% of $16.961 million = 

$2.544 million), less the amount expected to 

be covered by the claims fund $15.374 

million, resulting in an allocation of $4.131 

million. 

Pro-Rata Allocation for January 2023 

Disasters 

Consistent with long-standing practice 

when unmet needs for CDBG–DR exceed 

funding available, the allocation among 

eligible grantees is made proportionally. That 

is, the overall amount available—$138.020 

million in funding—is divided by the total 

estimated unmet need and mitigation for the 

three disasters—$241.728 million to arrive at 

57.1%. Each of the three grantees is being 

allocated 57.1 percent of their unmet needs 

and mitigation rounded to the nearest $1,000. 

Appendix B—The Consolidated Notice 

CDBG–DR Consolidated Notice Waivers and 

Alternative Requirements 

Table of Contents 

I. Waivers and Alternative Requirements 

II. Eligible Activities 

A. Clarification of Disaster-Related 

Activities 

B. Housing and Related Floodplain Issues 

C. Infrastructure (Public Facilities, Public 

Improvements) 

D. Economic Revitalization 

III. Grant Administration 

A. Pre-Award Evaluation of Management 

and Oversight of Funds 

B. Administration, Planning, and Financial 

Management 

C. Action Plan for Disaster Recovery 

Waiver and Alternative Requirement 

D. Citizen Participation Requirements 

E. Program Income 

F. Other General Waivers and Alternative 

Requirements 

G. Ineligible Activities in CDBG–DR 

IV. Other Program Requirements 

A. Duplication of Benefits 

B. Procurement 

C. Use of the ‘‘Upper Quartile’’ or 

‘‘Exception Criteria’’ 

D. Environmental Requirements 

E. Flood Insurance Requirements 

F. URA, Section 104(d) and Related CDBG 

Program Requirements 

V. Performance Reviews 

A. Timely Distribution and Expenditure of 

Funds 

B. HUD’s Review of Continuing Capacity 

C. Grantee Reporting Requirements in the 

DRGR System 

I. Waivers and Alternative Requirements 

CDBG–DR grantees that are subject to this 

Consolidated Notice, as indicated in each 

Federal Register notice that announces 

allocations of the appropriated CDBG–DR 

funds (‘‘Allocation Announcement Notice’’), 

must comply with all waivers and alternative 

requirements in the Consolidated Notice, 

unless expressly made inapplicable (e.g., a 

waiver that applies to states only does not 

apply to units of general local governments 

and Indian tribes). Except as described in 

applicable waivers and alternative 

requirements, the statutory and regulatory 

provisions governing the CDBG program (and 

for Indian tribes, the Indian CDBG program) 

shall apply to grantees receiving a CDBG–DR 

allocation. Statutory provisions (title I of the 

HCDA) that apply to all grantees can be 

found at 42 U.S.C. 5301 et seq. and regulatory 

requirements, which differ for each type of 

grantee, are described in each of the three 

paragraphs below. 

Except as modified, the State CDBG 

program rules shall apply to state grantees 

receiving a CDBG–DR allocation. Applicable 

State CDBG program regulations are found at 

24 CFR part 570, subpart I. For insular areas, 

HUD waives the provisions of 24 CFR part 

570, subpart F and imposes the following 

alternative requirement: Insular areas shall 

administer their CDBG–DR allocations in 

accordance with the regulatory and statutory 

provisions governing the State CDBG 

program, as modified by the Consolidated 

Notice. 

Except as modified, statutory and 

regulatory provisions governing the 

Entitlement CDBG Program shall apply to 

unit of general local government grantees 

(often referred to as local government 

grantees in appropriations acts). Applicable 

Entitlement CDBG Program regulations are 

found at 24 CFR part 570, as described in 

§ 570.1(a). 

Except as modified, CDBG–DR grants made 

by HUD to Indian tribes shall be subject to 

the statutory provisions in title I of the HCDA 

that apply to Indian tribes and the 

regulations in 24 CFR part 1003 governing 

the Indian CDBG program, except those 

requirements in part 1003 related to the 

funding application and selection process. 

References to the action plan in the above 

regulations shall refer to the action plan 

required by the Consolidated Notice and not 

to the consolidated plan action plan required 

by 24 CFR part 91. All references pertaining 

to timelines and/or deadlines are in terms of 

calendar days unless otherwise noted. 

II. Eligible Activities 

II.A. Clarification of Disaster-Related 

Activities 

CDBG–DR funds are provided for necessary 

expenses for activities authorized under title 

I of the HCDA related to disaster relief, longterm recovery, restoration of infrastructure 

and housing, economic revitalization, and 


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mitigation of risk associated with activities 

carried out for these purposes, in the ‘‘most 

impacted and distressed’’ areas (identified by 

HUD or the grantee) resulting from a major 

disaster. All CDBG–DR funded activities 

must address an impact of the disaster for 

which funding was allocated. Accordingly, 

each activity must: (1) address a direct or 

indirect impact from the disaster in a most 

impacted and distressed area; (2) be a CDBGeligible activity (or be eligible under a waiver 

or alternative requirement); and (3) meet a 

national objective. When appropriations acts 

provide an additional allocation amount for 

mitigation of hazard risks that does not 

require a connection to the qualifying major 

disaster, requirements for the use of those 

funds will be included in the Allocation 

Announcement Notice. 

II.A.1. Documenting a Connection to the 

Disaster. Grantees must maintain records that 

document how each funded activity 

addresses a direct or indirect impact from the 

disaster. Grantees may do this by linking 

activities to a disaster recovery need that is 

described in the impact and unmet needs 

assessment in the action plan (requirements 

for the assessment are addressed in section 

III.C.1.a.). Sufficient documentation of 

physical loss must include damage or 

rebuilding estimates, insurance loss reports, 

images, or similar information that 

documents damage caused by the disaster. 

Sufficient documentation for non-physical 

disaster-related impacts must clearly show 

how the activity addresses the disaster 

impact, e.g., for economic development 

activities, data about job loss or businesses 

closing after the disaster or data showing 

how pre-disaster economic stressors were 

aggravated by the disaster; or for housing 

activities, a post-disaster housing analysis 

that describes the activities that are necessary 

to address the post-disaster housing needs. 

II.A.2. Resilience and hazard mitigation. 

The Consolidated Notice will help to 

improve long-term community resilience by 

requiring grantees to fully incorporate 

mitigation measures that will protect the 

public, including members of protected 

classes, vulnerable populations, and 

underserved communities, from the risks 

identified by the grantee among other 

vulnerabilities. This approach will better 

ensure the revitalization of the community 

long after the recovery projects are complete. 

Accordingly, HUD is adopting the 

following alternative requirement to section 

105(a): Grantees may carry out the activities 

described in section 105(a), as modified by 

waivers and alternative requirements, to the 

extent that the activities comply with the 

following: 

II.A.2.a. Alignment with mitigation plans. 

Grantees must ensure that the mitigation 

measures identified in their action plan will 

align with existing hazard mitigation plans 

submitted to the Federal Emergency 

Management Agency (FEMA) under section 

322 of the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act (42 U.S.C. 

5165) or other state, local, or tribal hazard 

mitigation plans. 

II.A.2.b. Mitigation measures. Grantees 

must incorporate mitigation measures when 

carrying out activities to construct, 

reconstruct, or rehabilitate residential or nonresidential structures with CDBG–DR funds 

as part of activities eligible under 42 U.S.C. 

5305(a) (including activities authorized by 

waiver and alternative requirement). To meet 

this alternative requirement, grantees must 

demonstrate that they have incorporated 

mitigation measures into CDBG–DR activities 

as a construction standard to create 

communities that are more resilient to the 

impacts of recurring natural disasters and the 

impacts of climate change. When 

determining which mitigation measures to 

incorporate, grantees should design and 

construct structures to withstand existing 

and future climate impacts expected to occur 

over the service life of the project. 

II.A.2.c. Resilience performance metrics. 

Before carrying out CDBG–DR funded 

activities to construct, reconstruct, or 

rehabilitate residential or non-residential 

structures, the grantee must establish 

resilience performance metrics for the 

activity, including: (1) an estimate of the 

projected risk to the completed activity from 

natural hazards, including those hazards that 

are influenced by climate change (e.g., high 

winds destroying newly built homes), (2) 

identification of the mitigation measures that 

will address the projected risks (e.g., using 

building materials that are able to withstand 

high winds), and (3) an assessment of the 

benefit of the grantee’s measures through 

verifiable data (e.g., 10 newly built homes 

will withstand high winds up to 100 mph). 

II.A.3. Most impacted and distressed (MID) 

areas. Funds must be used for costs related 

to unmet needs in the MID areas resulting 

from qualifying disasters. HUD allocates 

funds using the best available data that cover 

the eligible affected areas and identifies MID 

areas. Grantees are required to use 80 percent 

of all CDBG–DR funds to benefit the HUDidentified MID areas. The HUD-identified 

MID areas and the minimum dollar amount 

that must be spent to benefit those areas will 

be identified for each grantee in the 

applicable Allocation Announcement Notice. 

If a grantee seeks to add other areas to the 

HUD-identified MID area, the grantee must 

contact its CPD Representative or CPD 

Specialist and submit the request with a datadriven analysis that illustrates the basis for 

designating the additional area as most 

impacted and distressed as a result of the 

qualifying disaster. 

Grantees may use up to five percent of the 

total grant award for grant administration. 

Therefore, HUD will include 80 percent of a 

grantee’s expenditures for grant 

administration in its determination that 80 

percent of the total award has benefited the 

HUD-identified MID area. Expenditures for 

planning activities may also be counted 

towards the HUD-identified MID area 

requirement, if the grantee describes in its 

action plan how those planning activities 

benefit those areas. 

HUD may identify an entire jurisdiction or 

a ZIP code as a MID area. If HUD designates 

a ZIP code as a MID area for the purposes of 

allocating funds, the grantee may expand 

program operations to the whole county or 

counties that overlap with the HUD 

designated ZIP code. A grantee must indicate 

the decision to expand eligibility to the 

whole county or counties in its action plan. 

Grantees must determine where to use the 

remaining amount of the CDBG–DR grant, but 

that portion of the allocation may only be 

used to address unmet needs and that benefit 

those areas that the grantee determines are 

most impacted and distressed (‘‘granteeidentified MID areas’’) within areas that 

received a presidential major disaster 

declaration identified by the disaster 

numbers listed in the applicable Allocation 

Announcement Notice. The grantee must use 

quantifiable and verifiable data in its 

analysis, as referenced in its action plan, to 

identify the MID areas where it will use the 

remaining amount of CDBG–DR funds. 

Grantee expenditures for eligible unmet 

needs outside of the HUD-identified or 

grantee-identified MID areas are allowable, 

provided that the grantee can demonstrate 

how the expenditure of CDBG–DR funds 

outside of the MID areas will address unmet 

needs identified within the HUD-identified 

or grantee-identified MID area (e.g., upstream 

water retention projects to reduce 

downstream flooding in the HUD-identified 

MID area). 

II.B. Housing Activities and Related 

Floodplain Issues 

Grantees may use CDBG–DR funds for 

activities that may include, but are not 

limited to, new construction, reconstruction, 

and rehabilitation of single-family or 

multifamily housing, homeownership 

assistance, buyouts, and rental assistance. 

The broadening of eligible CDBG–DR 

activities related to housing under the HCDA 

is necessary following major disasters in 

which housing, including large numbers of 

affordable housing units, have been damaged 

or destroyed. The following waivers and 

alternative requirements will assist grantees 

in addressing the full range of unmet housing 

needs arising from a disaster. 

II.B.1. New housing construction waiver 

and alternative requirement. 42 U.S.C. 

5305(a) and 24 CFR 570.207(b)(3) are waived 

to the extent necessary to permit new 

housing construction, subject to the 

following alternative requirement. When a 

CDBG–DR grantee carries out a new housing 

construction activity, 24 CFR 570.202 shall 

apply and shall be read to extend to new 

construction in addition to rehabilitation 

assistance. Private individuals and entities 

must remain compliant with federal 

accessibility requirements as well as with the 

applicable site selection requirements of 24 

CFR 1.4(b)(3) and 8.4(b)(5). 

II.B.2. Construction standards for new 

construction, reconstruction, and 

rehabilitation. HUD is adopting an 

alternative requirement to require grantees to 

adhere to the applicable construction 

standards in II.B.2.a. through II.B.2.d. when 

carrying out activities to construct, 

reconstruct, or rehabilitate residential 

structures with CDBG–DR funds as part of 

activities eligible under 42 U.S.C. 5305(a) 

(including activities authorized by waiver 

and alternative requirement). For purposes of 

the Consolidated Notice, the terms 

‘‘substantial damage’’ and ‘‘substantial 

improvement’’ shall be as defined in 44 CFR 

59.1 unless otherwise noted. 

II.B.2.a. Green and resilient building 

standard for new construction and 


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reconstruction of housing. Grantees must 

meet the Green and Resilient Building 

Standard, as defined in this subparagraph, 

for: (i) all new construction and 

reconstruction (i.e., demolishing a housing 

unit and rebuilding it on the same lot in 

substantially the same manner) of residential 

buildings and (ii) all rehabilitation activities 

of substantially damaged residential 

buildings, including changes to structural 

elements such as flooring systems, columns, 

or load-bearing interior or exterior walls. 

The Green and Resilient Building Standard 

requires that all construction covered by the 

paragraph above and assisted with CDBG–DR 

funds meet an industry-recognized standard 

that has achieved certification under (i) 

Enterprise Green Communities; (ii) LEED 

(New Construction, Homes, Midrise, Existing 

Buildings Operations and Maintenance, or 

Neighborhood Development); (iii) ICC–700 

National Green Building Standard Green+ 

Resilience; (iv) Living Building Challenge; or 

(v) any other equivalent comprehensive green 

building program acceptable to HUD. 

Additionally, all such covered construction 

must achieve a minimum energy efficiency 

standard, such as (i) ENERGY STAR 

(Certified Homes or Multifamily High-Rise); 

(ii) DOE Zero Energy Ready Home; (iii) 

EarthCraft House, EarthCraft Multifamily; (iv) 

Passive House Institute Passive Building or 

EnerPHit certification from the Passive House 

Institute US (PHIUS), International Passive 

House Association; (v) Greenpoint Rated 

New Home, Greenpoint Rated Existing Home 

(Whole House or Whole Building label); (vi) 

Earth Advantage New Homes; or (vii) any 

other equivalent energy efficiency standard 

acceptable to HUD. Grantees must identify, 

in each project file, which of these Green and 

Resilient Building Standards will be used for 

any building subject to this paragraph. 

However, grantees are not required to use the 

same standards for each project or building. 

II.B.2.b. Standards for rehabilitation of 

nonsubstantially damaged residential 

buildings. For rehabilitation other than the 

rehabilitation of substantially damaged 

residential buildings described in section 

II.B.2.a. above, grantees must follow the 

guidelines specified in the HUD CPD Green 

Building Retrofit Checklist. 

Grantees must apply these guidelines to 

the extent applicable for the rehabilitation 

work undertaken, for example, the use of 

mold resistant products when replacing 

surfaces such as drywall. Products and 

appliances replaced as part of the 

rehabilitation work, must be ENERGY STARlabeled, WaterSense-labeled, or Federal 

Energy Management Program (FEMP)- 

designated products or appliances. 

II.B.2.c. Elevation standards for new 

construction, reconstruction, and 

rehabilitation of substantial damage, or 

rehabilitation resulting in substantial 

improvements. The following elevation 

standards apply to new construction, 

rehabilitation of substantial damage, or 

rehabilitation resulting in substantial 

improvement of residential structures located 

in an area delineated as a special flood 

hazard area or equivalent in FEMA’s data 

sources. 24 CFR 55.2(b)(1) provides 

additional information on data sources, 

which apply to all floodplain designations. 

All structures, defined at 44 CFR 59.1, 

designed principally for residential use, and 

located in the one percent annual chance (or 

100-year) floodplain, that receive assistance 

for new construction, reconstruction, 

rehabilitation of substantial damage, or 

rehabilitation that results in substantial 

improvement, as defined at 24 CFR 

55.2(b)(10), must be elevated with the lowest 

floor, including the basement, at least two 

feet above the one percent annual chance 

floodplain elevation (base flood elevation). 

Mixed-use structures with no dwelling units 

and no residents below two feet above base 

flood elevation, must be elevated or 

floodproofed, in accordance with FEMA 

floodproofing standards at 44 CFR 

60.3(c)(3)(ii) or successor standard, up to at 

least two feet above base flood elevation. 

All Critical Actions, as defined at 24 CFR 

55.2(b)(3), within the 500-year (or 0.2 percent 

annual chance) floodplain must be elevated 

or floodproofed (in accordance with FEMA 

floodproofing standards at 44 CFR 60.3(c)(2) 

and (3) or successor standard) to the higher 

of the 500-year floodplain elevation or three 

feet above the 100-year floodplain elevation. 

If the 500-year floodplain is unavailable, and 

the Critical Action is in the 100-year 

floodplain, then the structure must be 

elevated or floodproofed (in accordance with 

FEMA floodproofing standards at 44 CFR 

60.3(c)(2) and (3) or successor standard) at 

least three feet above the 100-year floodplain 

elevation. Critical Actions are defined as 

‘‘any activity for which even a slight chance 

of flooding would be too great, because such 

flooding might result in loss of life, injury to 

persons or damage to property.’’ For 

example, Critical Actions include hospitals, 

nursing homes, emergency shelters, police 

stations, fire stations, and principal utility 

lines. 

In addition to other requirements in this 

section, grantees must comply with 

applicable state, local, and tribal codes and 

standards for floodplain management, 

including elevation, setbacks, and 

cumulative substantial damage requirements. 

Grantees using CDBG–DR funds as the nonFederal match in a FEMA-funded project 

may apply the alternative requirement for the 

elevation of structures described in section 

III.F.6. Structures that are elevated must meet 

federal accessibility standards. 

II.B.2.d. Broadband infrastructure in 

housing. Any substantial rehabilitation, as 

defined by 24 CFR 5.100, reconstruction, or 

new construction of a building with more 

than four rental units must include 

installation of broadband infrastructure, 

except where the grantee documents that: (i) 

the location of the new construction or 

substantial rehabilitation makes installation 

of broadband infrastructure infeasible; (ii) the 

cost of installing broadband infrastructure 

would result in a fundamental alteration in 

the nature of its program or activity, or in an 

undue financial burden; or (iii) the structure 

of the housing to be substantially 

rehabilitated makes installation of broadband 

infrastructure infeasible. 

II.B.3. Applicable affordability periods for 

new construction of affordable rental 

housing. To meet the low- and moderateincome housing national objective, rental 

housing assisted with CDBG–DR funds must 

be rented to low- and moderate-income (LMI) 

households at affordable rents, and a grantee 

must define ‘‘affordable rents’’ in its action 

plan. Because the waiver and alternative 

requirement in II.B.1. authorizes the use of 

grant funds for new housing construction, 

HUD is imposing the following alternative 

requirement to modify the low- and 

moderate-income housing national objective 

criteria in 24 CFR 570.208(a)(3) and 

570.483(b)(3) for activities involving the new 

construction of affordable rental housing of 

five or more units. For activities that will 

construct five or more units, in addition to 

other applicable criteria in 24 CFR 

570.208(a)(3) and 570.483(b)(3), in its action 

plan, a grantee must define the affordability 

standards, including ‘‘affordable rents,’’ the 

enforcement mechanisms, and applicable 

timeframes, that will apply to the new 

construction of affordable rental housing, i.e., 

when the activity will result in construction 

of five or more units, the affordability 

requirements described in the action plan 

apply to the units that will be occupied by 

LMI households. The minimum timeframes 

and other related requirements acceptable for 

compliance with this alternative requirement 

are the HOME Investment Partnerships 

Program (HOME) requirements at 24 CFR 

92.252(e), including the table listing the 

affordability periods at the end of 24 CFR 

92.252(e). Therefore, the grantee must adopt 

and implement enforceable affordability 

standards that comply with or exceed 

requirements at 24 CFR 92.252(e)(1) for the 

new construction of affordable rental housing 

in structures containing five or more units. 

II.B.4. Affordability period for new 

construction of homes built for LMI 

households. In addition to alternative 

requirements in II.B.1., the following 

alternative requirement applies to activities 

to construct new single-family units for 

homeownership that will meet the LMI 

housing national objective criteria. Grantees 

must establish affordability restrictions on all 

newly constructed single-family housing (for 

purposes of the Consolidated Notice, singlefamily housing is defined as four units or 

less), that, upon completion, will be 

purchased and occupied by LMI 

homeowners. The minimum affordability 

period acceptable for compliance are the 

HOME requirements at 24 CFR 92.254(a)(4). 

If a grantee applies other standards, the 

periods of affordability applied by a grantee 

must meet or exceed the applicable HOME 

requirements in 24 CFR 92.254(a)(4) and the 

table of affordability periods directly 

following that provision. Grantees shall 

establish resale or recapture requirements for 

housing funded pursuant to this paragraph 

and shall describe those requirements in the 

action plan or substantial amendment in 

which the activity is proposed. The resale or 

recapture requirements must clearly describe 

the terms of resale or recapture and the 

specific circumstances under which resale or 

recapture will be used. Affordability 

restrictions must be enforceable and imposed 

by recorded deed restrictions, covenants, or 

other similar mechanisms. The affordability 

restrictions, including the affordability 


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period requirements in this paragraph do not 

apply to housing units newly constructed or 

reconstructed for an owner-occupant to 

replace the owner-occupant’s home that was 

damaged by the disaster. 

II.B.5. Homeownership assistance waiver 

and alternative requirement. 42 U.S.C. 

5305(a)(24) is waived and replaced with the 

following alternative requirement: 

‘‘Provision of direct assistance to facilitate 

and expand homeownership among persons 

at or below 120 percent of area median 

income (except that such assistance shall not 

be considered a public service for purposes 

of 42 U.S.C. 5305(a)(8)) by using such 

assistance to— 

(A) subsidize interest rates and mortgage 

principal amounts for homebuyers with 

incomes at or below 120 percent of area 

median income; 

(B) finance the acquisition of housing by 

homebuyers with incomes at or below 120 

percent of area median income that is 

occupied by the homebuyers; 

(C) acquire guarantees for mortgage 

financing obtained by homebuyers with 

incomes at or below 120 percent of area 

median income from private lenders, 

meaning that if a private lender selected by 

the homebuyer offers a guarantee of the 

mortgage financing, the grantee may 

purchase the guarantee to ensure repayment 

in case of default by the homebuyer. This 

subparagraph allows the purchase of 

mortgage insurance by the household but not 

the direct issuance of mortgage insurance by 

the grantee; 

(D) provide up to 100 percent of any down 

payment required from homebuyers with 

incomes at or below 120 percent of area 

median income; or 

(E) pay reasonable closing costs (normally 

associated with the purchase of a home) 

incurred by homebuyers with incomes at or 

below 120 percent of area median income.’’ 

While homeownership assistance, as 

described above, may be provided to 

households with incomes at or below 120 

percent of the area median income, HUD will 

only consider those funds used for 

households with incomes at or below 80 

percent of the area median income to qualify 

as meeting the LMI person benefit national 

objective. 

II.B.6. Limitation on emergency grant 

payments—interim mortgage assistance. 42 

U.S.C. 5305(a)(8), 24 CFR 570.201(e), 24 CFR 

570.207(b)(4), and 24 CFR 1003.207(b)(4) are 

modified to extend interim mortgage 

assistance (IMA) to qualified individuals 

from three months to up to twenty months. 

IMA must be used in conjunction with a 

buyout program, or the rehabilitation or 

reconstruction of single-family housing, 

during which mortgage payments may be due 

but the home is not habitable. A grantee 

using this alternative requirement must 

document, in its policies and procedures, 

how it will determine that the amount of 

assistance to be provided is necessary and 

reasonable. 

II.B.7. Buyout activities. CDBG–DR 

grantees may carry out property acquisition 

for a variety of purposes, but buyouts are a 

type of acquisition for the specific purpose of 

reducing the risk of property damage. HUD 

has determined that creating a new activity 

and alternative requirement for buyouts is 

necessary for consistency with the 

application of other Federal resources 

commonly used for this type of activity. 

Therefore, HUD is waiving 42 U.S.C. 5305(a) 

and establishing an alternative requirement 

only to the extent necessary to create a new 

eligible activity for buyouts. The term 

‘‘buyouts’’ means the acquisition of 

properties located in a floodway, floodplain, 

or other Disaster Risk Reduction Area that is 

intended to reduce risk from future hazards. 

Grantees can designate a Disaster Risk 

Reduction Area, as defined below. 

Grantees carrying out buyout activities 

must establish an open space management 

plan or equivalent, if one has not already 

been established, before implementation. The 

plan must establish full transparency about 

the planned use of acquired properties postbuyout, or the process by which the planned 

use will be determined and enforced. 

Buyout activities are subject to all 

requirements that apply to acquisition 

activities generally including but not limited 

to, the Uniform Relocation Assistance and 

Real Property Acquisition Policies Act of 

1970 (URA) (42 U.S.C. 4601, et seq.) and its 

implementing regulations at 49 CFR part 24, 

subpart B, unless waived or modified by 

alternative requirements. Only acquisitions 

that meet the definition of a ‘‘buyout’’ are 

subject to the post-acquisition land use 

restrictions imposed by the alternative 

requirement (II.B.7.a. below). The key factor 

in determining whether the acquisition is a 

buyout is whether the intent of the purchase 

is to reduce risk of property damage from 

future flooding or other hazards in a 

floodway, floodplain, or a Disaster Risk 

Reduction Area. A grantee that will buyout 

properties in a Disaster Risk Reduction Area 

must establish criteria in its policies and 

procedures to designate an area as a Disaster 

Risk Reduction Area for the buyout, pursuant 

to the following requirements: 

(1) the area has been impacted by the 

hazard that has been caused or exacerbated 

by the disaster for which the grantee received 

its CDBG–DR allocation; 

(2) the hazard identified must be a 

predictable environmental threat to the safety 

and well-being of program beneficiaries, 

including members of protected classes, 

vulnerable populations, and underserved 

communities, as evidenced by the best 

available data (e.g., FEMA Repetitive Loss 

Data, EPA’s Environmental Justice Screening 

and Mapping Tool, HHS’s climate change 

related guidance and data, etc.) and science 

(such as engineering and structural solutions 

propounded by FEMA, USACE, other federal 

agencies, etc.); and 

(3) the area must be clearly delineated so 

that HUD and the public may easily 

determine which properties are located 

within the designated area. 

Grantees may only redevelop an acquired 

property if the property is not acquired 

through a buyout program (i.e., the purpose 

of acquisition was something other than risk 

reduction). When acquisitions are not 

acquired through a buyout program, the 

purchase price must be consistent with 2 

CFR part 200, subpart E—Cost Principles 

(‘‘cost principles’’) and the pre-disaster fair 

market value may not be used. 

II.B.7.a. Buyout requirements: 

(i) Property to be acquired or accepted 

must be located within a floodway, 

floodplain, or Disaster Risk Reduction Area. 

(ii) Any property acquired or accepted 

must be dedicated and maintained in 

perpetuity for a use that is compatible with 

open space, recreational, floodplain and 

wetlands management practices, or other 

disaster-risk reduction practices. 

(iii) No new structure will be erected on 

property acquired or accepted under the 

buyout program other than: 

(a) a public facility that is open on all sides 

and functionally related to a designated open 

space (e.g., a park, campground, or outdoor 

recreation area); 

(b) a restroom; or 

(c) a flood control structure, provided that: 

(1) the structure does not reduce valley 

storage, increase erosive velocities, or 

increase flood heights on the opposite bank, 

upstream, or downstream; and 

(2) the local floodplain manager approves 

the structure, in writing, before 

commencement of construction of the 

structure. 

(iv) After the purchase of a buyout property 

with CDBG–DR funds, the owner of the 

buyout property (including subsequent 

owners) is prohibited from making any 

applications to any Federal entity in 

perpetuity for additional disaster assistance 

for any purpose related to the property 

acquired through the CDBG–DR funded 

buyout, unless the assistance is for an 

allowed use as described in paragraph (ii) 

above. The entity acquiring the property may 

lease or sell it to adjacent property owners or 

other parties for compatible uses that comply 

with buyout requirements in return for a 

maintenance agreement. 

(v) A deed restriction or covenant running 

with the property must require that the 

buyout property be dedicated and 

maintained for compatible uses that comply 

with buyout requirements in perpetuity. 

(vi) Grantees must choose from one of two 

valuation methods (pre-disaster value or 

post-disaster value) for a buyout program (or 

a single buyout activity). The grantee must 

apply its valuation method for all buyouts 

carried out under the program. If the grantee 

determines the post-disaster value of a 

property is higher than the pre-disaster value, 

a grantee may provide exceptions to its 

established valuation method on a case-bycase basis. The grantee must describe the 

process for such exceptions and how it will 

analyze the circumstances to permit an 

exception in its buyout policies and 

procedures. Each grantee must adopt policies 

and procedures on how it will demonstrate 

that the amount of assistance for a buyout is 

necessary and reasonable. 

(vii) All buyout activities must be 

classified using the ‘‘buyout’’ activity type in 

the Disaster Recovery and Grant Reporting 

(DRGR) system. 

(viii) Any state grantee implementing a 

buyout program or activity must consult with 

local or tribal governments within the areas 

in which buyouts will occur. 

II.B.8. Safe housing incentives in disasteraffected communities. 


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The limitation on eligible activities in 

section 42 U.S.C. 5305(a) is waived and HUD 

is establishing the following alternative 

requirement to establish safe housing 

incentives as an eligible activity. A safe 

housing incentive is any incentive provided 

to encourage households to relocate to 

suitable housing in a lower risk area or in an 

area promoted by the community’s 

comprehensive recovery plan. Displaced 

persons must receive any relocation 

assistance to which they are entitled under 

other legal authorities, such as the URA, 

section 104(d) of the HCDA, or those 

described in the Consolidated Notice. The 

grantee may offer safe housing incentives in 

addition to the relocation assistance that is 

legally required. 

Grantees must maintain documentation, at 

least at a programmatic level, describing how 

the grantee determined the amount of 

assistance for the incentive was necessary 

and reasonable, how the incentive meets a 

national objective, and that the incentives are 

in accordance with the grantee’s approved 

action plan and published program design(s). 

A grantee may require the safe housing 

incentive to be used for a particular purpose 

by the household receiving the assistance. 

However, this waiver does not permit a 

compensation program meaning that funds 

may not be provided to a beneficiary to 

compensate the beneficiary for an estimated 

or actual amount of loss from the declared 

disaster. Grantees are prohibited from 

offering housing incentives to a homeowner 

as an incentive to induce the homeowner to 

sell a second home, consistent with the 

prohibition and definition of second home in 

section II.B.12. 

II.B.9. National objectives for buyouts and 

safe housing incentives. 

Activities that assist LMI persons and meet 

the criteria for the national objectives 

described below, including in II.B.10., will be 

considered to benefit LMI persons unless 

there is substantial evidence to the contrary 

and will count towards the calculation of a 

grantee’s overall LMI benefit requirement as 

described in section III.F.2. The grantee shall 

appropriately ensure that activities that meet 

the criteria for any of the national objectives 

below do not benefit moderate-income 

persons to the exclusion of low-income 

persons. 

When undertaking buyout activities, to 

demonstrate that a buyout meets the low- and 

moderate-income housing (LMH) national 

objective, grantees must meet all 

requirements of the HCDA, and applicable 

regulatory criteria described below. 42 U.S.C. 

5305(c)(3) provides that any assisted activity 

that involves the acquisition of property to 

provide housing shall be considered to 

benefit LMI persons only to the extent such 

housing will, upon completion, be occupied 

by such persons. In addition, 24 CFR 

570.483(b)(3), 24 CFR 570.208(a)(3), and 24 

CFR 1003.208(c) apply the LMH national 

objective to an eligible activity carried out for 

the purpose of providing or improving 

permanent residential structures that, upon 

completion, will be occupied by LMI 

households. 

A buyout program that merely pays 

homeowners to leave their existing homes 

does not guarantee that those homeowners 

will occupy a new residential structure. 

Therefore, acquisition-only buyout programs 

cannot satisfy the LMH national objective 

criteria. 

To meet a national objective that benefits 

a LMI person, buyout programs can be 

structured in one of the following ways: 

(1) The buyout activity combines the 

acquisition of properties with another direct 

benefit—LMI housing activity, such as down 

payment assistance—that results in 

occupancy and otherwise meets the 

applicable LMH national objective criteria; 

(2) The activity meets the low- and 

moderate-income area (LMA) benefit criteria 

and documents that the acquired properties 

will have a use that benefits all the residents 

in a particular area that is primarily 

residential, where at least 51 percent of the 

residents are LMI persons. Grantees covered 

by the ‘‘exception criteria’’ as described in 

section IV.C. of the Consolidated Notice may 

apply it to these activities. To satisfy LMA 

criteria, grantees must define the service area 

based on the end use of the buyout 

properties; or 

(3) The program meets the criteria for the 

low- and moderate-income limited clientele 

(LMC) national objective by restricting 

buyout program eligibility to exclusively LMI 

persons and benefiting LMI sellers by 

acquiring their properties for more than 

current fair market value (in accordance with 

the valuation requirements in section 

II.B.7.a.(vi)). 

II.B.10. For LMI Safe Housing Incentive 

(LMHI). The following alternative 

requirement establishes new LMI national 

objective criteria that apply to safe housing 

incentive (LMHI) activities that benefit LMI 

households. HUD has determined that 

providing CDBG–DR grantees with an 

additional method to demonstrate how safe 

housing incentive activities benefit LMI 

households will ensure that grantees and 

HUD can account for and assess the benefit 

that CDBG–DR assistance for these activities 

has on LMI households. 

The LMHI national objective may be used 

when a grantee uses CDBG–DR funds to carry 

out a safe housing incentive activity that 

benefits one or more LMI persons. To meet 

the LMHI national objective, the incentive 

must be a.) tied to the voluntary acquisition 

of housing (including buyouts) owned by a 

qualifying LMI household and made to 

induce a move outside of the affected 

floodplain or disaster risk reduction area to 

a lower-risk area or structure; or b.) for the 

purpose of providing or improving 

residential structures that, upon completion, 

will be occupied by a qualifying LMI 

household and will be in a lower risk area. 

II.B.11. Redevelopment of acquired 

properties. Although properties acquired 

through a buyout program may not be 

redeveloped, grantees may redevelop other 

acquired properties. For non-buyout 

acquisitions, HUD has not permitted the 

grantee to base acquisition cost on predisaster fair market value. The acquisition 

cost must comply with applicable cost 

principles and with the acquisition 

requirements at 49 CFR part 24, subpart B, 

as revised by the Consolidated Notice 

waivers and alternative requirements. In 

addition to the purchase price, grantees may 

opt to provide optional relocation assistance, 

as allowable under Section 104 and 105 of 

the HCDA (42 U.S.C. 5304 and 42 U.S.C. 

5305) and 24 CFR 570.606(d), and as 

expanded by section IV.F.5. of the 

Consolidated Notice, to the owner of a 

property that will be redeveloped if: a.) the 

property is purchased by the grantee or 

subrecipient through voluntary acquisition; 

and b.) the owner’s need for additional 

assistance is documented. Any optional 

relocation assistance must provide equal 

relocation assistance within each class of 

displaced persons, including but not limited 

to providing reasonable accommodation 

exceptions to persons with disabilities. See 

24 CFR 570.606(d) for more information on 

optional relocation assistance. In addition, 

tenants displaced by these voluntary 

acquisitions may be eligible for URA 

relocation assistance. In carrying out 

acquisition activities, grantees must ensure 

they are in compliance with the long-term 

redevelopment plans of the community in 

which the acquisition and redevelopment is 

to occur. 

II.B.12. Alternative requirement for 

housing rehabilitation—assistance for second 

homes. HUD is instituting an alternative 

requirement to the rehabilitation provisions 

at 42 U.S.C. 5305(a)(4) as follows: properties 

that served as second homes at the time of 

the disaster, or following the disaster, are not 

eligible for rehabilitation assistance or safe 

housing incentives. This prohibition does not 

apply to acquisitions that meet the definition 

of a buyout. A second home is defined for 

purposes of the Consolidated Notice as a 

home that is not the primary residence of the 

owner, a tenant, or any occupant at the time 

of the disaster or at the time of application 

for CDBG–DR assistance. Grantees can verify 

a primary residence using a variety of 

documentation including, but not limited to, 

voter registration cards, tax returns, 

homestead exemptions, driver’s licenses, and 

rental agreements. Acquisition of second 

homes at post-disaster fair market value is 

not prohibited. 

II.C. Infrastructure (Public Facilities, Public 

Improvements), Match, and Elevation of NonResidential Structures 

HUD is adopting an alternative 

requirement to require grantees to adhere to 

the applicable construction standards and 

requirements in II.C.1., II.C.2. and II.C.4., 

which apply only to those eligible activities 

described in those paragraphs. 

II.C.1. Infrastructure planning and design. 

All newly constructed infrastructure that is 

assisted with CDBG–DR funds must be 

designed and constructed to withstand 

extreme weather events and the impacts of 

climate change. To satisfy this requirement, 

the grantee must identify and implement 

resilience performance metrics as described 

in section II.A.2. 

For purposes of this requirement, an 

infrastructure activity includes any activity 

or group of activities (including acquisition 

or site or other improvements), whether 

carried out on public or private land, that 

assists the development of the physical assets 


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that are designed to provide or support 

services to the general public in the following 

sectors: Surface transportation, including 

roadways, bridges, railroads, and transit; 

aviation; ports, including navigational 

channels; water resources projects; energy 

production and generation, including from 

renewable, nuclear, and hydro sources; 

electricity transmission; broadband; 

pipelines; stormwater and sewer 

infrastructure; drinking water infrastructure; 

schools, hospitals, and housing shelters; and 

other sectors as may be determined by the 

Federal Permitting Improvement Steering 

Council. For purposes of this requirement, an 

activity that falls within this definition is an 

infrastructure activity regardless of whether 

it is carried out under sections 105(a)(2), 

105(a)(4), 105(a)(14), another section of the 

HCDA, or a waiver or alternative requirement 

established by HUD. Action plan 

requirements related to infrastructure 

activities are found in section III.C.1.e. of the 

Consolidated Notice. 

II.C.2. Elevation of nonresidential 

structure. Nonresidential structures, 

including infrastructure, assisted with 

CDBG–DR funds must be elevated to the 

standards described in this paragraph or 

floodproofed, in accordance with FEMA 

floodproofing standards at 44 CFR 

60.3(c)(3)(ii) or successor standard, up to at 

least two feet above the 100-year (or one 

percent annual chance) floodplain. All 

Critical Actions, as defined at 24 CFR 

55.2(b)(3), within the 500-year (or 0.2 percent 

annual chance) floodplain must be elevated 

or floodproofed (in accordance with FEMA 

floodproofing standards at 44 CFR 60.3(c)(2) 

and (3) or successor standard) to the higher 

of the 500-year floodplain elevation or three 

feet above the 100-year floodplain elevation. 

If the 500-year floodplain or elevation is 

unavailable, and the Critical Action is in the 

100-year floodplain, then the structure must 

be elevated or floodproofed at least three feet 

above the 100-year floodplain elevation. 

Activities subject to elevation requirements 

must comply with applicable federal 

accessibility mandates. 

In addition to the other requirements in 

this section, the grantee must comply with 

applicable state, local, and tribal codes and 

standards for floodplain management, 

including elevation, setbacks, and 

cumulative substantial damage requirements. 

Grantees using CDBG–DR funds as the nonFederal match in a FEMA-funded project 

may apply the alternative requirement for the 

elevation of structures described in section 

IV.D.5. 

II.C.3. CDBG–DR funds as match. As 

provided by the HCDA, grant funds may be 

used to satisfy a match requirement, share, or 

contribution for any other Federal program 

when used to carry out an eligible CDBG–DR 

activity. This includes programs or activities 

administered by the FEMA or the U.S. Army 

Corps of Engineers (USACE). By law, 

(codified in the HCDA as a note to section 

105(a)) only $250,000 or less of CDBG–DR 

funds may be used for the non-Federal costshare of any project funded by USACE. 

Appropriations acts prohibit the use of 

CDBG–DR funds for any activity 

reimbursable by, or for which funds are also 

made available by FEMA or USACE. 

In response to a disaster, FEMA may 

implement, and grantees may elect to follow, 

alternative procedures for FEMA’s Public 

Assistance Program, as authorized pursuant 

to Section 428 of the Robert T. Stafford 

Disaster Relief and Emergency Assistance Act 

(‘‘Stafford Act’’). Like other projects, grantees 

may use CDBG–DR funds as a matching 

requirement, share, or contribution for 

Section 428 Public Assistance Projects. For 

all match activities, grantees must document 

that CDBG–DR funds have been used for the 

actual costs incurred for the assisted project 

and for costs that are eligible, meet a national 

objective, and meet other applicable CDBG 

requirements. 

II.C.4. Requirements for flood control 

structures. Grantees that use CDBG–DR funds 

to assist flood control structures (i.e., dams 

and levees) are prohibited from using CDBG– 

DR funds to enlarge a dam or levee beyond 

the original footprint of the structure that 

existed before the disaster event, without 

obtaining pre-approval from HUD and any 

Federal agencies that HUD determines are 

necessary based on their involvement or 

potential involvement with the levee or dam. 

Grantees that use CDBG–DR funds for levees 

and dams are required to: (1) register and 

maintain entries regarding such structures 

with the USACE National Levee Database or 

National Inventory of Dams; (2) ensure that 

the structure is admitted in the USACE PL 

84–99 Program (Levee Rehabilitation and 

Inspection Program); (3) ensure the structure 

is accredited under the FEMA National Flood 

Insurance Program; (4) enter the exact 

location of the structure and the area served 

and protected by the structure into the DRGR 

system; and (5) maintain file documentation 

demonstrating that the grantee has conducted 

a risk assessment before funding the flood 

control structure and documentation that the 

investment includes risk reduction measures. 

II.D. Economic Revitalization and Section 3 

Requirements on Economic Opportunities 

CDBG–DR funds can be used for CDBG–DR 

eligible activities related to economic 

revitalization. The attraction, retention, and 

return of businesses and jobs to a disasterimpacted area is critical to long-term 

recovery. Accordingly, for CDBG–DR 

purposes, economic revitalization may 

include any CDBG–DR eligible activity that 

demonstrably restores and improves the local 

economy through job creation and retention 

or by expanding access to goods and services. 

The most common CDBG–DR eligible 

activities to support economic revitalization 

are outlined in 24 CFR 570.203 and 570.204 

and sections 105(a)(14), (15), and (17) of the 

HCDA. 

Based on the U.S. Change Research 

Program’s Fourth National Climate 

Assessment, climate-related natural hazards, 

extreme events, and natural disasters 

disproportionately affect LMI individuals 

who belong to underserved communities 

because they are less able to prepare for, 

respond to, and recover from the impacts of 

extreme events and natural hazards, or are 

members of communities that have 

experienced significant disinvestment and 

historic discrimination. Therefore, HUD is 

imposing the following alternative 

requirement: When funding activities under 

section 105(a) of the HCDA that support 

economic revitalization, grantees must 

prioritize those underserved communities 

that have been impacted by the disaster and 

that were economically distressed before the 

disaster, as described further below in II.D.1. 

The term ‘‘underserved communities’’ 

refers to populations sharing a particular 

characteristic, as well as geographic 

communities, that have been systematically 

denied a full opportunity to participate in 

aspects of economic, social, and civic life. 

Underserved communities that were 

economically distressed before the disaster 

include, but are not limited to, those areas 

that were designated as a Promise Zone, 

Opportunity Zone, a Neighborhood 

Revitalization Strategy Area, a tribal area, or 

those areas that meet at least one of the 

distress criteria established for the 

designation of an investment area of 

Community Development Financial 

Institution at 12 CFR 1805.201(b)(3)(ii)(D). 

Grantees undertaking an economic 

revitalization activity must maintain 

supporting documentation to demonstrate 

how the grantee has prioritized underserved 

communities for purposes of its activities 

that support economic revitalization, as 

described below in II.D.1. 

II.D.1. Prioritizing economic revitalization 

assistance—alternative requirement. When 

funding activities outlined in 24 CFR 570.203 

and 570.204 and sections 105(a)(14), (15), 

and (17) of the HCDA, HUD is instituting an 

alternative requirement in addition to the 

other requirements in these provisions to 

require grantees to prioritize assistance to 

disaster-impacted businesses that serve 

underserved communities and spur 

economic opportunity for underserved 

communities that were economically 

distressed before the disaster. 

II.D.2. National objective documentation 

for activities that support economic 

revitalization. 24 CFR 570.208(a)(4)(i) and 

(ii), 24 CFR 570.483(b)(4)(i) and (ii), 24 CFR 

570.506(b)(5) and (6), and 24 CFR 

1003.208(d) are waived to allow the grantees 

under the Consolidated Notice to identify the 

LMI jobs benefit by documenting, for each 

person employed, the name of the business, 

type of job, and the annual wages or salary 

of the job. HUD will consider the person 

income-qualified if the annual wages or 

salary of the job is at or under the HUDestablished income limit for a one-person 

family. This method replaces the standard 

CDBG requirement—in which grantees must 

review the annual wages or salary of a job in 

comparison to the person’s total household 

income and size (i.e., the number of persons). 

Thus, this method streamlines the 

documentation process by allowing the 

collection of wage data for each position 

created or retained from the assisted 

businesses, rather than from each individual 

household. 

II.D.3. Public benefit for activities that 

support economic revitalization. When 

applicable, the public benefit provisions set 

standards for individual economic 

development activities (such as a single loan 

to a business) and for the aggregate of all 

economic development activities. Economic 


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development activities support economic 

revitalization. Currently, public benefit 

standards limit the amount of CDBG 

assistance per job retained or created, or the 

amount of CDBG assistance per LMI person 

to whom goods or services are provided by 

the activity. These dollar thresholds can 

impede recovery by limiting the amount of 

assistance the grantee may provide to a 

critical activity. 

HUD waives the public benefit standards at 

42 U.S.C. 5305(e)(3), 24 CFR 570.482(f)(1), 

(2), (3), (4)(i), (5), and (6), and 570.209(b)(1), 

(2), (3)(i), (4), and 24 CFR 1003.302(c) for all 

economic development activities. Paragraph 

(g) of 24 CFR 570.482 and paragraph (c) and 

(d) under § 570.209 are also waived to the 

extent these provisions are related to public 

benefit. However, grantees that choose to take 

advantage of this waiver in lieu of complying 

with public benefit standards under the 

existing regulatory requirements shall be 

subject to the following condition: grantees 

shall collect and maintain documentation in 

the project file on the creation and retention 

of total jobs; the number of jobs within 

appropriate salary ranges, as determined by 

the grantee; the average amount of assistance 

provided per job, by activity or program; and 

the types of jobs. Additionally, grantees shall 

report the total number of jobs created and 

retained and the applicable national objective 

in the DRGR system. 

II.D.4. Clarifying note on Section 3 worker 

eligibility and documentation requirements. 

Section 3 of the Housing and Urban 

Development Act of 1968 (12 U.S.C. 1701u) 

(Section 3) applies to CDBG–DR activities 

that are Section 3 projects, as defined at 24 

CFR 75.3(a)(2). The purpose of Section 3 is 

to ensure that economic opportunities, most 

importantly employment, generated by 

certain HUD financial assistance shall be 

directed to low- and very low-income 

persons, particularly those who are recipients 

of government assistance for housing or 

residents of the community in which the 

Federal assistance is spent. CDBG–DR 

grantees are directed to HUD’s guidance 

published in CPD Notice 2021–09, ‘‘Section 

3 of the Housing and Urban Development Act 

of 1968, as amended by the Housing and 

Community Development Act of 1992, final 

rule requirements for CDBG, CDBG–CV, 

CDBG–DR, CDBG-Mitigation (CDBG–MIT), 

NSP, Section 108, and RHP projects,’’ as 

amended (https://www.hud.gov/sites/dfiles/ 

OCHCO/documents/2021-09cpdn.pdf). All 

direct recipients of CDBG–DR funding must 

report Section 3 information through the 

DRGR system. 

II.D.5. Waiver and modification of the job 

relocation clause to permit assistance to help 

a business return. CDBG requirements 

prevent program participants from providing 

assistance to a business to relocate from one 

labor market area to another if the relocation 

is likely to result in a significant loss of jobs 

in the labor market from which the business 

moved. This prohibition can be a critical 

barrier to reestablishing and rebuilding a 

displaced employment base after a major 

disaster. Therefore, 42 U.S.C. 5305(h), 24 

CFR 570.210, 24 CFR 570.482(h), and 24 CFR 

1003.209, are waived to allow a grantee to 

provide assistance to any business that was 

operating in the disaster-declared labor 

market area before the incident date of the 

applicable disaster and has since moved, in 

whole or in part, from the affected area to 

another state or to another labor market area 

within the same state to continue business. 

II.D.6. Underwriting. Notwithstanding 

section 105(e)(1) of the HCDA, no CDBG–DR 

funds may be provided to a for-profit entity 

for an economic development project under 

section 105(a)(17) of the HCDA unless such 

project has been evaluated and selected in 

accordance with guidelines developed by 

HUD pursuant to section 105(e)(2) of the 

HCDA for evaluating and selecting economic 

development projects. Grantees and their 

subrecipients are required to comply with the 

underwriting guidelines in appendix A to 24 

CFR part 570 if they are using grant funds to 

provide assistance to a for-profit entity for an 

economic development project under section 

105(a)(17) of the HCDA. The underwriting 

guidelines are found at appendix A of 24 CFR 

part 570. 

II.D.7. Limitation on use of funds for 

eminent domain. CDBG–DR funds may not 

be used to support any Federal, state, or local 

projects that seek to use the power of 

eminent domain, unless eminent domain is 

employed only for a public use. For purposes 

of this paragraph, public use shall not be 

construed to include economic development 

that primarily benefits private entities. The 

following shall be considered a public use for 

the purposes of eminent domain: any use of 

funds for (1) mass transit, railroad, airport, 

seaport, or highway projects; (2) utility 

projects that benefit or serve the general 

public, including energy related, 

communication-related, water related, and 

wastewater-related infrastructure; (3) other 

structures designated for use by the general 

public or which have other common-carrier 

or public-utility functions that serve the 

general public and are subject to regulation 

and oversight by the government; and (4) 

projects for the removal of an immediate 

threat to public health and safety, including 

the removal of a brownfield as defined in the 

Small Business Liability Relief and 

Brownfields Revitalization Act (Pub. L. 107– 

118). 

III. Grant Administration 

III.A. Pre-Award Evaluation of Management 

and Oversight of Funds 

III.A.1. Certification of financial controls 

and procurement processes, and adequate 

procedures for proper grant management. 

Appropriations acts require that the Secretary 

certify that the grantee has in place proficient 

financial controls and procurement processes 

and has established adequate procedures to 

prevent any duplication of benefits as 

defined by section 312 of the Stafford Act, 42 

U.S.C. 5155, to ensure timely expenditure of 

funds, to maintain a comprehensive website 

regarding all disaster recovery activities 

assisted with these funds, and to detect and 

prevent waste, fraud, and abuse of funds. 

III.A.1.a. Documentation requirements. To 

enable the Secretary to make this 

certification, each grantee must submit to 

HUD the certification documentation listed 

below. This information must be submitted 

within 60 days of the applicability date of the 

Allocation Announcement Notice, or with 

the grantee’s submission of its action plan in 

DRGR as described in section III.C.1, 

whichever date is earlier. If required by 

appropriations acts, grant agreements will 

not be executed until the Secretary has 

issued a certification for the grantee. For each 

of the items (1) through (6) below 

(collectively referred to as the ‘‘Financial 

Management and Grant Compliance 

Certification Requirements’’) the grantee 

must certify to the accuracy of its submission 

when submitting the Financial Management 

and Grant Compliance Certification Checklist 

(the ‘‘Certification Checklist’’). The 

Certification Checklist is a document that 

incorporates all of the Financial Management 

and Grant Compliance Certification 

Requirements. Not all of the requirements in 

(1) through (6) below are appropriate or 

applicable to Indian tribes. Therefore, Indian 

tribes that receive an allocation directly from 

HUD may request an alternative method to 

document support for the Secretary’s 

certification. 

(1) Proficient financial management 

controls. A grantee has proficient financial 

management controls if each of the following 

criteria is satisfied: 

(a) The grantee agency administering this 

grant submits its most recent single audit and 

consolidated annual financial report (CAFR), 

which in HUD’s determination indicates that 

the grantee has no material weaknesses, 

deficiencies, or concerns that HUD considers 

to be relevant to the financial management of 

CDBG, CDBG–DR, or CDBG–MIT funds. If the 

single audit or CAFR identified weaknesses 

or deficiencies, the grantee must provide 

documentation satisfactory to HUD showing 

how those weaknesses have been removed or 

are being addressed. (b) The grantee has 

completed and submitted the certification 

documentation required in the applicable 

Certification Checklist. The grantee’s 

documentation must demonstrate that the 

standards meet the requirements in the 

Consolidated Notice and the Certification 

Checklist. 

(2) Each grantee must provide HUD its 

procurement processes for review, so HUD 

may evaluate the grantee’s processes to 

determine that they are based on principles 

of full and open competition. A grantee’s 

procurement processes must comply with the 

procurement requirements at section IV.B. 

(a) A state grantee has proficient 

procurement processes if HUD determines 

that its processes uphold the principles of 

full and open competition and include an 

evaluation of the cost or price of the product 

or service, and if its procurement processes 

reflect that it: 

(i) Adopted 2 CFR 200.318 through 

200.327; 

(ii) Follows its own state procurement 

policies and procedures and establishes 

requirements for procurement processes for 

local governments and subrecipients based 

on full and open competition pursuant to 24 

CFR 570.489(g), and the requirements for the 

state, its local governments, and 

subrecipients include evaluation of the cost 

or price of the product or service; or 

(iii) Adopted 2 CFR 200.317, meaning that 

it will follow its own state procurement 


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processes and evaluate the cost or price of 

the product or service, but impose 2 CFR 

200.318 through 200.327 on its subrecipients. 

(b) A local government grantee has 

proficient procurement processes if the 

processes are consistent with the specific 

applicable procurement standards identified 

in 2 CFR 200.318 through 200.327. When the 

grantee provides a copy of its procurement 

processes, it must indicate the sections that 

incorporate these provisions. 

(c) An Indian tribe grantee has proficient 

procurement processes if its procurement 

standards are consistent with procurement 

requirements in 2 CFR part 200 imposed by 

24 CFR 1003.501, and additional 

procurement requirements in 1003.509(e) 

and 1003.510. 

(3) Duplication of benefits. A grantee has 

adequate policies and procedures to prevent 

the duplication of benefits (DOB) if the 

grantee submits and identifies a uniform 

process that reflects the requirements in 

section IV.A of the Consolidated Notice, 

including: 

(a) Determining all disaster assistance 

received by the grantee or applicant and all 

reasonably identifiable financial assistance 

available to the grantee or applicant, as 

applicable, before committing funds or 

awarding assistance; 

(b) Determining a grantee’s or an 

applicant’s unmet need(s) for CDBG–DR 

assistance before committing funds or 

awarding assistance; and 

(c) Requiring beneficiaries to enter into a 

signed agreement to repay any duplicative 

assistance if they later receive additional 

assistance for the same purpose for which the 

CDBG–DR award was provided. The grantee 

must identify a method to monitor 

compliance with the agreement for a 

reasonable period (i.e., a time period 

commensurate with risk) and must articulate 

this method in its policies and procedures, 

including the basis for the period during 

which the grantee will monitor compliance. 

This agreement must also include the 

following language: ‘‘Warning: Any person 

who knowingly makes a false claim or 

statement to HUD or causes another to do so 

may be subject to civil or criminal penalties 

under 18 U.S.C. 2, 287, 1001 and 31 U.S.C. 

3729.’’ 

Policies and procedures of the grantee 

submitted to support the certification must 

provide that before the award of assistance, 

the grantee will use the best, most recent 

available data from FEMA, the Small 

Business Administration (SBA), insurers, and 

any other sources of local, state, and Federal 

sources of funding to prevent the duplication 

of benefits. 

(4) Timely expenditures. A grantee has 

adequate policies and procedures to 

determine timely expenditures if it submits 

policies and procedures that indicate the 

following to HUD: how it will track and 

document expenditures of the grantee and its 

subrecipients (both actual and projected 

reported in performance reports); how it will 

account for and manage program income; 

how it will reprogram funds in a timely 

manner for activities that are stalled; and 

how it will project expenditures of all CDBG– 

DR funds within the period provided for in 

section V.A. 

(5) Comprehensive disaster recovery 

website. A grantee has adequate policies and 

procedures to maintain a comprehensive 

accessible website if it submits policies and 

procedures indicating to HUD that the 

grantee will have a separate web page 

dedicated to its disaster recovery activities 

assisted with CDBG–DR funds that includes 

the information described at section 

III.D.1.d.–e. The procedures must also 

indicate the frequency of website updates. At 

minimum, grantees must update their 

website quarterly. 

(6) Procedures to detect and prevent fraud, 

waste, and abuse. A grantee has adequate 

procedures to detect and prevent fraud, 

waste, and abuse if it submits procedures that 

indicate: 

(a) How the grantee will verify the 

accuracy of information provided by 

applicants; 

(b) The criteria to be used to evaluate the 

capacity of potential subrecipients; 

(c) The frequency with which the grantee 

will monitor other agencies of the grantee 

that will administer CDBG–DR funds, and 

how it will monitor subrecipients, 

contractors, and other program participants, 

and why monitoring is to be conducted and 

which items are to be monitored; 

(d) It has or will hire an internal auditor 

that provides both programmatic and 

financial oversight of grantee activities, and 

has adopted policies that describes the 

auditor’s role in detecting fraud, waste, and 

abuse, which policies must be submitted to 

HUD; 

(e)(i) For states or grantees subject to the 

same requirements as states, a written 

standard of conduct and conflicts of interest 

policy that complies with the requirements of 

24 CFR 570.489(g) and (h) and subparagraph 

III.A.1.a(2)(a) of the Consolidated Notice, 

which policy includes the process for 

promptly identifying and addressing such 

conflicts; 

(ii) For units of general local government 

or grantees subject to the same requirements 

as units of general local government, a 

written standard of conduct and conflicts of 

interest policy that complies with 24 CFR 

570.611 and 2 CFR 200.318, as applicable, 

which includes the process for promptly 

identifying and addressing such conflicts; 

(iii) For Indian tribes, a written standard of 

conduct and conflicts of interest policy that 

complies with 24 CFR 1003.606, as 

applicable; and 

(f) It assists in investigating and taking 

action when fraud occurs within the 

grantee’s CDBG–DR activities and/or 

programs. All grantees receiving CDBG–DR 

funds for the first time shall attend and 

require subrecipients to attend fraud related 

training provided by HUD OIG, when offered, 

to assist in the proper management of CDBG– 

DR grant funds. Instances of fraud, waste, 

and abuse should be referred to the HUD OIG 

Fraud Hotline (phone: 1–800–347–3735 or 

email: hotline@hudoig.gov). 

Following a disaster, property owners and 

renters are frequently the targets of persons 

fraudulently posing as government 

employees, creditors, mortgage servicers, 

insurance adjusters, and contractors. The 

grantee’s procedures must address how the 

grantee will make CDBG–DR beneficiaries 

aware of the risks of contractor fraud and 

other potentially fraudulent activity that can 

occur in communities recovering from a 

disaster. Grantees must provide CDBG–DR 

beneficiaries with information that raises 

awareness of possible fraudulent activity, 

how the fraud can be avoided, and what local 

or state agencies to contact to take action and 

protect the grantee and beneficiary 

investment. The grantee’s procedures must 

address the steps it will take to assist a 

CDBG–DR beneficiary if the beneficiary 

experiences contractor or other fraud. If the 

beneficiary is eligible for additional 

assistance as a result of the fraudulent 

activity and the creation of remaining unmet 

need, the procedures must also address what 

steps the grantee will follow to provide the 

additional assistance. 

III.A.1.b. Relying on prior submissions— 

financial management and grant compliance 

certification requirements. This section only 

applies once a grantee has received a CDBG– 

DR grant through an Allocation 

Announcement Notice that makes the 

Consolidated Notice applicable. After that 

original grant, if a CDBG–DR grantee is 

awarded a subsequent CDBG–DR grant, HUD 

will rely on the grantee’s prior submissions 

provided in response to the Financial 

Management and Grant Compliance 

Certification Requirements in the 

Consolidated Notice. HUD will continue to 

monitor the grantee’s submissions and 

updates made to policies and procedures 

during the normal course of business. The 

grantee must notify HUD of any substantial 

changes made to these submissions. 

If a CDBG–DR grantee is awarded a 

subsequent CDBG–DR grant, and it has been 

more than three years since the executed 

grant agreement for the original CDBG–DR 

grant or a subsequent grant is equal to or 

greater than ten times the amount of the 

original CDBG–DR grant, grantees must 

update and resubmit the documentation 

required by paragraph III.A.1.a. with the 

completed Certification Checklist to enable 

the Secretary to certify that the grantee has 

in place proficient financial controls and 

procurement processes, and adequate 

procedures for proper grant management. 

However, the Secretary may require any 

CDBG–DR grantee to update and resubmit the 

documentation required by paragraph 

III.A.1.a., if there is good cause to require it. 

III.A.2. Implementation plan. HUD requires 

each grantee to demonstrate that it has 

sufficient capacity to manage the CDBG–DR 

funds and the associated risks. Grantees must 

evidence their management capacity through 

their implementation plan submissions. 

These submissions must meet the criteria 

below and must be submitted within 120 

days of the applicability date of the 

governing Allocation Announcement Notice 

or with the grantee’s submission of its action 

plan, whichever is earlier, unless the grantee 

has requested, and HUD has approved an 

extension of the submission deadline. 

III.A.2.a. To enable HUD to assess risk as 

described in 2 CFR 200.206, the grantee will 

submit an implementation plan to HUD. The 

implementation plan must describe the 

grantee’s capacity to carry out the recovery 


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and how it will address any capacity gaps. 

HUD will determine that the grantee has 

sufficient management capacity to adequately 

reduce risk if the grantee submits 

implementation plan documentation that 

addresses (1) through (3) below: 

(1) Capacity assessment. The grantee 

identifies the lead agency responsible for 

implementation of the CDBG–DR award and 

indicates that the head of that agency will 

report directly to the chief executive officer 

of the jurisdiction. The grantee has 

conducted an assessment of its capacity to 

carry out CDBG–DR recovery efforts and has 

developed a timeline with milestones 

describing when and how the grantee will 

address all capacity gaps that are identified. 

The assessment must include a list of any 

open CDBG–DR findings and an update on 

the corrective actions undertaken to address 

each finding. 

(2) Staffing. The grantee must submit an 

organizational chart of its department or 

division and must also provide a table that 

clearly indicates which personnel or 

organizational unit will be responsible for 

each of the Financial Management and Grant 

Compliance Certification Requirements 

identified in section III.A.1.a. along with staff 

contact information, if available (i.e., 

personnel responsible for conducting DOB 

analysis, timely expenditure, website 

management, monitoring and compliance, 

and financial management). The grantee must 

also submit documentation demonstrating 

that it has assessed staff capacity and 

identified positions for the purpose of: case 

management in proportion to the applicant 

population; program managers who will be 

assigned responsibility for each primary 

recovery area; staff who have demonstrated 

experience in housing, infrastructure (as 

applicable), and economic revitalization (as 

applicable); staff responsible for 

procurement/contract management, 

regulations implementing Section 3 of the 

Housing and Urban Development Act of 

1968, as amended (24 CFR part 75) (Section 

3), fair housing compliance, and 

environmental compliance. An adequate plan 

must also demonstrate that the internal 

auditor and responsible audit staff report 

independently to the chief elected or 

executive officer or board of the governing 

body of any designated administering entity. 

The grantee’s implementation plan must 

describe how it will provide technical 

assistance for any personnel that are not 

employed by the grantee at the time of action 

plan submission, and to fill gaps in 

knowledge or technical expertise required for 

successful and timely recovery. State 

grantees must also include how it plans to 

provide technical assistance to subgrantees 

and subrecipients, including units of general 

local government. 

(3) Internal and interagency coordination. 

The grantee’s plan must describe how it will 

ensure effective communication between 

different departments and divisions within 

the grantee’s organizational structure that are 

involved in CDBG–DR-funded recovery 

efforts, mitigation efforts, and environmental 

review requirements, as appropriate; between 

its lead agency and subrecipients responsible 

for implementing the grantee’s action plan; 

and with other local and regional planning 

efforts to ensure consistency. The grantee’s 

submissions must demonstrate how it will 

consult with other relevant government 

agencies, including the State Hazard 

Mitigation Officer (SHMO), State or local 

Disaster Recovery Coordinator, floodplain 

administrator, and any other state and local 

emergency management agencies, such as 

public health and environmental protection 

agencies, that have primary responsibility for 

the administration of FEMA or USACE funds. 

III.A.2.b. Relying on prior submissions— 

Implementation plan. This section only 

applies once a grantee has received a CDBG– 

DR grant through an Allocation 

Announcement Notice that makes the 

Consolidated Notice applicable. After that 

original grant, if a CDBG–DR grantee is 

awarded a subsequent CDBG–DR grant, HUD 

will rely on the grantee’s implementation 

plan submitted for its original CDBG–DR 

grant unless it has been more than three years 

since the executed grant agreement for the 

original CDBG–DR grant or the subsequent 

grant is equal to or greater than ten times the 

amount of its original CDBG–DR grant. 

If a CDBG–DR grantee is awarded a 

subsequent CDBG–DR grant, and it has been 

more than three years since the executed 

grant agreement for its original CDBG–DR 

grant or a subsequent grant is equal to or 

greater than ten times the amount of the 

original CDBG–DR grant, the grantee is to 

update and resubmit its implementation plan 

to reflect any changes to its capacity, staffing, 

and coordination. 

III.B. Administration, Planning, and 

Financial Management 

III.B.1. Grant administration and planning. 

III.B.1.a. Grantee responsibilities. Each 

grantee shall administer its award in 

compliance with all applicable laws and 

regulations and shall be financially 

accountable for the use of all awarded funds. 

CDBG–DR grantees must comply with the 

recordkeeping requirements of 24 CFR 

570.506 and 24 CFR 570.490, as amended by 

the Consolidated Notice waivers and 

alternative requirements. All grantees must 

maintain records of performance in DRGR, as 

described elsewhere in the Consolidated 

Notice. 

III.B.1.b. Grant administration cap. Up to 

five percent of the grant (plus five percent of 

program income generated by the grant) can 

be used for administrative costs by the 

grantee, units of general local government, or 

subrecipients. Thus, the total of all costs 

classified as administrative for a CDBG–DR 

grant must be less than or equal to the five 

percent cap (plus five percent of program 

income generated by the grant). The cap for 

administrative costs is subject to the 

combined technical assistance and 

administrative cap for state grantees as 

discussed in section III.B.2.a. 

III.B.1.c. Use of funds for administrative 

costs across multiple grants. The Additional 

Supplemental Appropriations for Disaster 

Relief Act, 2019 (Pub. L. 116–20) authorized 

special treatment for eligible administrative 

costs for grantees that received awards under 

Public Laws 114–113, 114–223, 114–254, 

115–31, 115–56, 115–123, 115–254, 116–20, 

or any future act. The Consolidated Notice 

permits grantees to use eligible 

administrative funds (up to five percent of 

each grant award plus up to five percent of 

program income generated by the grant) for 

the cost of administering any of these grants 

awarded under the identified Public Laws 

(including future Acts) without regard to the 

particular disaster appropriation from which 

such funds originated. To exercise this 

authority, the grantee must ensure that it has 

appropriate financial controls to guarantee 

that the amount of grant administration 

expenditures for each of the aforementioned 

grants will not exceed five percent of the 

total grant award for each grant (plus five 

percent of program income generated by the 

grant). The grantee must review and modify 

any financial management policies and 

procedures regarding the tracking and 

accounting of administration costs as 

necessary. 

III.B.1.d. Planning expenditures cap. Both 

state and local government grantees are 

limited to spending a maximum of fifteen 

percent of their total grant amount on 

planning costs. Planning costs subject to the 

15 percent cap are those defined in 42 U.S.C. 

5305(a)(12) and more broadly in 24 CFR 

570.205. 

III.B.2. State grantees only. 

III.B.2.a. Combined technical assistance 

and administrative cap (state grantees only). 

The provisions of 42 U.S.C. 5306(d) and 24 

CFR 570.489(a)(1)(i) and (iii), and 24 CFR 

570.489(a)(2) shall not apply to the extent 

that they cap administration and technical 

assistance expenditures, limit a state’s ability 

to charge a nominal application fee for grant 

applications for activities the state carries out 

directly, and require a dollar-for-dollar match 

of state funds for administrative costs 

exceeding $100,000. 42 U.S.C. 5306(d)(5) and 

(6) are waived and replaced with the 

alternative requirement that the aggregate 

total for administrative and technical 

assistance expenditures must not exceed five 

percent of the grant, plus five percent of 

program income generated by the grant. 

III.B.2.b. Planning-only activities (state 

grantees only). The State CDBG Program 

requires that, for planning-only grants, local 

government grant recipients must document 

that the use of funds meets a national 

objective. In the CDBG Entitlement Program, 

these more general planning activities are 

presumed to meet a national objective under 

the requirements at 24 CFR 570.208(d)(4). 

HUD notes that almost all effective recoveries 

in the past have relied on some form of areawide or comprehensive planning activity to 

guide overall redevelopment independent of 

the ultimate source of implementation funds. 

To assist state grantees, HUD is waiving the 

requirements at 24 CFR 570.483(b)(5) and 

(c)(3), which limit the circumstances under 

which the planning activity can meet a lowand moderate-income or slum-and-blight 

national objective. Instead, as an alternative 

requirement, 24 CFR 570.208(d)(4) applies to 

states when funding disaster recoveryassisted, planning-only grants, or when 

directly administering planning activities 

that guide disaster recovery. In addition, 42 

U.S.C. 5305(a)(12) is waived to the extent 

necessary so the types of planning activities 


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that states may fund or undertake are 

expanded to be consistent with those of 

CDBG Entitlement grantees identified at 24 

CFR 570.205. 

III.B.2.c. Direct grant administration and 

means of carrying out eligible activities (state 

grantees only). Requirements at 42 U.S.C. 

5306(d) are waived to allow a state to use its 

disaster recovery grant allocation directly to 

carry out state-administered activities eligible 

under the Consolidated Notice, rather than 

distribute all funds to local governments. 

Pursuant to this waiver and alternative 

requirement, the standard at 24 CFR 

570.480(c) and the provisions at 42 U.S.C. 

5304(e)(2) will also include activities that the 

state carries out directly. Activities eligible 

under the Consolidated Notice may be 

carried out by a state, subject to state law and 

consistent with the requirement of 24 CFR 

570.200(f), through its employees, through 

procurement contracts, or through assistance 

provided under agreements with 

subrecipients. State grantees continue to be 

responsible for civil rights, labor standards, 

and environmental protection requirements, 

for compliance with 24 CFR 570.489(g) and 

(h), and subparagraph III.A.1.a.(2)(a) of the 

Consolidated Notice relating to conflicts of 

interest, and for compliance with 24 CFR 

570.489(m) relating to monitoring and 

management of subrecipients. 

A state grantee may also carry out activities 

in tribal areas. A state must coordinate with 

the Indian tribe with jurisdiction over the 

tribal area when providing CDBG–DR 

assistance to beneficiaries in tribal areas. 

State grantees carrying out projects in tribal 

areas, either directly or through its 

employees, through procurement contracts, 

or through assistance provided under 

agreements with subrecipients, must obtain 

the consent of the Indian tribe with 

jurisdiction over the tribal area to allow the 

state grantee to carry out or to fund CDBG– 

DR projects in the area. 

III.B.2.d. Waiver and alternative 

requirement for distribution to CDBG 

metropolitan cities and urban counties (state 

grantees only). 42 U.S.C. 5302(a)(7) 

(definition of ‘‘nonentitlement area’’) and 

related provisions of 24 CFR part 570, 

including 24 CFR 570.480, are waived to 

permit state grantees to distribute CDBG–DR 

funds to units of local government and 

Indian tribes. 

III.B.2.e. Use of subrecipients (state 

grantees only). Paragraph III.B.2.c. provides a 

waiver and alternative requirement that a 

state may carry out activities directly, 

including through assistance provided under 

agreements with subrecipients. Therefore, 

when states carry out activities directly 

through subrecipients, the following 

alternative requirements apply: the state is 

subject to the definition of subrecipients at 

24 CFR 570.500(c) and must adhere to the 

requirements for agreements with 

subrecipients at 24 CFR 570.503. 

Additionally, 24 CFR 570.503(b)(4) is 

modified to require the subrecipient to 

comply with applicable uniform 

requirements, as described in 24 CFR 

570.502, except that the subrecipient shall 

follow procurement requirements imposed 

by the state in accordance with subparagraph 

III.A.1.a.(2) of the Consolidated Notice. When 

24 CFR 570.503 applies, notwithstanding 24 

CFR 570.503(b)(5)(i), units of general local 

government that are subrecipients are 

defined as recipients under 24 CFR part 58 

and are therefore responsible entities that 

assume environmental review 

responsibilities, as described in III.F.5. 

Grantees are reminded that they are 

responsible for providing on-going oversight 

and monitoring of subrecipients and are 

ultimately responsible for subrecipient 

compliance with all CDBG–DR requirements. 

III.B.2.f. Recordkeeping (state grantees 

only). When a state carries out activities 

directly, 24 CFR 570.490(b) is waived and the 

following alternative provision shall apply: a 

state grantee shall establish and maintain 

such records as may be necessary to facilitate 

review and audit by HUD of the state’s 

administration of CDBG–DR funds, under 24 

CFR 570.493 and reviews and audits by the 

state under III.B.2.h. Consistent with 

applicable statutes, regulations, waivers and 

alternative requirements, and other Federal 

requirements, the content of records 

maintained by the state shall be sufficient to: 

(a) enable HUD to make the applicable 

determinations described at 24 CFR 570.493; 

(b) make compliance determinations for 

activities carried out directly by the state; 

and (c) show how activities funded are 

consistent with the descriptions of activities 

proposed for funding in the action plan and/ 

or DRGR system. For fair housing and equal 

opportunity purposes, and as applicable, 

such records shall include data on the racial, 

ethnic, and gender characteristics of persons 

who are applicants for, participants in, or 

beneficiaries of the program. 

III.B.2.g. Change of use of real property 

(state grantees only). This alternative 

requirement conforms the change of use of 

real property rule to the waiver allowing a 

state to carry out activities directly. For 

purposes of these grants, all references to 

‘‘unit of general local government’’ in 24 CFR 

570.489(j), shall be read as ‘‘state, local 

governments, or Indian tribes (either as 

subrecipients or through a method of 

distribution), or other state subrecipient.’’ 

III.B.2.h. Responsibility for review and 

handling of noncompliance (state grantees 

only). This change is in conformance with 

the waiver allowing a state to carry out 

activities directly. 24 CFR 570.492 is waived, 

and the following alternative requirement 

applies for any state receiving a direct award: 

the state shall make reviews and audits, 

including on-site reviews of any local 

governments or Indian tribes (either as 

subrecipients or through a method of 

distribution) designated public agencies, and 

other subrecipients, as may be necessary or 

appropriate to meet the requirements of 

section 104(e)(2) of the HCDA, as amended, 

and as modified by the Consolidated Notice. 

In the case of noncompliance with these 

requirements, the state shall take such 

actions as may be appropriate to prevent a 

continuance of the deficiency, mitigate any 

adverse effects or consequences, and prevent 

a recurrence. The state shall establish 

remedies for noncompliance by any 

subrecipients, designated public agencies, or 

local governments. 

III.B.2.i. Consultation (state grantees only). 

Currently, the HCDA and regulations require 

a state grantee to consult with affected local 

governments in nonentitlement areas of the 

state in determining the state’s proposed 

method of distribution. HUD is waiving 42 

U.S.C. 5306(d)(2)(C)(iv), 42 U.S.C. 

5306(d)(2)(D), 24 CFR 91.325(b)(2), and 24 

CFR 91.110, and imposing an alternative 

requirement that states receiving an 

allocation of CDBG–DR funds consult with 

all disaster-affected local governments 

(including any CDBG-entitlement grantees), 

Indian tribes, and any public housing 

authorities in determining the use of funds. 

This approach ensures that a state grantee 

sufficiently assesses the recovery needs of all 

areas affected by the disaster. 

III.C. Action Plan for Disaster Recovery 

Waiver and Alternative Requirement 

Requirements for CDBG actions plans, 

located at 42 U.S.C. 5304(a)(1), 42 U.S.C. 

5304(m), 42 U.S.C. 5306(a)(1), 42 U.S.C. 

5306(d)(2)(C)(iii), 42 U.S.C. 12705(a)(2), and 

24 CFR 91.220 and 91.320, are waived for 

CDBG–DR grants. Instead, grantees must 

submit to HUD an action plan for disaster 

recovery which will describe programs and 

activities that conform to applicable 

requirements as specified in the Consolidated 

Notice and the applicable Allocation 

Announcement Notice. HUD will monitor the 

grantee’s actions and use of funds for 

consistency with the plan, as well as meeting 

the performance and timeliness objectives 

therein. The Secretary will disapprove all 

action plans that are substantially incomplete 

if it is determined that the plan does not 

satisfy all of the required elements identified 

in the Consolidated Notice and the 

applicable Allocation Announcement Notice. 

III.C.1. Action plan. The grantee’s action 

plan must identify the use of all funds— 

including criteria for eligibility and how the 

uses address long-term recovery needs, 

restoration of infrastructure and housing, 

economic revitalization, and the 

incorporation of mitigation measures in the 

MID areas. HUD created the Public Action 

Plan in DRGR which is a function that allows 

grantees to develop and submit their action 

plans for disaster recovery directly into 

DRGR. Grantees must use HUD’s Public 

Action Plan in DRGR to develop all CDBG– 

DR action plans and substantial amendments 

submitted to HUD for approval. The Public 

Action Plan is different from the DRGR 

Action Plan, which is a comprehensive 

description of projects and activities in 

DRGR. 

The grantee must describe the steps it will 

follow to make the action plan, substantial 

amendments, performance reports, and other 

relevant program materials available in a 

form accessible to persons with disabilities 

and those with limited English proficiency 

(LEP). All grantees must include sufficient 

information in its action plan so that all 

interested parties will be able to understand 

and comment on the action plan. The action 

plan (and subsequent amendments) must 

include a single chart or table that illustrates, 

at the most practical level, how all funds are 

budgeted (e.g., by program, subrecipient, 

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category). The grantee must certify, as 

required by section III.F.7., that activities to 

be undertaken with CDBG–DR funds are 

consistent with its action plan. 

The action plan must contain: 

III.C.1.a. An impact and unmet needs 

assessment. Each grantee must develop an 

impact and unmet needs assessment to 

understand the type and location of 

community needs and to target limited 

resources to those areas with the greatest 

need. CDBG–DR grantees must conduct an 

impact and unmet needs assessment to 

inform the use of the grant. Grantees must 

cite data sources in the impact and unmet 

needs assessment. At a minimum, the impact 

and unmet needs assessment must: 

• Evaluate all aspects of recovery 

including housing (interim and permanent, 

owner and rental, single family and 

multifamily, affordable and market rate, and 

housing to meet the needs of persons who 

were experiencing homelessness predisaster), infrastructure, and economic 

revitalization needs, while also incorporating 

mitigation needs into activities that support 

recovery as required in section II.A.2.; 

• Estimate unmet needs to ensure CDBG– 

DR funds meet needs that are not likely to 

be addressed by other sources of funds by 

accounting for the various forms of assistance 

available to, or likely to be available to, 

affected communities (e.g., projected FEMA 

funds) and individuals (e.g., estimated 

insurance) and, using the most recent 

available data, estimating the portion of need 

unlikely to be addressed by insurance 

proceeds, other Federal assistance, or any 

other funding sources; 

• Assess whether public services (e.g., 

housing counseling, legal advice and 

representation, job training, mental health, 

and general health services) are necessary to 

complement activities intended to address 

housing, infrastructure, and economic 

revitalization and how those services would 

need to be made accessible to individuals 

with disabilities including, but not limited 

to, mobility, sensory, developmental, 

emotional, cognitive, and other impairments; 

• Describe the extent to which 

expenditures for planning activities, 

including the determination of land use goals 

and policies, will benefit the HUD-identified 

MID areas, as described in section II.A.3.; 

• Describe disaster impacts geographically 

by type at the lowest level practicable (e.g., 

county/parish level or lower if available for 

states, and neighborhood or census tract level 

for cities); and 

• Take into account the costs and benefits 

of incorporating hazard mitigation measures 

to protect against the specific identified 

impacts of future extreme weather events and 

other natural hazards. This analysis should 

factor in historical and projected data on risk 

that incorporates best available science (e.g., 

the most recent National Climate 

Assessment). 

Disaster recovery needs evolve over time 

and grantees must amend the impact and 

unmet needs assessment and action plan as 

additional needs are identified and 

additional resources become available. At a 

minimum, grantees must revisit and update 

the impact and unmet needs assessment 

when moving funds from one program to 

another through a substantial amendment. 

III.C.1.b. Connection of programs and 

projects to unmet needs. The grantee must 

describe the connection between identified 

unmet needs and the allocation of CDBG–DR 

resources. The plan must provide a clear 

connection between a grantee’s impact and 

unmet needs assessment and its proposed 

programs and projects in the MID areas (or 

outside in connection to the MID areas as 

described in section II.A.3). Such description 

must demonstrate a reasonably proportionate 

allocation of resources relative to areas and 

categories (i.e., housing, economic 

revitalization, and infrastructure) of greatest 

needs identified in the grantee’s impact and 

unmet needs assessment or provide an 

acceptable justification for a disproportional 

allocation, while also incorporating hazard 

mitigation measures to reduce the impacts of 

recurring natural disasters and the long-term 

impacts of climate change. Grantee action 

plans may provide for the allocation of funds 

for administration and planning activities 

and for public service activities, subject to 

the caps on such activities as described in the 

Consolidated Notice. 

III.C.1.c. Public housing, affordable rental 

housing, and housing for vulnerable 

populations. Each grantee must include a 

description of how it has analyzed, 

identified, and will address (with CDBG–DR 

or other sources) the disaster-related 

rehabilitation, reconstruction, and new 

construction needs in the MID-area of the 

types of housing described below. 

Specifically, a grantee must assess and 

describe how it will address unmet needs in 

the following types of housing, subject to the 

applicable HUD program requirements: 

public housing, affordable rental housing 

(including both subsidized and market rate 

affordable housing), and housing for 

vulnerable populations (See Section 

III.C.1.c.iii below), including emergency 

shelters and permanent housing for persons 

experiencing homelessness, in the areas 

affected by the disaster. Grantees must 

coordinate with local public housing 

authorities (PHA) in the MID areas to ensure 

that the grantee’s representation in the action 

plan reflects the input of those entities as 

well as coordinating with State Housing 

Finance agencies to make sure that all 

funding sources that are available and 

opportunities for leverage are noted in the 

action plan. 

(i) Public housing: Describe unmet public 

housing needs of each disaster-impacted 

PHA within its jurisdiction, if applicable. 

The grantee must work directly with 

impacted PHAs in identifying necessary and 

reasonable costs and ensuring that adequate 

funding from all available sources is 

dedicated to addressing the unmet needs of 

damaged public housing (e.g., FEMA, 

insurance, and funds available from 

programs administered by HUD’s Office of 

Public and Indian Housing). 

(ii) Affordable rental housing: Describe 

unmet affordable rental housing needs for 

LMI households as a result of the disaster or 

exacerbated by the disaster, including private 

market units receiving project-based rental 

assistance or with tenants that participate in 

the Section 8 Housing Choice Voucher 

Program, and any other housing that is 

assisted under a HUD program in the MID 

areas. Identify funding to specifically address 

these unmet needs for affordable rental 

housing to LMI households. If a grantee is 

proposing an allocation of CDBG–DR funds 

for affordable rental housing needs, the 

action plan must, at a minimum, meet the 

requirements described in II.B.3. 

(iii) Housing for vulnerable populations: 

Describe how CDBG–DR or other funding 

sources available will promote housing for 

vulnerable populations, as defined in section 

III.C.1.d., in the MID area, including how it 

plans to address: (1) transitional housing, 

including emergency shelters and housing for 

persons experiencing homelessness, 

permanent supportive housing, and 

permanent housing needs of individuals and 

families (including subpopulations) that are 

experiencing or at risk of experiencing 

homelessness; (2) the prevention of lowincome individuals and families with 

children (especially those with incomes 

below thirty percent of the area median) from 

becoming homeless; (3) the special needs of 

persons who are not experiencing 

homelessness but require supportive housing 

(i.e., elderly, frail elderly, persons with 

disabilities (mental, physical, developmental, 

etc.), victims of domestic violence, persons 

with alcohol or other substance-use disorder, 

persons with HIV/AIDS and their families, 

and public housing residents, as identified in 

24 CFR 91.315(e)). 

III.C.1.d. Fair housing, civil rights data, 

and advancing equity. 

The grantee must use its CDBG–DR funds 

in a manner that complies with its fair 

housing and nondiscrimination obligations, 

including title VI of the Civil Rights Act of 

1964, 42 U.S.C. 2000d et seq., the Fair 

Housing Act, 42 U.S.C. 3601–19, Section 504 

of the Rehabilitation Act of 1973, 29 U.S.C. 

794, the Americans with Disabilities Act of 

1990, 42 U.S.C. 12131 et seq., and Section 

109 of the HCDA, 42 U.S.C. 5309. To ensure 

that the activities performed in connection 

with the action plan will comply with these 

requirements, the grantee must provide an 

assessment of whether its planned use of 

CDBG–DR funds will have an unjustified 

discriminatory effect on or failure to benefit 

racial and ethnic minorities in proportion to 

their communities’ needs, particularly in 

racially and ethnically concentrated areas of 

poverty, and how it will address the recovery 

needs of impacted individuals with 

disabilities. 

Grantees should also consider the impact 

of their planned use of CDBG–DR funds on 

other protected class groups under fair 

housing and civil rights laws, vulnerable 

populations, and other historically 

underserved communities. For purposes of 

the Consolidated Notice, HUD defines 

vulnerable populations as a group or 

community whose circumstances present 

barriers to obtaining or understanding 

information or accessing resources. In the 

action plan, grantees should identify those 

populations (i.e., which protected class, 

vulnerable population, and historically 

underserved groups were considered) and 

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from the activities set forth in the plan 

consistent with the civil rights requirements 

set forth above. 

To perform such an assessment, grantees 

must include data for the HUD-identified and 

grantee-identified MID areas that identifies 

the following information, as it is available: 

• Racial and ethnic make-up of the 

population, including relevant subpopulations depending on activities and 

programs outlined in the plan (this would 

include renters and homeowners if eligibility 

is dependent on housing tenure) and the 

specific sub- geographies in the MID areas in 

which those programs and activities will be 

carried out; 

• LEP populations, including number and 

percentage of each identified group; 

• Number and percentage of persons with 

disabilities; 

• Number and percentage of persons 

belonging to Federally protected classes 

under the Fair Housing Act (race, color, 

national origin, religion, sex—which 

includes sexual orientation and gender 

identity—familial status, and disability) and 

other vulnerable populations as determined 

by the grantee; 

• Indigenous populations and tribal 

communities, including number and 

percentage of each identified group; 

• Racially and ethnically concentrated 

areas and concentrated areas of poverty; and 

• Historically distressed and underserved 

communities; 

Grantees must explain how the use of 

funds will reduce barriers that individuals 

may face when enrolling in and accessing 

CDBG–DR assistance, for example, barriers 

imposed by a lack of outreach to their 

community or by the lack of information in 

non-English languages or accessible formats 

for individuals with different types of 

disabilities. 

Grantees are strongly encouraged to 

include examples of how their proposed 

allocations, selection criteria, and other 

actions can be expected to advance equity for 

protected class groups. Grantees are strongly 

encouraged to explain and provide examples 

of how their actions can be expected to 

advance the following objectives: 

• Equitably benefit protected class groups 

in the MID areas, including racial and ethnic 

minorities, and sub geographies in the MID 

areas in which residents belonging to such 

groups are concentrated; 

• To the extent consistent with purposes 

and uses of CDBG–DR funds, overcome prior 

disinvestment in infrastructure and public 

services for protected class groups, and areas 

in which residents belonging to such groups 

are concentrated, when addressing unmet 

needs; 

• Enhance for individuals with disabilities 

in the MID areas (a) the accessibility of 

disaster preparedness, resilience, or recovery 

services, including the accessibility of 

evacuation services and shelters; (b) the 

provision of critical disaster-related 

information in accessible formats; and/or (c) 

the availability of integrated, accessible 

housing and supportive services. 

Grantees must identify the proximity of 

natural and environmental hazards (e.g., 

industrial corridors, sewage treatment 

facilities, waterways, EPA superfund sites, 

brownfields, etc.) to affected populations in 

the MID area, including members of 

protected classes, vulnerable populations, 

and underserved communities and explore 

how CDBG–DR activities may mitigate 

environmental concerns and increase 

resilience among these populations to protect 

against the effects of extreme weather events 

and other natural hazards. 

Grantees must also describe how their use 

of CDBG–DR funds is consistent with their 

obligation to affirmatively further fair 

housing. HUD regulations at 24 CFR 5.151 

provide that affirmatively furthering fair 

housing means taking meaningful actions, in 

addition to combating discrimination, that 

overcome patterns of segregation and foster 

inclusive communities free from barriers that 

restrict access to opportunity based on 

protected characteristics. Specifically, 

affirmatively furthering fair housing means 

taking meaningful actions that, taken 

together, address significant disparities in 

housing needs and in access to opportunity, 

replacing segregated living patterns with 

truly integrated and balanced living patterns, 

transforming racially or ethnically 

concentrated areas of poverty into areas of 

opportunity, and fostering and maintaining 

compliance with civil rights and fair housing 

laws. 

State and local government grantees must 

submit a certification to AFFH in accordance 

with 24 CFR 5.150, et seq. CDBG–DR grantees 

must also comply with the recordkeeping 

requirements of 24 CFR 570.506 and 

570.490(b), as amended by the Consolidated 

Notice. 

III.C.1.e. Infrastructure. In its action plan, 

each grantee must include a description of 

how it plans to meet the requirements of the 

Consolidated Notice, including how it will: 

promote sound, sustainable long-term 

recovery planning as described in this 

section; adhere to the elevation requirements 

established in section II.C.2.; and coordinate 

with local and regional planning efforts as 

described in section III.B.2.i and III.D.1.a. All 

infrastructure investments must be designed 

and constructed to withstand chronic stresses 

and extreme events by identifying and 

implementing resilience performance metrics 

as described in section II.A.2.c. 

If a grantee is allocating funds for 

infrastructure, its description must include: 

(1) How it will address the construction or 

rehabilitation of disaster-related systems 

(e.g., storm water management systems) or 

other disaster-related community-based 

mitigation systems (e.g., using FEMA’s 

community lifelines). State grantees carrying 

out infrastructure activities must work with 

units of general local government and Indian 

tribes in the MID areas to identify the unmet 

needs and associated costs of needed 

disaster-related infrastructure improvements; 

(2) How mitigation measures and strategies 

to reduce natural hazard risks, including 

climate-related risks, will be integrated into 

rebuilding activities; 

(3) The extent to which CDBG–DR funded 

infrastructure activities will achieve 

objectives outlined in regionally or locally 

established plans and policies that are 

designed to reduce future risk to the 

jurisdiction; 

(4) How the grantee will evaluate the costs 

and benefits in selecting infrastructure 

projects to assist with CDBG–DR funds; 

(5) How the grantee will align 

infrastructure investments with other 

planned federal, state, or local capital 

improvements and infrastructure 

development efforts, and will work to foster 

the potential for additional infrastructure 

funding from multiple sources, including 

state and local capital improvement projects 

in planning, and the potential for private 

investment; 

(6) How the grantee will employ adaptable 

and reliable technologies to prevent 

premature obsolescence of infrastructure; and 

(7) How the grantee will invest in 

restoration of infrastructure and related longterm recovery needs within historically 

underserved communities that lacked 

adequate investments in housing, 

transportation, water, and wastewater 

infrastructure prior to the disaster. 

III.C.1.f. Minimize Displacement. A 

description of how the grantee plans to 

minimize displacement of persons or entities, 

and assist any persons or entities displaced, 

and ensure accessibility needs of displaced 

persons with disabilities. Specifically, 

grantees must detail how they will meet the 

Residential Anti-displacement and 

Relocation Assistance Plan (RARAP) 

requirements in section IV.F.7. Grantees must 

indicate to HUD whether they will be 

amending an existing RARAP or creating a 

new RARAP specific to CDBG–DR. Grantees 

must meet the requirements related to the 

RARAP prior to implementing any activity 

with CDBG–DR grant funds, such as buyouts 

and other disaster recovery activities. 

Grantees must seek to minimize 

displacement or adverse impacts from 

displacement, consistent with the 

requirements of Section IV.F of the 

Consolidated Notice, Section 104(d) of the 

HCDA (42 U.S.C. 5304(d)) and implementing 

regulations at 24 CFR part 42, and 24 CFR 

570.488 or 24 CFR 570.606, as applicable. 

Grantees must describe how they will plan 

and budget for relocation activities in the 

action plan. 

III.C.1.g. Allocation and award caps. The 

grantee must provide a budget for the full 

amount of the allocation that is reasonably 

proportionate to its unmet needs (or provide 

an acceptable justification for disproportional 

allocation) and is consistent with the 

requirements to integrate hazard mitigation 

measures into all its programs and projects. 

The grantee shall provide a description of 

each disaster recovery program or activity to 

be funded, including the CDBG–DR eligible 

activities and national objectives associated 

with each program and the eligibility criteria 

for assistance. The grantee shall also describe 

the maximum amount of assistance (i.e., 

award cap) available to a beneficiary under 

each of the grantee’s disaster recovery 

programs. A grantee may find it necessary to 

provide exceptions on a case-by-case basis to 

the maximum amount of assistance and must 

describe the process it will use to make such 

exceptions in its action plan. At a minimum, 

each grantee must adopt policies and 

procedures that communicate how it will 

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exception is needed and how it will 

demonstrate that the amount of assistance is 

necessary and reasonable. Each grantee must 

also indicate in its action plan that it will 

make exceptions to the maximum award 

amounts when necessary, to comply with 

federal accessibility standards or to 

reasonably accommodate a person with 

disabilities. 

III.C.1.h. Cost controls and warranties. The 

grantee must provide a description of the 

standards to be established for construction 

contractors performing work in the 

jurisdiction and the mechanisms to be used 

by the grantee to assist beneficiaries in 

responding to contractor fraud, poor quality 

work, and associated issues. Grantees must 

require a warranty period post-construction 

with a formal notification to beneficiaries on 

a periodic basis (e.g., 6 months and one 

month before expiration date of the 

warranty). Each grantee must also describe its 

controls for assuring that construction costs 

are reasonable and consistent with market 

costs at the time and place of construction. 

III.C.1.i. Resilience planning. Resilience is 

defined as a community’s ability to minimize 

damage and recover quickly from extreme 

events and changing conditions, including 

natural hazard risks. At a minimum, the 

grantee’s action plan must contain a 

description of how the grantee will: (a) 

emphasize high quality design, durability, 

energy efficiency, sustainability, and mold 

resistance; (b) support adoption and 

enforcement of modern and/or resilient 

building codes that mitigate against natural 

hazard risks, including climate-related risks 

(e.g., sea level rise, high winds, storm surge, 

flooding, volcanic eruption, and wildfire risk, 

where appropriate and as may be identified 

in the jurisdiction’s rating and identified 

weaknesses (if any) in building code 

adoption using FEMA’s Nationwide Building 

Code Adoption Tracking (BCAT) portal), and 

provide for accessible building codes and 

standards, as applicable; (c) establish and 

support recovery efforts by funding feasible, 

cost-effective measures that will make 

communities more resilient against a future 

disaster; (d) make land-use decisions that 

reflect responsible and safe standards to 

reduce future natural hazard risks, e.g., by 

adopting or amending an open space 

management plan that reflects responsible 

floodplain and wetland management and 

takes into account continued sea level rise, 

if applicable, and (e) increase awareness of 

the hazards in their communities (including 

for members of protected classes, vulnerable 

populations, and underserved communities) 

through outreach to the MID areas. 

While the purpose of CDBG–DR funds is to 

recover from a Presidentially declared 

disaster, integrating hazard mitigation and 

resilience planning with recovery efforts will 

promote a more resilient and sustainable 

long-term recovery. The action plan must 

include a description of how the grantee will 

promote sound, sustainable long-term 

recovery planning informed by a postdisaster evaluation of hazard risk, including 

climate-related natural hazards and the 

creation of resilience performance metrics as 

described in paragraph II.A.2.c. of the 

Consolidated Notice. This information 

should be based on the history of FEMA and 

other federally-funded disaster mitigation 

efforts and, as appropriate, take into account 

projected increases in sea level, the 

frequency and intensity of extreme weather 

events, and worsening wildfires. Grantees 

must use the FEMA-approved Hazard 

Mitigation Plan (HMP), Community Wildfire 

Protection Plan (CWPP), or other resilience 

plans to inform the evaluation, and it should 

be referenced in the action plan. 

III.C.2. Additional action plan 

requirements for states. For state grantees, 

the action plan must describe how the 

grantee will distribute grant funds, either 

through specific programs and projects the 

grantee will carry out directly (through 

employees, contractors, or through 

subrecipients), or through a method of 

distribution of funds to local governments 

and Indian tribes (as permitted by III.B.2.d.). 

The grantee shall describe how the method 

of distribution to local governments or Indian 

tribes, or programs/projects carried out 

directly, will result in long-term recovery 

from specific impacts of the disaster. 

All states must include in their action plan 

the information outlined in (1) through (7) 

below (in addition to other information 

required by section III.C.). For states using a 

method of distribution, if some required 

information is unknown when the grantee is 

submitting its action plan to HUD (e.g., the 

list of programs or activities required by 

III.C.1.g. or the projected use of CDBG–DR 

funds by responsible entity as required by 

subparagraph (5) below), the grantee must 

update the action plan through a substantial 

amendment once the information is known. 

If necessary to comply with a statutory 

requirement that a grantee shall submit a 

plan detailing the proposed use of all funds 

prior to HUD’s obligation of grant funds, 

HUD may obligate only a portion of grant 

funds until the substantial amendment 

providing the required information is 

submitted and approved by HUD. 

(1) How the impact and unmet needs 

assessment informs funding determinations, 

including the rationale behind the decision(s) 

to provide funds to most impacted and 

distressed areas. 

(2) When funds are subgranted to local 

governments or Indian tribes (either as 

subrecipients or through a method of 

distribution), all criteria used to allocate and 

award the funds including the relative 

importance of each criterion (including any 

priorities). If the criteria are unknown when 

the grantee is submitting the initial action 

plan to HUD, the grantee must update the 

action plan through a substantial amendment 

once the information is known. The 

substantial amendment must be submitted 

and approved before distributing the funds to 

a local government or Indian tribe. 

(3) How the distribution and selection 

criteria will address disaster-related unmet 

needs in a manner that does not have an 

unjustified discriminatory effect based on 

race or other protected class and ensure the 

participation of minority residents and those 

belonging to other protected class groups in 

the MID areas. Such description should 

include an assessment of who may be 

expected to benefit, the timing of who will 

be prioritized, and the amount or proportion 

of benefits expected to be received by 

different communities or groups (e.g., the 

proportion of benefits going to different 

locations within the MID or to homeowners 

versus renters). 

(4) The threshold factors and recipient or 

beneficiary grant size limits that are to be 

applied. 

(5) The projected uses for the CDBG–DR 

funds, by responsible entity, activity, and 

geographic area. 

(6) For each proposed program and/or 

activity, its respective CDBG activity 

eligibility category (or categories), national 

objective(s), and what disaster-related impact 

is addressed, as described in section II.A.1. 

(7) When applications are solicited for 

programs carried out directly, all criteria 

used to select applications for funding, 

including the relative importance of each 

criterion, and any eligibility requirements. If 

the criteria are unknown when the grantee is 

submitting the initial action plan to HUD, the 

grantee must update the action plan through 

a substantial amendment once the 

information is known. The substantial 

amendment must be submitted and approved 

before selecting applications. 

III.C.3. Additional action plan 

requirements for local governments. For local 

governments grantees, the action plan shall 

describe specific programs and/or activities 

they will carry out. The action plan must also 

describe: 

(1) How the impact and unmet needs 

assessment informs funding determinations, 

including the rationale behind the decision(s) 

to provide funds to most impacted and 

distressed areas. 

(2) All criteria used to select applications 

(including any priorities), including the 

relative importance of each criterion, and any 

eligibility requirements. If the criteria are 

unknown when the grantee is submitting the 

initial action plan to HUD, the grantee must 

update the action plan through a substantial 

amendment once the information is known. 

The substantial amendment must be 

submitted and approved before selecting 

applications. 

(3) How the distribution and selection 

criteria will address disaster-related unmet 

needs in a manner that does not have an 

unjustified discriminatory effect and ensures 

the participation of minority residents and 

those belonging to other protected class 

groups in the MID areas, including with 

regards to who may benefit, the timing of 

who will be prioritized, and the amount or 

proportion of benefits expected to be 

received by different communities or groups 

(e.g., the proportion of benefits going to 

different locations within the MID or to 

homeowners versus renters). 

(4) The threshold factors and grant size 

limits that are to be applied. 

(5) The projected uses for the CDBG–DR 

funds, by responsible entity, activity, and 

geographic area. 

(6) For each proposed program and/or 

activity, its respective CDBG activity 

eligibility category (or categories), national 

objective(s), and what disaster-related impact 

is addressed, as described in section II.A.1. 

of the Consolidated Notice. 


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III.C.4. Waiver of 45-day review period for 

CDBG–DR action plans to 60 days. HUD may 

disapprove an action plan or substantial 

action plan amendment if it is incomplete. 

HUD works with grantees to resolve or 

provide additional information during the 

review period to avoid the need to 

disapprove an action plan or substantial 

action plan amendments. There are several 

issues related to the action plan as submitted 

that can be fully resolved via further 

discussion and revision during an extended 

review period, rather than through HUD 

disapproval of the plan, which in turn would 

require grantees to take additional time to 

revise and resubmit their respective plan. 

Therefore, the Secretary has determined that 

good cause exists and waives 24 CFR 

91.500(a) to extend HUD’s action plan review 

period from 45 days to 60 days. 

The action plan (including SF–424 and 

certifications) must be submitted to HUD for 

review and approval using DRGR. By 

submitting required standard forms (that 

must be submitted with the action plan), the 

grantee is providing assurances that it will 

comply with statutory requirements, 

including, but not limited to civil rights 

requirements. Applicants and recipients are 

required to submit assurances of compliance 

with federal civil rights requirements. A 

grantee will use DRGR’s upload function to 

include the SF 424 (including SF 424B and 

SF 424D, as applicable) and certifications 

with its action plan. Grantees receiving an 

allocation are required to submit an action 

plan within 120 days of the applicability date 

of the Allocation Announcement Notice, 

unless the grantee has requested, and HUD 

has approved an extension of the submission 

deadline. HUD will then review each action 

plan within 60 days from the date of receipt. 

During its review, HUD typically provides 

grantees with comments on the submitted 

plan to avoid the need to disapprove an 

action plan and offers a grantee the 

opportunity to make updates to the action 

plan during the first forty-five days of HUD’s 

initial sixty-day review period. If a grantee 

wants to make updates to the action plan, 

HUD will reject the Public Action Plan in 

DRGR to return the plan to the grantee. Then, 

once the grantee resubmits the plan, HUD 

reviews the revised plan within the initial 

sixty-day period. HUD is establishing an 

alternative process that offers a grantee the 

option to voluntarily provide a revised action 

plan, updated to respond to HUD’s 

comments, no later than day forty-five in 

HUD’s sixty-day review. A grantee is not 

required to participate in the revisions of the 

action plan during this time, but with the 

understanding that an action plan may be 

determined to be substantially incomplete. 

The Secretary may disapprove an action plan 

as substantially incomplete if HUD 

determines that the action plan does not meet 

the requirements of the Consolidated Notice 

and the applicable Allocation Announcement 

Notice. 

III.C.5. Obligation and expenditure of 

funds. Once HUD approves the action plan 

and approves certifications if required by 

appropriations acts, it will then sign a grant 

agreement obligating allocated funds to the 

grantee. The grantee will continue the action 

plan process in DRGR to draw funds (see 

section V.C.1.). 

The grantee must meet the applicable 

environmental requirements before the use or 

commitment of funds for each activity. After 

the Responsible Entity (1) completes 

environmental review(s) pursuant to 24 CFR 

part 58 and receives from HUD an approved 

Request for Release of Funds and 

certification (as applicable), or (2) adopts 

another Federal agency’s environmental 

review, approval, or permit and receives from 

HUD (or the state) an approved Request for 

Release of Funds and certification (as 

applicable), the grantee may draw down 

funds from the line of credit for an activity. 

The disbursement of grant funds must begin 

no later than 180 calendar days after HUD 

executes a grant agreement with the grantee. 

Failure to draw funds within this timeframe 

may result in HUD’s review of the grantee’s 

certification of its financial controls, 

procurement processes, and capacity, and 

may result in the imposition of any corrective 

actions deemed appropriate by HUD 

pursuant to 24 CFR 570.495, 24 CFR 570.910, 

or 24 CFR 1003.701. 

III.C.6. Amending the action plan. The 

grantee must amend its action plan to update 

its needs assessment, modify or create new 

activities, or reprogram funds, as necessary, 

in the DRGR system. Each amendment must 

be published on the grantee’s official website 

and describe the changes within the context 

of the entire action plan. A grantee’s current 

version of its entire action plan must be 

accessible for viewing as a single document 

at any given point in time, rather than require 

the public or HUD to view and crossreference changes among multiple 

amendments. HUD’s DRGR system will 

include the capabilities necessary for a 

grantee to sufficiently identify the changes 

for each amendment. When a grantee has 

finished amending the content in the Public 

Action Plan, the grantee will click ‘‘Submit 

Plan’’ in the DRGR system. The DRGR system 

will prompt the grantee to select the ‘‘Public 

Action Plan’’ and identify the amendment 

type (substantial or nonsubstantial). The 

grantee will complete this cover page to 

describe each amendment. At a minimum, 

the grantee must: (1) identify exactly what 

content is being added, deleted, or changed; 

(2) clearly illustrate where funds are coming 

from and where they are moving to; and (3) 

include a revised budget allocation table that 

reflects the entirety of all funds, as amended. 

III.C.6.a. Substantial amendment. In its 

action plan, each grantee must specify 

criteria for determining what changes in the 

grantee’s plan constitute a substantial 

amendment to the plan. At a minimum, the 

following modifications will constitute a 

substantial amendment: a change in program 

benefit or eligibility criteria; the addition or 

deletion of an activity; a proposed reduction 

in the overall benefit requirement, as 

outlined in III.F.2.; or the allocation or 

reallocation of a monetary threshold 

specified by the grantee in their action plan. 

For all substantial amendments, the grantee 

must follow the same procedures required for 

the preparation and submission of an action 

plan for disaster recovery, with the exception 

of the public hearing requirements described 

in section III.D.1.b. and the consultation 

requirements described in section III.D.1.a., 

which are not required for substantial 

amendments. A substantial action plan 

amendment shall require a 30-day public 

comment period. 

III.C.6.b Nonsubstantial amendment. The 

grantee must notify HUD, but is not required 

to seek public comment, when it makes any 

plan amendment that is not substantial. 

Although nonsubstantial amendments do not 

require HUD’s approval to become effective, 

the DRGR system must approve the 

amendment to change the status of the Public 

Action Plan to ‘‘reviewed and approved.’’ 

The DRGR system will automatically approve 

the amendment by the fifth day, if not 

completed by HUD sooner. 

III.C.7. Projection of expenditures and 

outcomes. Each grantee must submit 

projected expenditures and outcomes with 

the action plan. The projections must be 

based on each quarter’s expected 

performance—beginning with the first 

quarter funds are available to the grantee and 

continuing each quarter until all funds are 

expended. The grantee will use DRGR’s 

upload feature to include projections and 

accomplishments for each program created. 

III.D. Citizen Participation Requirements 

III.D.1. Citizen participation waiver and 

alternative requirement. To permit a more 

streamlined process and ensure disaster 

recovery grants are awarded in a timely 

manner, provisions of 42 U.S.C. 5304(a)(2) 

and (3), 42 U.S.C. 12707, 24 CFR 570.486, 24 

CFR 1003.604, 24 CFR 91.105(b) through (d), 

and 24 CFR 91.115(b) through (d), with 

respect to citizen participation requirements, 

are waived and replaced by the alternative 

requirements in this section. The streamlined 

requirements require the grantee to include 

public hearings on the proposed action plan 

and provide a reasonable opportunity (at 

least 30 days) for citizen comment. 

The grantee must follow a detailed citizen 

participation plan that satisfies the 

requirements of 24 CFR 91.115 or 91.105 

(except as provided for in notices providing 

waivers and alternative requirements). Each 

local government receiving assistance from a 

state grantee must follow a detailed citizen 

participation plan that satisfies the 

requirements of 24 CFR 570.486 (except as 

provided for in notices providing waivers 

and alternative requirements). 

In addition to the requirements above, the 

streamlined citizen participation alternative 

requirements for CDBG–DR grants are as 

follows: 

III.D.1.a. Requirement for consultation 

during plan preparation. All grantees must 

consult with states, Indian tribes, local 

governments, Federal partners, 

nongovernmental organizations, the private 

sector, and other stakeholders and affected 

parties in the surrounding geographic area, 

including organizations that advocate on 

behalf of members of protected classes, 

vulnerable populations, and underserved 

communities impacted by the disaster, to 

ensure consistency of the action plan with 

applicable regional redevelopment plans. A 

grantee must consult with other relevant 

government agencies, including state and 


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local emergency management agencies that 

have primary responsibility for the 

administration of FEMA funds, if applicable. 

III.D.1.b. Publication of the action plan and 

opportunity for public comment. Following 

the creation of the action plan or substantial 

amendment in DRGR and before the grantee 

submits the action plan or substantial 

amendment to HUD, the grantee must 

publish the proposed plan or amendment for 

public comment. The manner of publication 

must include prominent posting on the 

grantee’s official disaster recovery website 

and must afford citizens, affected local 

governments, and other interested parties a 

reasonable opportunity to review the plan or 

substantial amendment. Grantees shall 

consider if there are potential barriers that 

may limit or prohibit vulnerable populations 

or underserved communities and individuals 

affected by the disaster from providing public 

comment on the grantee’s action plan or 

substantial amendment. If the grantee 

identifies barriers that may limit or prohibit 

equitable participation, the grantee must take 

reasonable measures to increase 

coordination, communication, affirmative 

marketing, targeted outreach, and 

engagement with underserved communities 

and individuals, including persons with 

disabilities and persons with LEP. 

At a minimum, the topic of disaster 

recovery on the grantee’s website must be 

navigable by all interested parties from the 

grantee homepage and must link to the 

disaster recovery website required by section 

III.D.1.e. The grantee’s records must 

demonstrate that it has notified affected 

citizens through electronic mailings, press 

releases, statements by public officials, media 

advertisements, public service 

announcements, and/or contacts with 

neighborhood organizations. 

Additionally, the CDBG–DR grantee must 

convene at least one public hearing on the 

proposed action plan after it has published 

on its website to solicit public comment and 

before submittal of the action plan to HUD. 

If the grantee holds more than one public 

hearing, it must hold each hearing in a 

different location within the MID area in 

locations that the grantee determines will 

promote geographic balance and maximum 

accessibility. The minimum number of 

public hearings a grantee must convene on 

the action plan to obtain interested parties’ 

views and to respond to comments and 

questions shall be determined by the amount 

of the grantee’s CDBG–DR allocation: (1) 

CDBG–DR grantees with allocations under 

$500 million are required to hold at least one 

public hearing in a HUD-identified MID area; 

and (2) CDBG–DR grantees with allocations 

over $500 million or more shall convene at 

least two public hearings in HUD-identified 

MID areas. 

Grantees may convene public hearings 

virtually (alone, or in concert with an inperson hearing). All in-person hearings must 

be held in facilities that are physically 

accessible to persons with disabilities. HUD’s 

implementing regulations for Section 504 of 

the Rehabilitation Act (24 CFR part 8, subpart 

C) provide that where physical accessibility 

is not achievable, grantees must give priority 

to alternative methods of product or 

information delivery that offer programs and 

activities to qualified individuals with 

disabilities in the most integrated setting 

appropriate. When conducting a virtual 

hearing, the grantee must allow questions in 

real time, with answers coming directly from 

the grantee representatives to all ‘‘attendees.’’ 

For both virtual and in person hearings, 

grantees must update their citizen 

participation plans to provide that hearings 

be held at times and locations convenient to 

potential and actual beneficiaries, with 

accommodation for persons with disabilities 

and appropriate auxiliary aids and services to 

ensure effective communication, and specify 

how they will meet these requirements. See 

24 CFR 8.6 for HUD’s regulations about 

effective communication. Grantees must also 

provide meaningful access for individuals 

with LEP at both in-person and virtual 

hearings. In their citizen participation plan, 

state and local government grantees shall 

identify how the needs of non-English 

speaking residents will be met in the case of 

virtual and in-person public hearings where 

a significant number of non-English speaking 

residents can be reasonably expected to 

participate. In addition, for both virtual or inperson hearings, the grantee shall provide 

reasonable notification and access for 

citizens in accordance with the grantee’s 

certifications at III.F.7.g., timely responses to 

all citizen questions and issues, and public 

access to all questions and responses. 

III.D.1.c. Consideration of public 

comments. The grantee must provide a 

reasonable time frame (no less than 30 days) 

and method(s) (including electronic 

submission) for receiving comments on the 

action plan or substantial amendment. The 

grantee must consider all oral and written 

comments on the action plan or any 

substantial amendment. Any updates or 

changes made to the action plan in response 

to public comments should be clearly 

identified in the action plan. A summary of 

comments on the plan or amendment, and 

the grantee’s response to each, must be 

included (e.g., uploaded) in DRGR with the 

action plan or substantial amendment. 

Grantee responses shall address the 

substance of the comment rather than merely 

acknowledge that the comment was received. 

III.D.1.d. Availability and accessibility of 

documents. The grantee must make the 

action plan, any substantial amendments, 

vital documents, and all performance reports 

available to the public on its website. See the 

following guidance for more information on 

vital documents: https://www.lep.gov/ 

guidance/HUD_guidance_Jan07.pdf. In 

addition, the grantee must make these 

documents available in a form accessible to 

persons with disabilities and those with LEP. 

Grantees must take reasonable steps to ensure 

meaningful access to their programs and 

activities by LEP persons, including members 

of protected classes, vulnerable populations, 

and individuals from underserved 

communities. In their citizen participation 

plan, state and local government grantees 

shall describe their procedures for assessing 

their language needs and identify any need 

for translation of notices and other vital 

documents. At a minimum, the citizen 

participation plan shall require that the state 

or local government grantee take reasonable 

steps to provide language assistance to 

ensure meaningful access to participation by 

non-English-speaking residents of the 

grantee’s jurisdiction. 

III.D.1.e. Public website. The grantee must 

maintain a public website that permits 

individuals and entities awaiting assistance 

and the general public to see how all grant 

funds are used and administered. The 

website must include copies of all relevant 

procurement documents and, except as noted 

in the next paragraph, all grantee 

administrative contracts, details of ongoing 

procurement processes, and action plans and 

amendments. The public website must be 

accessible to persons with disabilities and 

individuals with LEP. 

To meet this requirement, each grantee 

must make the following items available on 

its website: the action plan created using 

DRGR (including all amendments); each 

performance report (as created using the 

DRGR system); citizen participation plan; 

procurement policies and procedures; all 

contracts, as defined in 2 CFR 200.22, that 

will be paid with CDBG–DR funds 

(including, but not limited to, subrecipients’ 

contracts); and a summary including the 

description and status of services or goods 

currently being procured by the grantee or 

the subrecipient (e.g., phase of the 

procurement, requirements for proposals, 

etc.). Contracts and procurement actions that 

do not exceed the micro-purchase threshold, 

as defined in 2 CFR 200.1, are not required 

to be posted to a grantee’s website. 

III.D.1.f. Application status. The grantee 

must provide multiple methods of 

communication, such as websites, toll-free 

numbers, TTY and relay services, email 

address, fax number, or other means to 

provide applicants for recovery assistance 

with timely information to determine the 

status of their application. 

III.D.1.g. Citizen complaints. The grantee 

will provide a timely written response to 

every citizen complaint. The grantee 

response must be provided within fifteen 

working days of the receipt of the complaint, 

or the grantee must document why additional 

time for the response was required. 

Complaints regarding fraud, waste, or abuse 

of government funds should be forwarded to 

the HUD OIG Fraud Hotline (phone: 1–800– 

347–3735 or email: hotline@hudoig.gov). 

III.D.1.h. General requirements. For plan 

publication, the comprehensive disaster 

recovery website and vital documents must 

ensure effective communication for 

individuals with disabilities, as required by 

24 CFR 8.6 and the Americans with 

Disabilities Act, as applicable. In addition to 

ensuring the accessibility of the 

comprehensive disaster recovery website and 

vital documents, this obligation includes the 

requirement to provide auxiliary aids and 

services where necessary to ensure effective 

communication with individuals with 

disabilities, which may take the form of the 

furnishing of the above referenced materials 

in alternative formats (24 CFR 8.6(a)(1)). 

When required by III.D.1.d., grantees must 

take reasonable steps to ensure meaningful 

access for individuals with LEP. 


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III.E. Program Income 

III.E.1. Program income waiver and 

alternative requirement. For state and unit of 

general local government grantees, HUD is 

waiving all applicable program income rules 

at 42 U.S.C. 5304(j), 24 CFR 570.489(e), 24 

CFR 570.500, and 24 CFR 570.504 and 

providing the alternative requirement 

described below. Program income earned by 

Indian tribes that receive an allocation from 

HUD will be governed by the regulations at 

24 CFR 1003.503 until grant closeout and not 

by the waivers and alternative requirements 

in this Consolidated Notice. Program income 

earned by Indian tribes that are subrecipients 

of state grantees or local government grantees 

will be subject to the program income 

requirements for subrecipients of those 

grantees. 

III.E.1.a. Definition of program income. 

‘‘Program income’’ is defined as gross income 

generated from the use of CDBG–DR funds, 

except as provided in III.E.1.b., and received 

by a state, local government, Indian tribe 

receiving funds from a grantee, or their 

subrecipients. When income is generated by 

an activity that is only partially assisted with 

CDBG–DR funds, the income shall be 

prorated to reflect the percentage of CDBG– 

DR funds used (e.g., a single loan supported 

by CDBG–DR funds and other funds, or a 

single parcel of land purchased with CDBG– 

DR funds and other funds). If CDBG funds are 

used with CDBG–DR funds on an activity, 

any income earned on the CDBG portion 

would not be subject to the waiver and 

alternative requirement in the Consolidated 

Notice. 

Program income includes, but is not 

limited to, the following: 

(i) Proceeds from the disposition by sale or 

long-term lease of real property purchased or 

improved with CDBG–DR funds. 

(ii) Proceeds from the disposition of 

equipment purchased with CDBG–DR funds. 

(iii) Gross income from the use or rental of 

real or personal property acquired by a state, 

local government, or subrecipient thereof 

with CDBG–DR funds, less costs incidental to 

generation of the income. 

(iv) Gross income from the use or rental of 

real property owned by a state, local 

government, or subrecipient thereof, that was 

constructed or improved with CDBG–DR 

funds, less costs incidental to generation of 

the income. 

(v) Payments of principal and interest on 

loans made using CDBG–DR funds. 

(vi) Proceeds from the sale of loans made 

with CDBG–DR funds. 

(vii) Proceeds from the sale of obligations 

secured by loans made with CDBG–DR funds. 

(viii) Interest earned on program income 

pending disposition of the income, including 

interest earned on funds held in a revolving 

fund account. 

(ix) Funds collected through special 

assessments made against nonresidential 

properties and properties owned and 

occupied by non-LMI households, where the 

special assessments are used to recover all or 

part of the CDBG–DR portion of a public 

improvement. 

(x) Gross income paid to a state, local 

government, or subrecipient thereof, from the 

ownership interest in a for-profit entity in 

which the income is in return for the 

provision of CDBG–DR assistance. 

III.E.1.b. Program income—does not 

include: 

(i) The total amount of funds that is less 

than $35,000 received in a single year and 

retained by a state, local government, or a 

subrecipient thereof. 

(ii) Amounts generated by activities 

eligible under section 105(a)(15) of the HCDA 

and carried out by an entity under the 

authority of section 105(a)(15) of the HCDA. 

III.E.1.c. Retention of program income. 

State grantees may permit a local government 

that receives or will receive program income 

to retain the program income but are not 

required to do so. 

III.E.1.d. Program income—use, close out, 

and transfer. 

(i) Program income received (and retained, 

if applicable) before or after closeout of the 

grant that generated the program income, and 

used to continue disaster recovery activities, 

is treated as additional CDBG–DR funds 

subject to the requirements of the 

Consolidated Notice and must be used in 

accordance with the grantee’s action plan for 

disaster recovery. To the maximum extent 

feasible, program income shall be used or 

distributed before additional withdrawals 

from the U.S. Treasury are made, except as 

provided in III.E.1.e. below. 

(ii) In addition to the alternative 

requirements dealing with program income 

required above, the following rules apply: 

(1) a state or local government grantee may 

transfer program income to its annual CDBG 

program before closeout of the grant that 

generated the program income. In addition, 

state grantees may transfer program income 

before closeout to any annual CDBG-funded 

activities carried out by a local government 

within the state. 

(2) Program income received by a grantee, 

or received and retained by a subrecipient, 

after closeout of the grant that generated the 

program income, may also be transferred to 

a grantee’s annual CDBG award. 

(3) In all cases, any program income 

received that is not used to continue the 

disaster recovery activity will not be subject 

to the waivers and alternative requirements 

of the Consolidated Notice. Rather, those 

funds will be subject to the state or local 

government grantee’s regular CDBG program 

rules. Any other transfer of program income 

not specifically addressed in the 

Consolidated Notice may be carried out if the 

grantee first seeks and then receives HUD’s 

approval. 

III.E.1.e. Revolving funds. State and local 

government grantees may establish revolving 

funds to carry out specific, identified 

activities. State grantees may also establish a 

revolving fund to distribute funds to local 

governments or tribes to carry out specific, 

identified activities. A revolving fund, for 

this purpose, is a separate fund (with a set 

of accounts that are independent of other 

program accounts) established to carry out 

specific activities. These activities must 

generate payments used to support similar 

activities going forward. These payments to 

the revolving fund are program income and 

must be substantially disbursed from the 

revolving fund before additional grant funds 

are drawn from the U.S. Treasury for 

payments that could be funded from the 

revolving fund. Such program income is not 

required to be disbursed for nonrevolving 

fund activities. A revolving fund established 

by a CDBG–DR grantee shall not be directly 

funded or capitalized with CDBG–DR grant 

funds, pursuant to 24 CFR 570.489(f)(3). 

III.F. Other General Waivers and Alternative 

Requirements 

III.F.1. Consolidated Plan waiver. HUD is 

temporarily waiving the requirement for 

consistency with the consolidated plan 

(requirements at 42 U.S.C. 12706, 24 CFR 

91.225(a)(5), and 24 CFR 91.325(a)(5)), 

because the effects of a major disaster alter 

a grantee’s priorities for meeting housing, 

employment, and infrastructure needs. In 

conjunction, 42 U.S.C. 5304(e) is also 

waived, to the extent that it would require 

HUD to annually review grantee performance 

under the consistency criteria. These waivers 

apply only for 24 months after the 

applicability date of the grantee’s applicable 

Allocation Announcement Notice. If the 

grantee is not scheduled to submit a new 

three-to five-year consolidated plan within 

the next two years, the grantee must update 

its existing three-to five-year consolidated 

plan to reflect disaster-related needs no later 

than 24 months after the applicability date of 

the grantee’s applicable Allocation 

Announcement Notice. 

III.F.2. Overall benefit requirement. The 

primary objective of the HCDA is the 

‘‘development of viable urban communities, 

by providing decent housing and a suitable 

living environment and expanding economic 

opportunities, principally for persons of low 

and moderate income’’ (42 U.S.C. 5301(c)). 

Consistent with the HCDA, this notice 

requires grantees to comply with the overall 

benefit requirements in the HCDA and 24 

CFR 570.484, 570.200(a)(3), and 1003.208, 

which require that 70 percent of funds be 

used for activities that benefit LMI persons. 

For purposes of a CDBG–DR grant, HUD is 

establishing an alternative requirement that 

the overall benefit test shall apply only to the 

grant of CDBG–DR funds described in the 

Allocation Announcement Notice and related 

program income. 

A grantee may seek to reduce the overall 

benefit requirement below 70 percent of the 

total grant, but must submit a substantial 

amendment as provided in section III.C.6.a. 

in the Consolidated Notice, and provide a 

justification that, at a minimum: (a) identifies 

the planned activities that meet the needs of 

its LMI population; (b) describes proposed 

activities and programs that will be affected 

by the alternative requirement, including 

their proposed location(s) and role(s) in the 

grantee’s long-term disaster recovery plan; (c) 

describes how the activities/programs 

identified in (b) prevent the grantee from 

meeting the 70 percent requirement; (d) 

demonstrates that LMI persons’ disasterrelated needs have been sufficiently met and 

that the needs of non-LMI persons or areas 

are disproportionately greater, and that the 

jurisdiction lacks other resources to serve 

non-LMI persons; and (e) demonstrates a 

compelling need for HUD to lower the 

percentage of the grant that must benefit lowand moderate-income persons. 


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III.F.3. Use of the urgent need national 

objective. Because HUD provides CDBG–DR 

funds only to grantees with documented 

disaster-related impacts and each grantee is 

limited to spending funds only for the benefit 

of areas that received a Presidential disaster 

declaration, the Secretary finds good cause to 

waive the urgent need national objective 

criteria in section 104(b)(3) of the HCDA and 

to establish the following alternative 

requirement for any CDBG–DR grantee using 

the urgent need national objective for a 

period of 36 months after the applicability 

date of the grantee’s Allocation 

Announcement Notice. 

Pursuant to this alternative requirement, 

grantees that use the urgent need national 

objective must: (1) describe in the impact and 

unmet needs assessment why specific needs 

have a particular urgency, including how the 

existing conditions pose a serious and 

immediate threat to the health or welfare of 

the community; (2) identify each program or 

activity in the action plan that will use the 

urgent need national objective—either 

through its initial action plan submission or 

through a substantial amendment submitted 

by the grantee within 36 months of the 

applicability date of the grantee’s Allocation 

Announcement Notice; and (3) document 

how each program and/or activity funded 

under the urgent need national objective in 

the action plan responds to the urgency, type, 

scale, and location of the disaster-related 

impact as described in the grantee’s impact 

and unmet needs assessment. 

The grantee’s action plan must address all 

three criteria described above to use the 

alternative urgent need national objective for 

the program and/or activity. This alternative 

urgent need national objective is in effect for 

a period of 36 months following the 

applicability date of the grantee’s Allocation 

Announcement Notice. After 36 months, the 

grantee will be required to follow the criteria 

established in section 104(b)(3) of the HCDA 

and its implementing regulations in 24 CFR 

part 570 when using the urgent need national 

objective for any new programs and/or 

activities added to an action plan. 

III.F.4. Reimbursement of disaster recovery 

expenses by a grantee or subrecipient. The 

provisions of 24 CFR 570.489(b) are applied 

to permit a state grantee to charge to the grant 

otherwise allowable costs incurred by the 

grantee, its recipients or subrecipients 

(including Indian tribes and PHAs) on or 

after the incident date of the covered disaster. 

A local government grantee is subject to the 

provisions of 24 CFR 570.200(h) but may 

reimburse itself or its subrecipients for 

otherwise allowable costs incurred on or after 

the incident date of the covered disaster. 

Section 570.200(h)(1)(i) is waived to the 

extent that it requires pre-agreement 

activities to be included in the local 

government’s consolidated plan. As an 

alternative requirement, grantees must 

include any pre-agreement activities in their 

action plans, including any costs of eligible 

activities that were funded with short-term 

loans (e.g., bridge loans) and that the grantee 

intends to reimburse or otherwise charge to 

the grant, consistent with applicable program 

requirements. 

III.F.5. Reimbursement of pre-application 

costs of homeowners, renters, businesses, and 

other qualifying entities. Grantees are 

permitted to charge to grants the pre-award 

and pre-application costs of homeowners, 

renters, businesses, and other qualifying 

entities for eligible costs these applicants 

have incurred in response to an eligible 

disaster covered under a grantees’ applicable 

Allocation Announcement Notice. For 

purposes of the Consolidated Notice, preapplication costs are costs incurred by an 

applicant to CDBG–DR funded programs 

before the time of application to a grantee or 

subrecipient, which may be before (preaward) or after the grantee signs its CDBG– 

DR grant agreement. In addition to the terms 

described in the remainder of the 

Consolidated Notice, grantees may only 

charge costs to the grant that meet the 

following requirements: 

• Grantees may only charge the costs for 

rehabilitation, demolition, and 

reconstruction of single family, multifamily, 

and nonresidential buildings, including 

commercial properties, owned by private 

individuals and entities, incurred before the 

owner applies to a CDBG–DR grantee, 

recipient, or subrecipient for CDBG–DR 

assistance; 

• For rehabilitation and reconstruction 

costs, grantees may only charge costs for 

activities completed within the same 

footprint of the damaged structure, sidewalk, 

driveway, parking lot, or other developed 

area; 

• As required by 2 CFR 200.403(g), costs 

must be adequately documented; and 

• Grantees must complete a duplication of 

benefits check before providing assistance 

pursuant to section IV.A. in the Consolidated 

Notice. 

Grantees are required to ensure that all 

costs charged to a CDBG–DR grant are 

necessary expenses related to authorized 

recovery purposes. Grantees may charge to 

CDBG–DR grants the eligible pre-application 

costs of individuals and private entities 

related to single family, multifamily, and 

nonresidential buildings, only if: 1) the 

person or private entity incurred the 

expenses within one year after the 

applicability date of the grantee’s Allocation 

Announcement Notice (or within one year 

after the date of the disaster, whichever is 

later); and 2) the person or entity pays for the 

cost before the date on which the person or 

entity applies for CDBG–DR assistance. 

Exempt activities as defined at 24 CFR 58.34, 

but not including 24 CFR 58.34(a)(12), and 

categorical exclusions as defined at 24 CFR 

58.35(b) are not subject to the time limit on 

pre-application costs outlined above. Actions 

that convert or potentially convert to exempt 

under 24 CFR 58.34(a)(12) remain subject to 

the reimbursement requirements provided 

herein. If a grantee cannot meet all 

requirements at 24 CFR part 58, the preapplication costs cannot be reimbursed with 

CDBG–DR or other HUD funds. 

Grantees must comply with the necessary 

and reasonable cost principles for state, local, 

and Indian tribal governments (described at 

2 CFR 200.403). Grantees must incorporate 

into their policies and procedures the basis 

for determining that the assistance provided 

under the terms of this provision is necessary 

and reasonable. 

A grantee may not charge such pre-award 

or pre-application costs to grants if the 

grantee cannot meet all requirements at 24 

CFR part 58. Under CDBG–DR authorizing 

legislation and HUD’s environmental 

regulations in 24 CFR part 58, the CDBG–DR 

‘‘recipient’’ (as defined in 24 CFR part 

58.2(a)(5), which differs from the definition 

in 2 CFR part 200) is the responsible entity 

that assumes the responsibility for 

completing environmental reviews under 

Federal laws and authorities. The responsible 

entity assumes all legal liability for the 

application, compliance, and enforcement of 

these requirements. Pre-award costs are also 

allowable when CDBG–DR assistance is 

provided for the rehabilitation, demolition, 

or reconstruction of government buildings, 

public facilities, and infrastructure. However, 

in such instances, the environmental review 

must occur before the underlying activity 

(e.g., rehabilitation of a government building) 

begins. 

Grantees are also required to consult with 

the State Historic Preservation Officer, Fish 

and Wildlife Service, and National Marine 

Fisheries Service, to obtain formal 

agreements for compliance with section 106 

of the National Historic Preservation Act (54 

U.S.C. 306108) and section 7 of the 

Endangered Species Act of 1973 (16 U.S.C. 

1536) when designing a reimbursement 

program. 

All grantees must follow all cross-cutting 

requirements, as applicable, for all CDBG–DR 

funded activities including but not limited to 

the environmental requirements above, the 

Davis Bacon Act, Civil Rights Requirements, 

HUD’s Lead Safe Housing Rule, and the URA. 

III.F.6. Alternative requirement for the 

elevation of structures when using CDBG–DR 

funds as the non-Federal match in a FEMAfunded project. Currently, CDBG–DR grantees 

using FEMA and CDBG–DR funds on the 

same activity have encountered challenges in 

certain circumstances in reconciling CDBG– 

DR elevation requirements and those 

established by FEMA. FEMA regulations at 

44 CFR 9.11(d)(3)(i) and (ii) prohibit new 

construction or substantial improvements to 

a structure unless the lowest floor of the 

structure is at or above the level of the base 

flood and, for Critical Actions, at or above the 

level of the 500-year flood. However, 44 CFR 

9.11(d)(3)(iii) allows for an alternative to 

elevation to the 100- or 500-year flood level, 

subject to FEMA approval, which would 

provide for improvements that would ensure 

the substantial impermeability of the 

structure below flood level. While FEMA 

may change its standards for elevation in the 

future, as long as the CDBG–DR grantee is 

following a FEMA-approved flood standard 

this waiver and alternative requirement will 

continue to apply. 

FEMA funded projects generally 

commence well in advance of the availability 

of CDBG–DR funds and when CDBG–DR 

funds are used as match for a FEMA project 

that is underway, the alignment of HUD’s 

elevation standards with any alternative 

standard allowed by FEMA may not be 

feasible and may not be cost reasonable. For 

these reasons, the Secretary finds good cause 

to establish an alternative requirement for the 

use of an alternative, FEMA-approved flood 


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standard instead of the elevation 

requirements established in section II.B.2.c. 

and II.C.2. of the Consolidated Notice. 

The alternative requirements apply when: 

(a) CDBG–DR funds are used as the nonFederal match for FEMA assistance; (b) the 

FEMA-assisted activity, for which CDBG–DR 

funds will be used as match, commenced 

before HUD’s obligation of CDBG–DR funds 

to the grantee; and (c) the grantee has 

determined and demonstrated with records 

in the activity file that implementation costs 

of the required CDBG–DR elevation or flood 

proofing requirements are not reasonable 

costs, as that term is defined in the 

applicable cost principles at 2 CFR 200.404. 

III.F.7. Certifications waiver and 

alternative requirement. Sections 104(b)(4), 

(c), and (m) of the HCDA (42 U.S.C. 

5304(b)(4), (c) & (m)), sections 106(d)(2)(C) & 

(D) of the HCDA (42 U.S.C. 5306(d)(2)(C) & 

(D)), and section 106 of the CranstonGonzalez National Affordable Housing Act 

(42 U.S.C. 12706), and regulations at 24 CFR 

91.225 and 91.325 are waived and replaced 

with the following alternative. Each grantee 

receiving an allocation under an Allocation 

Announcement Notice must make the 

following certifications with its action plan: 

a. The grantee certifies that it has in effect 

and is following a residential antidisplacement and relocation assistance plan 

(RARAP) in connection with any activity 

assisted with CDBG–DR grant funds that 

fulfills the requirements of Section 104(d), 24 

CFR part 42, and 24 CFR part 570, as 

amended by waivers and alternative 

requirements. 

b. The grantee certifies its compliance with 

restrictions on lobbying required by 24 CFR 

part 87, together with disclosure forms, if 

required by part 87. 

c. The grantee certifies that the action plan 

for disaster recovery is authorized under state 

and local law (as applicable) and that the 

grantee, and any entity or entities designated 

by the grantee, and any contractor, 

subrecipient, or designated public agency 

carrying out an activity with CDBG–DR 

funds, possess(es) the legal authority to carry 

out the program for which it is seeking 

funding, in accordance with applicable HUD 

regulations as modified by waivers and 

alternative requirements. 

d. The grantee certifies that activities to be 

undertaken with CDBG–DR funds are 

consistent with its action plan. 

e. The grantee certifies that it will comply 

with the acquisition and relocation 

requirements of the URA, as amended, and 

implementing regulations at 49 CFR part 24, 

as such requirements may be modified by 

waivers or alternative requirements. 

f. The grantee certifies that it will comply 

with section 3 of the Housing and Urban 

Development Act of 1968 (12 U.S.C. 1701u) 

and implementing regulations at 24 CFR part 

75. 

g. The grantee certifies that it is following 

a detailed citizen participation plan that 

satisfies the requirements of 24 CFR 91.115 

or 91.105 (except as provided for in waivers 

and alternative requirements). Also, each 

local government receiving assistance from a 

state grantee must follow a detailed citizen 

participation plan that satisfies the 

requirements of 24 CFR 570.486 (except as 

provided for in waivers and alternative 

requirements). 

h. State grantee certifies that it has 

consulted with all disaster-affected local 

governments (including any CDBGentitlement grantees), Indian tribes, and any 

local public housing authorities in 

determining the use of funds, including the 

method of distribution of funding, or 

activities carried out directly by the state. 

i. The grantee certifies that it is complying 

with each of the following criteria: 

(1) Funds will be used solely for necessary 

expenses related to disaster relief, long-term 

recovery, restoration of infrastructure and 

housing, economic revitalization, and 

mitigation in the most impacted and 

distressed areas for which the President 

declared a major disaster pursuant to the 

Robert T. Stafford Disaster Relief and 

Emergency Assistance Act of 1974 (42 U.S.C. 

5121 et seq.). 

(2) With respect to activities expected to be 

assisted with CDBG–DR funds, the action 

plan has been developed so as to give the 

maximum feasible priority to activities that 

will benefit low- and moderate-income 

families. 

(3) The aggregate use of CDBG–DR funds 

shall principally benefit low- and moderateincome families in a manner that ensures that 

at least 70 percent (or another percentage 

permitted by HUD in a waiver) of the grant 

amount is expended for activities that benefit 

such persons. 

(4) The grantee will not attempt to recover 

any capital costs of public improvements 

assisted with CDBG–DR grant funds, by 

assessing any amount against properties 

owned and occupied by persons of low- and 

moderate-income, including any fee charged 

or assessment made as a condition of 

obtaining access to such public 

improvements, unless: (a) disaster recovery 

grant funds are used to pay the proportion of 

such fee or assessment that relates to the 

capital costs of such public improvements 

that are financed from revenue sources other 

than under this title; or (b) for purposes of 

assessing any amount against properties 

owned and occupied by persons of moderate 

income, the grantee certifies to the Secretary 

that it lacks sufficient CDBG funds (in any 

form) to comply with the requirements of 

clause (a). 

j. State and local government grantees 

certify that the grant will be conducted and 

administered in conformity with title VI of 

the Civil Rights Act of 1964 (42 U.S.C. 

2000d), the Fair Housing Act (42 U.S.C. 

3601–3619), and implementing regulations, 

and that it will affirmatively further fair 

housing. An Indian tribe grantee certifies that 

the grant will be conducted and administered 

in conformity with the Indian Civil Rights 

Act. 

k. The grantee certifies that it has adopted 

and is enforcing the following policies, and, 

in addition, state grantees must certify that 

they will require local governments that 

receive their grant funds to certify that they 

have adopted and are enforcing: 

(1) A policy prohibiting the use of 

excessive force by law enforcement agencies 

within its jurisdiction against any 

individuals engaged in nonviolent civil rights 

demonstrations; and 

(2) A policy of enforcing applicable state 

and local laws against physically barring 

entrance to or exit from a facility or location 

that is the subject of such nonviolent civil 

rights demonstrations within its jurisdiction. 

l. The grantee certifies that it (and any 

subrecipient or administering entity) 

currently has or will develop and maintain 

the capacity to carry out disaster recovery 

activities in a timely manner and that the 

grantee has reviewed the requirements 

applicable to the use of grant funds. 

m. The grantee certifies to the accuracy of 

its Financial Management and Grant 

Compliance Certification Requirements, or 

other recent certification submission, if 

approved by HUD, and related supporting 

documentation as provided in section III.A.1. 

of the Consolidated Notice and the grantee’s 

implementation plan and related 

submissions to HUD as provided in section 

III.A.2. of the Consolidated Notice. 

n. The grantee certifies that it will not use 

CDBG–DR funds for any activity in an area 

identified as flood prone for land use or 

hazard mitigation planning purposes by the 

state, local, or tribal government or 

delineated as a Special Flood Hazard Area (or 

100-year floodplain) in FEMA’s most current 

flood advisory maps, unless it also ensures 

that the action is designed or modified to 

minimize harm to or within the floodplain, 

in accordance with Executive Order 11988 

and 24 CFR part 55. The relevant data source 

for this provision is the state, local, and tribal 

government land use regulations and hazard 

mitigation plans and the latest-issued FEMA 

data or guidance, which includes advisory 

data (such as Advisory Base Flood 

Elevations) or preliminary and final Flood 

Insurance Rate Maps. 

o. The grantee certifies that its activities 

concerning lead-based paint will comply 

with the requirements of 24 CFR part 35, 

subparts A, B, J, K, and R. 

p. The grantee certifies that it will comply 

with environmental requirements at 24 CFR 

part 58. 

q. The grantee certifies that it will comply 

with the provisions of title I of the HCDA and 

with other applicable laws. 

Warning: Any person who knowingly 

makes a false claim or statement to HUD may 

be subject to civil or criminal penalties under 

18 U.S.C. 287, 1001, and 31 U.S.C. 3729. 

III.G. Ineligible Activities in CDBG–DR 

Any activity that is not authorized under 

Section 105(a) of the HCDA is ineligible to 

be assisted with CDBG–DR funds, unless 

explicitly allowed by waiver and alternative 

requirement in the Consolidated Notice. 

Additionally, the uses described below are 

explicitly prohibited. 

III.G.1. Prohibition on compensation. 

Grantees shall not use CDBG–DR funds to 

provide compensation to beneficiaries for 

losses stemming from disaster related 

impacts. Grantees may, however, reimburse 

disaster-impacted beneficiaries based on the 

pre-application costs incurred by the 

beneficiary to complete an eligible activity. 

Reimbursement of beneficiaries for eligible 

activity costs are subject to the requirements 


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established in section III.F.5. of the 

Consolidated Notice. 

III.G.2. Prohibition on forced mortgage 

payoff. A forced mortgage payoff occurs 

when homeowners with an outstanding 

mortgage balance are required, under the 

terms of their loan agreement, to repay the 

balance of the mortgage loan before using 

assistance to rehabilitate or reconstruct their 

homes. CDBG–DR funds, however, shall not 

be used for a forced mortgage payoff. The 

ineligibility of a forced mortgage payoff with 

CDBG–DR funds does not affect HUD’s 

longstanding guidance that when other nonCDBG disaster assistance is taken by lenders 

for a forced mortgage payoff, those funds are 

not considered to be available to the 

homeowner and do not constitute a 

duplication of benefits for the purpose of 

housing rehabilitation or reconstruction. 

III.G.3. Prohibiting assistance to private 

utilities. HUD is adopting the following 

alternative requirement to section 105(a) and 

prohibiting the use of CDBG–DR funds to 

assist a privately-owned utility for any 

purpose. 

IV. Other Program Requirements 

IV.A. Duplication of Benefits 

The grantee must comply with section 312 

of the Stafford Act, as amended, which 

prohibits any person, business concern, or 

other entity from receiving financial 

assistance with respect to any part of a loss 

resulting from a major disaster for which 

such person, business concern, or other 

entity has received financial assistance under 

any other program or from insurance or any 

other source. To comply with section 312, a 

person or entity may receive financial 

assistance only to the extent that the person 

or entity has a disaster recovery need that has 

not been fully met. Grantees must also 

establish policies and procedures to provide 

for the repayment of a CDBG–DR award 

when assistance is subsequently provided for 

that same purpose from any other source. 

Grantees may be subject to additional DOB 

requirements described in a separate notice. 

The applicable Allocation Announcement 

Notice will describe any additional 

requirements, as applicable. 

Subsidized loans are financial assistance 

and therefore can duplicate financial 

assistance provided from another source 

unless an exception in IV.A.1. applies. 

IV.A.1. Exceptions when subsidized loans 

are not a duplication. When an exception 

described in paragraphs IV.A.1.a. or IV.A.1.b. 

applies, documentation required by those 

paragraphs must be maintained by the 

grantee. Without this documentation, any 

approved but undisbursed portion of a 

subsidized loan must be included in the 

grantee’s calculation of the total assistance 

amount unless another exception applies. For 

cancelled SBA loans, the grantee must notify 

the SBA that the applicant has agreed to not 

take any actions to reinstate the cancelled 

loan or draw any additional undisbursed 

loan amounts. 

IV.A.1.a. Short-term subsidized loans for 

costs later reimbursed with CDBG–DR. 

CDBG–DR funds may be used to reimburse 

pre-award costs of the grantee or subrecipient 

for eligible activities on or after the date of 

the disaster. If the grantee or subrecipient 

obtained a subsidized short-term loan to pay 

for eligible costs before CDBG–DR funds 

became available (for example, a low-interest 

loan from a local tax increment financing 

fund), the reimbursement of the costs paid by 

the loan does not create a duplication. 

IV.A.1.b. Declined or cancelled subsidized 

loans. The amount of a subsidized loan that 

is declined or cancelled is not a DOB. To 

exclude declined or cancelled loan amounts 

from the DOB calculation, the grantee must 

document that all or a portion of the 

subsidized loan is cancelled or declined. 

(i) Declined SBA Loans: Declined loan 

amounts are loan amounts that were 

approved or offered by a lender in response 

to a loan application, but were turned down 

by the applicant, meaning the applicant 

never signed loan documents to receive the 

loan proceeds. 

CDBG–DR grantees shall not treat declined 

subsidized loans, including declined SBA 

loans, as a DOB (but are not prohibited from 

considering declined subsidized loans for 

other reasons, such as underwriting). A 

grantee is only required to document 

declined loans if information available to the 

grantee (e.g., the data the grantee receives 

from FEMA, SBA, or other sources) indicates 

that the applicant received an offer for 

subsidized loan assistance, and the grantee is 

unable to determine from that available 

information that the applicant declined the 

loan. If the grantee is aware that the applicant 

received an offer of loan assistance and 

cannot ascertain from available data that the 

applicant declined the loan, the grantee must 

obtain a written certification from the 

applicant that the applicant did not accept 

the subsidized loan by signing loan 

documents and did not receive the loan. 

(ii) Cancelled Loans: Cancelled loans are 

loans (or portions of loans) that were initially 

accepted, but for a variety of reasons, all or 

a portion of the loan amount was not 

disbursed and is no longer available to the 

applicant. 

The cancelled loan amount is the amount 

that is no longer available. The loan 

cancellation may be due to default of the 

borrower, agreement by both parties to cancel 

the undisbursed portion of the loan, or 

expiration of the term for which the loan was 

available for disbursement. The following 

documentation is sufficient to demonstrate 

that any undisbursed portion of an accepted 

subsidized loan is cancelled and no longer 

available: (a) A written communication from 

the lender confirming that the loan has been 

cancelled and undisbursed amounts are no 

longer available to the applicant; or (b) a 

legally binding agreement between the 

CDBG–DR grantee (or local government, 

Indian tribe, or subrecipient administering 

the CDBG–DR assistance) and the applicant 

that indicates that the period of availability 

of the loan has passed and the applicant 

agrees not to take actions to reinstate the loan 

or draw any additional undisbursed loan 

amounts. 

IV.B. Procurement 

For a grantee to have proficient 

procurement processes, a grantee must: 

indicate the procurement standards that 

apply to its use of CDBG–DR funds; indicate 

the procurement standards for subrecipients 

or local governments as applicable; comply 

with the standards it certified to HUD that it 

follows (and update the certification 

submissions when substantial changes are 

made); post the required documentation to 

the official website as described below; and 

include periods of performance and date of 

completion in all CDBG–DR contracts. 

State grantees must comply with the 

procurement requirements at 24 CFR 

570.489(g) and the following alternative 

requirements: The grantee must evaluate the 

cost or price of the product or service being 

procured. State grantees shall establish 

requirements for procurement processes for 

local governments and subrecipients based 

on full and open competition consistent with 

the requirements of 24 CFR 570.489(g), and 

shall require a local government or 

subrecipient to evaluate the cost or price of 

the product or service being procured with 

CDBG–DR funds. Additionally, if the state 

agency designated as the administering 

agency chooses to provide funding to another 

state agency, the administering agency must 

specify in its procurement processes whether 

the agency implementing the CDBG–DR 

activity must follow the procurement 

processes that the administering agency is 

subject to, or whether the agency must follow 

the same processes to which other local 

governments and subrecipients are subject, or 

its own procurement processes. 

A grantee shall administer CDBG–DR grant 

funds in accordance with all applicable laws 

and regulations. As an alternative 

requirement, grantees may not delegate, by 

contract, or otherwise, the responsibility for 

administering such grant funds. 

HUD is establishing an additional 

alternative requirement for all contracts with 

contractors used to provide goods and 

services, as follows: 

1. The grantee (or procuring entity) is 

required to clearly state the period of 

performance or date of completion in all 

contracts; 

2. The grantee (or procuring entity) must 

incorporate performance requirements and 

liquidated damages into each procured 

contract. Contracts that describe work 

performed by general management consulting 

services need not adhere to the requirement 

on liquidated damages but must incorporate 

performance requirements; and 

3. The grantee (or procuring entity) may 

contract for administrative support, in 

compliance with 2 CFR 200.459, but may not 

delegate or contract to any other party any 

inherently governmental responsibilities 

related to oversight of the grant, including 

policy development, fair housing and civil 

rights compliance, and financial 

management. 

IV.C. Use of the ‘‘Upper Quartile’’ or 

‘‘Exception Criteria’’ 

The LMA benefit requirement is modified 

when fewer than one quarter of the 

populated-block groups in its jurisdictions 

contain 51 percent or more LMI persons. In 

such a community, activities must serve an 

area that contains a percentage of LMI 

residents that is within the upper quartile of 


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all census-block groups within its 

jurisdiction in terms of the degree of 

concentration of LMI residents. HUD 

determines the lowest proportion a grantee 

may use to qualify an area for this purpose 

and advises the grantee, accordingly. The 

‘‘exception criteria’’ applies to CDBG–DR 

funded activities in jurisdictions covered by 

such criteria, including jurisdictions that 

receive disaster recovery funds from a state. 

Disaster recovery grantees are required to use 

the most recent data available in 

implementing the exception criteria (https:// 

www.hudexchange.info/programs/acs-lowmod-summary-data/acs-low-mod-summarydata-exception-grantees/). 

IV.D. Environmental Requirements 

IV.D.1. Clarifying note on the process for 

environmental release of funds when a state 

carries out activities directly. For CDBG–DR 

grants, HUD allows state grantees to carry out 

activities directly and to distribute funds to 

subrecipients. Per 24 CFR 58.4(b)(1), when a 

state carries out activities directly (including 

through subrecipients that are not units of 

general local government), the state must 

submit the Certification and Request for 

Release of Funds to HUD for approval. 

IV.D.2. Adoption of another agency’s 

environmental review. Appropriations acts 

allow recipients of funds that use such funds 

to supplement Federal assistance provided 

under section 402, 403, 404, 406, 407, 

408(c)(4), or 502 of the Stafford Act to adopt, 

without review or public comment, any 

environmental review, approval, or permit 

performed by a Federal agency. Such 

adoption shall satisfy the responsibilities of 

the recipient with respect to such 

environmental review, approval, or permit. 

This provision allows the recipient of 

supplemental assistance to adopt another 

Federal agency’s review where the HUD 

assistance supplements the Stafford Act, and 

the other Federal agency performed an 

environmental review for assistance under 

section 402, 403, 404, 406, 407, or 502 of the 

Stafford Act. 

The other agency’s environmental review 

must cover all project activities funded by 

the HUD recipient for each project. The 

grantee is only required to supplement the 

other agency’s environmental review to 

comply with HUD regulations (e.g., 

publication or posting requirements for 

Notice of Finding of No Significant Impact 

(FONSI), Notice of Intent to Request Release 

of Funds (NOI–RROF), concurrent or 

combined notices, or HUD approval period 

for objections) if the activity is modified so 

the other agency’s environmental review no 

longer covers the activity. The recipient’s 

environmental review obligations are 

considered complete when adopting another 

agency’s environmental review. To be 

adequate: 

1. The grantee must obtain a completed 

electronic or paper copy of the Federal 

agency’s review and retain a copy in its 

environmental records. 

2. The grantee must notify HUD on the 

Request for Release of Funds (RROF) Form 

7015.15 (or the state, if the state is acting as 

HUD under 24 CFR 58.18) that another 

agency review is being used. The grantee 

must include the name of the other Federal 

agency, the name of the project, and the date 

of the project’s review as prepared by the 

other Federal agency. 

When permitted by the applicable 

appropriations acts, and notwithstanding 42 

U.S.C. 5304(g)(2), the Secretary or a state 

may, upon receipt of a Request for Release of 

Funds and Certification, immediately 

approve the release of funds for an activity 

or project assisted with CDBG–DR funds if 

the recipient has adopted an environmental 

review, approval, or permit under this 

section, or if the activity or project is 

categorically excluded from review under the 

National Environmental Policy Act of 1969 

(42 U.S.C. 4321 et seq.) (NEPA). 

IV.D.3. Historic preservation reviews. The 

responsible entity must comply with section 

106 of the National Historic Preservation Act 

of 1966 (54 U.S.C. 306108). Early 

coordination under section 106 is important 

to the recovery process and required by 24 

CFR 58.5(a). 

IV.D.4. Tiered environmental reviews. 

Tiering, as described at 40 CFR 1508.1(ff) and 

24 CFR 58.15, is a means of making the 

environmental review process more efficient 

by allowing parties to ‘‘eliminate repetitive 

discussions of the same issues, focus on the 

actual issues ripe for decision, and exclude 

from consideration issues already decided or 

not yet ripe at each level of environmental 

review’’ (40 CFR 1501.11(a)). Tiering is 

appropriate when a responsible entity is 

evaluating a single-family housing program 

with similar activities within a defined local 

geographic area and timeframe (e.g., 

rehabilitating single-family homes within a 

city district or county over the course of one 

to five years) but where the specific sites and 

activities are not yet known. Public notice 

and the Request for Release of Funds (HUDForm 7015.15) are processed at a broad-level, 

eliminating the need for publication at the 

site-specific level. However, funds cannot be 

spent or committed on a specific site or 

activity until the site-specific review has 

been completed and approved. 

IV.E. Flood Insurance Requirements 

Grantees, recipients, and subrecipients 

must implement procedures and mechanisms 

to ensure that assisted property owners 

comply with all flood insurance 

requirements, including the purchase and 

notification requirements described below, 

before providing assistance. 

IV.E.1. Flood insurance purchase 

requirements. When grantees use CDBG–DR 

funds to rehabilitate or reconstruct existing 

residential buildings in a Special Flood 

Hazard Area (or 100-year floodplain), the 

grantee must comply with applicable 

Federal, state, local, and tribal laws and 

regulations related to both flood insurance 

and floodplain management. The grantee 

must comply with section 102(a) of the Flood 

Disaster Protection Act of 1973 (42 U.S.C. 

4012a) which mandates the purchase of flood 

insurance protection for any HUD-assisted 

property within a Special Flood Hazard Area. 

Therefore, a HUD-assisted homeowner for a 

property located in a Special Flood Hazard 

Area must obtain and maintain flood 

insurance in the amount and duration 

prescribed by FEMA’s National Flood 

Insurance Program. 

IV.E.2. Federal assistance to owners 

remaining in a floodplain. 

IV.E.2.a. Prohibition on flood disaster 

assistance for failure to obtain and maintain 

flood insurance. Grantees must comply with 

section 582 of the National Flood Insurance 

Reform Act of 1994, as amended, (42 U.S.C. 

5154a), which prohibits flood disaster 

assistance in certain circumstances. No 

Federal disaster relief assistance made 

available in a flood disaster area may be used 

to make a payment (including any loan 

assistance payment) to a person for ‘‘repair, 

replacement, or restoration’’ for damage to 

any personal, residential, or commercial 

property if that person at any time has 

received Federal flood disaster assistance 

that was conditioned on the person first 

having obtained flood insurance under 

applicable Federal law and the person has 

subsequently failed to obtain and maintain 

flood insurance as required under applicable 

Federal law on such property. 

A grantee may not provide disaster 

assistance for the repair, replacement, or 

restoration of a property to a person who has 

failed to satisfy the Federal requirement to 

obtain and maintain flood insurance and 

must implement a process to verify and 

monitor for compliance with section 582 and 

the requirement to obtain and maintain flood 

insurance. Grantees are reminded that 

CDBG–DR funds may be used to assist 

beneficiaries in the purchase of flood 

insurance to comply with this requirement, 

subject to the requirements of cost 

reasonableness and other federal cost 

principles. 

IV.E.2.b. Prohibition on flood disaster 

assistance for households above 120 percent 

of AMI for failure to obtain flood insurance. 

When a homeowner located in the floodplain 

allows their flood insurance policy to lapse, 

it is assumed that the homeowner is unable 

to afford insurance and/or is accepting 

responsibility for future flood damage to the 

home. Higher income homeowners who 

reside in a floodplain, but who failed to 

secure or decided to not maintain their flood 

insurance, should not be assisted at the 

expense of lower income households. To 

ensure that adequate recovery resources are 

available to assist lower income homeowners 

who reside in a floodplain but who are 

unlikely to be able to afford flood insurance, 

the Secretary finds good cause to establish an 

alternative requirement. 

The alternative requirement to 42 U.S.C. 

5305(a)(4) is as follows: Grantees receiving 

CDBG–DR funds are prohibited from 

providing CDBG–DR assistance for the 

rehabilitation/reconstruction of a house, if (i) 

the combined household income is greater 

than either 120 percent of AMI or the 

national median, (ii) the property was located 

in a floodplain at the time of the disaster, and 

(iii) the property owner did not obtain flood 

insurance on the damaged property, even 

when the property owner was not required to 

obtain and maintain such insurance. 

IV.E.2.c. Responsibility to inform property 

owners to obtain and maintain flood 

insurance. Section 582 of the National Flood 

Insurance Reform Act of 1994, as amended, 


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(42 U.S.C. 5154a) is a statutory requirement 

that property owners receiving disaster 

assistance that triggers the flood insurance 

purchase requirement have a statutory 

responsibility to notify any transferee of the 

requirement to obtain and maintain flood 

insurance and to maintain such written 

notification in the documents evidencing the 

transfer of the property, and that the 

transferring owner may be liable if he or she 

fails to do so. A grantee or subrecipient 

receiving CDBG–DR funds must notify 

property owners of their responsibilities 

under section 582. 

IV.F. URA, Section 104(d), and Related CDBG 

Program Requirements 

Activities and projects undertaken with 

CDBG–DR funds may be subject to the URA, 

section 104(d) of the HCDA (42 U.S.C. 

5304(d)), and CDBG program requirements 

related to displacement, relocation, 

acquisition, and replacement of housing, 

except as modified by waivers and 

alternative requirements provided in this 

notice. The implementing regulations for the 

URA are at 49 CFR part 24. The regulations 

implementing section 104(d) are at 24 CFR 

part 42. The regulations for applicable CDBG 

program requirements are at 24 CFR 570.488 

and 24 CFR 570.606. HUD is waiving or 

providing alternative requirements in this 

section for the purpose of promoting the 

availability of decent, safe, and sanitary 

housing with respect to the use of CDBG–DR 

funds allocated under the Consolidated 

Notice. 

IV.F.1. Section 104(d) one-for-one 

replacement of lower-income dwelling units. 

One-for-one replacement requirements at 

section 104(d)(2)(A)(i) and (ii) and 104(d)(3) 

of the HCDA and 24 CFR 42.375 are waived 

for owner-occupied lower-income dwelling 

units that are damaged by the disaster and 

not suitable for rehabilitation. The section 

104(d) one-for-one replacement housing 

requirements apply to occupied and vacant 

occupiable lower-income dwelling units 

demolished or converted in connection with 

a CDBG assisted activity. This waiver 

exempts all disaster-damaged owneroccupied lower-income dwelling units that 

meet the grantee’s definition of ‘‘not suitable 

for rehabilitation,’’ from the one-for-one 

replacement housing requirements of 24 CFR 

42.375. Before carrying out activities that 

may be subject to the one-for-one 

replacement housing requirements, the 

grantee must define ‘‘not suitable for 

rehabilitation’’ in its action plan or in 

policies/procedures governing these 

activities. Grantees are reminded that tenantoccupied and vacant occupiable lowerincome dwelling units demolished or 

converted to another use other than lowerincome housing in connection with a CDBG– 

DR assisted activity are generally subject to 

one-for-one replacement requirements at 24 

CFR 42.375 and that these provisions are not 

waived. 

HUD is waiving the section 104(d) one-forone replacement requirement for owneroccupied lower-income dwelling units that 

are damaged by the disaster and not suitable 

for rehabilitation because the one-for-one 

replacement requirements do not account for 

the large, sudden changes that a major 

disaster may cause to the local housing stock, 

population, or economy. Disaster-damaged 

housing structures that are not suitable for 

rehabilitation can pose a threat to public 

health and safety and to economic 

revitalization. Prior to the implementation of 

this waiver and alternative requirement, 

grantees must reassess post-disaster 

population and housing needs to determine 

the appropriate type and amount of lowerincome dwelling units (both rental and 

owner-occupied units) to rehabilitate and/or 

reconstruct. Grantees should note that the 

demolition and/or disposition of public 

housing units continue to be subject to 

section 18 of the United States Housing Act 

of 1937, as amended, and 24 CFR part 970. 

IV.F.2. Section 104(d) relocation 

assistance. The relocation assistance 

requirements at section 104(d)(2)(A)(iii) and 

(B) of the HCDA and 24 CFR 42.350, are 

waived to the extent that an eligible 

displaced person, as defined under 24 CFR 

42.305 of the section 104(d) implementing 

regulations, may choose to receive either 

assistance under the URA and implementing 

regulations at 49 CFR part 24, or assistance 

under section 104(d) and implementing 

regulations at 24 CFR 42.350. This waiver 

does not impact a person’s eligibility as a 

displaced person under section 104(d), it 

merely limits the amounts and types of 

relocation assistance that a section 104(d) 

eligible displaced person is eligible to 

receive. A section 104(d) eligible displaced 

person is eligible to receive the amounts and 

types of assistance for displaced persons 

under the URA, as may be modified by the 

waivers and alternative requirements in this 

notice for activities related to disaster 

recovery. Without this waiver, disparities 

exist in relocation assistance associated with 

activities typically funded by HUD and 

FEMA (e.g., buyouts and relocation). Both 

FEMA and CDBG funds are subject to the 

requirements of the URA; however, CDBG 

funds are subject to section 104(d), while 

FEMA funds are not. This limited waiver of 

the section 104(d) relocation assistance 

requirements assures uniform and equitable 

treatment for individuals eligible to receive 

benefits under Section 104(d) by establishing 

that all forms of relocation assistance to those 

individuals must be in the amounts and for 

the types of assistance provided to displaced 

persons under URA requirements. 

IV.F.3. URA replacement housing 

payments for tenants. The requirements of 

sections 204 and 205 of the URA (42 U.S.C. 

4624 and 42 U.S.C. 4625), and 49 CFR 

24.2(a)(6)(vii), 24.2(a)(6)(ix), and 24.402(b) 

are waived to the extent necessary to permit 

a grantee to meet all or a portion of a 

grantee’s replacement housing payment 

obligation to a displaced tenant by offering 

rental housing through a rental housing 

program subsidy (to include, but not limited 

to, a housing choice voucher), provided that 

comparable replacement dwellings are made 

available to the tenant in accordance with 49 

CFR 24.204(a) where the owner is willing to 

participate in the program and the period of 

authorized assistance is at least 42 months. 

This waiver and alternative requirement is 

subject to the following: if assistance is 

provided through a HUD program, it is 

subject to the applicable HUD program 

requirements, including the requirement that 

the tenant must be eligible for the rental 

housing program. Failure to grant this waiver 

would impede disaster recovery whenever 

rental program subsidies are available but 

funds for cash replacement housing 

payments are limited and such payments are 

required by the URA to be based on a 42- 

month term. 

IV.F.4. URA voluntary acquisition— 

homebuyer primary residence purchase. 

Grantees may implement disaster recovery 

program activities that provide financial 

assistance to eligible homebuyers to purchase 

and occupy residential properties as their 

primary residence. Such purchases are 

generally considered voluntary acquisitions 

under the URA and subject to the URA 

regulatory requirements at 49 CFR 

24.101(b)(2). For CDBG–DR, 49 CFR 

24.101(b)(2) is waived to the extent that it 

applies to a homebuyer, who does not have 

the power of eminent domain, and uses 

CDBG–DR funds in connection with the 

voluntary purchase and occupancy of a home 

the homebuyer intends to make their primary 

residence. This waiver is necessary to reduce 

burdensome administrative requirements for 

homebuyers following a disaster. Tenants 

displaced by these voluntary acquisitions 

may be eligible for relocation assistance. 

IV.F.5. CDBG displacement, relocation, 

acquisition, and replacement housing 

program regulations—Optional relocation 

assistance. The regulations at 24 CFR 

570.606(d) are waived to the extent that they 

require optional relocation policies to be 

established at the grantee level. Unlike with 

the regular CDBG program, states may carry 

out disaster recovery activities directly or 

through subrecipients, but 24 CFR 570.606(d) 

does not account for this distinction. This 

waiver makes clear that grantees receiving 

CDBG–DR funds may establish optional 

relocation policies or permit their 

subrecipients to establish separate optional 

relocation policies. The written policy must: 

be available to the public, describe the 

relocation assistance that the grantee, state 

recipient (i.e., a local government receiving a 

subgrant from the state through a method of 

distribution), or subrecipient (as applicable) 

has elected to provide, and provide for equal 

relocation assistance within each class of 

displaced persons according to 24 CFR 

570.606(d). This waiver is intended to 

provide states with maximum flexibility in 

developing optional relocation policies with 

CDBG–DR funds. 

IV.F.6. Waiver of Section 414 of the 

Stafford Act. Section 414 of the Stafford Act 

(42 U.S.C. 5181) provides that 

‘‘Notwithstanding any other provision of law, 

no person otherwise eligible for any kind of 

replacement housing payment under the 

Uniform Relocation Assistance and Real 

Property Acquisition Policies Act of 1970 

(Pub. L. 91–646) [42 U.S.C. 4601 et seq.] 

[‘‘URA’’] shall be denied such eligibility as a 

result of his being unable, because of a major 

disaster as determined by the President, to 

meet the occupancy requirements set by [the 

URA].’’ Accordingly, homeowner occupants 

and tenants displaced from their homes as a 


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result of the identified disasters and who 

would have otherwise been displaced as a 

direct result of any acquisition, 

rehabilitation, or demolition of real property 

for a federally funded program or project may 

become eligible for a replacement housing 

payment notwithstanding their inability to 

meet occupancy requirements prescribed in 

the URA. Section 414 of the Stafford Act and 

its implementing regulation at 49 CFR 

24.403(d)(1) are waived to the extent that 

they would apply to real property 

acquisition, rehabilitation, or demolition of 

real property for a CDBG–DR funded project 

commencing more than one year after the 

date of the latest applicable Presidentially 

declared disaster undertaken by the grantees, 

or subrecipients, provided that the project 

was not planned, approved, or otherwise 

underway before the disaster. 

For purposes of this waiver, a CDBG–DR 

funded project shall be determined to have 

commenced on the earliest of: (1) the date of 

an approved Request for Release of Funds 

and certification; (2) the date of completion 

of the site-specific review when a program 

utilizes Tiering; or (3) the date of sign-off by 

the approving official when a project 

converts to exempt under 24 CFR 

58.34(a)(12). 

The waiver will simplify the 

administration of the disaster recovery 

process and reduce the administrative 

burden associated with the implementation 

of Stafford Act Section 414 requirements for 

projects commencing more than one year 

after the date of the Presidentially declared 

disaster considering most of such persons 

displaced by the disaster will have returned 

to their dwellings or found another place of 

permanent residence. 

This waiver does not apply with respect to 

persons that meet the occupancy 

requirements to receive a replacement 

housing payment under the URA nor does it 

apply to persons displaced or relocated 

temporarily by other HUD-funded programs 

or projects. Such persons’ eligibility for 

relocation assistance and payments under the 

URA is not impacted by this waiver. 

IV.F.7. RARAP Section 104(d). CDBG–DR 

grantees must certify that they have in effect 

and are following a RARAP as required by 

section 104(d)(1) and (2) of the HCDA and 24 

CFR 42.325. In addition to the requirements 

in 24 CFR 42.325 and 24 CFR 570.488 or 24 

CFR 570.606(c), as applicable, HUD is 

specifying the following alternative 

requirements: 

Grantees who are following an existing 

RARAP for CDBG purposes must either: (1) 

amend their existing RARAP; or (2) create a 

separate RARAP for CDBG–DR purposes, to 

reflect the following requirements and 

applicable waivers and alternative 

requirements as modified by the 

Consolidated Notice. 

Grantees who do not have an existing 

RARAP in place because they do not manage 

CDBG programs must create a separate 

RARAP for CDBG–DR purposes, to reflect the 

following CDBG–DR requirements and 

applicable waivers and alternative 

requirements as modified by the 

Consolidated Notice. 

(1) RARAP requirements for CDBG–DR. As 

each grantee establishes and supports 

feasible and cost-effective recovery efforts to 

make communities more resilient against 

future disasters, the CDBG–DR RARAP must 

describe how the grantee plans to minimize 

displacement of members of families and 

individuals from their homes and 

neighborhoods as a result of any CDBG–DR 

assisted activities, including disaster 

recovery activities where displacement can 

be prevented (e.g., housing rehabilitation 

programs). Across disaster recovery 

activities—such as buyouts and other eligible 

acquisition activities, where minimizing 

displacement is not reasonable, feasible, or 

cost-efficient and would not help prevent 

future or repetitive loss—the grantee must 

describe how it plans to minimize the 

adverse impacts of displacement. 

The description shall focus on proposed 

disaster recovery activities that may directly 

or indirectly result in displacement and the 

assistance that shall be required for those 

displaced. This description must focus on 

relocation assistance under the URA and its 

implementing regulations at 49 CFR part 

24.104(d) and implementing regulations at 24 

CFR part 42 (to the extent applicable), 24 

CFR 570.488 and/or 24 CFR 570.606, and 

relocation assistance pursuant to this section 

of the Consolidated Notice, as well as any 

other assistance being made available to 

displaced persons. The CDBG–DR RARAP 

must include a description of how the 

grantee will plan programs or projects in 

such a manner that recognizes the substantial 

challenges experienced by displaced 

individuals, families, businesses, farms, and 

nonprofit organizations and develop 

solutions to minimize displacement or the 

adverse impacts of displacement especially 

among vulnerable populations. The 

description must be scoped to the complexity 

and nature of the anticipated displacing 

activities, including the evaluation of the 

grantee’s available resources to carry out 

timely and orderly relocations in compliance 

with all applicable relocation requirements. 

V. Performance Reviews 

Under 42 U.S.C. 5304(e) and 24 CFR 

1003.506(a), the Secretary shall, at least on an 

annual basis, make such reviews and audits 

as may be necessary or appropriate to 

determine whether the grantee has carried 

out its activities in a timely manner 

(consistent process to meet its expenditure 

requirement), whether the grantee’s activities 

and certifications are carried out in 

accordance with the requirements and the 

primary objectives of the HCDA and other 

applicable laws, and whether the grantee has 

the continuing capacity to carry out those 

activities in a timely manner. 

V.A. Timely Distribution and Expenditure of 

Funds 

HUD waives the provisions at 24 CFR 

570.494 and 570.902 regarding timely 

distribution and expenditure of funds, and 

establishes an alternative requirement 

providing that each grantee must expend 100 

percent of its allocation within six years of 

the date HUD signs the grant agreement. HUD 

may extend the period of performance 

administratively, if good cause for such an 

extension exists at that time, as requested by 

the grantee, and approved by HUD. When the 

period of performance has ended, HUD will 

close out the grant and any remaining funds 

not expended by the grantee on appropriate 

programmatic purposes will be recaptured by 

HUD. 

V.B. Review of Continuing Capacity 

Upon a determination by HUD that the 

grantee has not carried out its CDBG–DR 

activities and certifications in accordance 

with the requirements in the Consolidated 

Notice, HUD will undertake a further review 

to determine if the grantee has the continuing 

capacity to carry out its activities in a timely 

manner. In making this determination, HUD 

will consider the nature and extent of the 

recipient’s performance deficiencies, the 

actions taken by the recipient to address the 

deficiencies, and the success or likely 

success of such actions. HUD may then apply 

the following corrective and remedial actions 

as appropriate: 

V.B.1. Corrective and remedial actions. To 

effectively administer the CDBG–DR program 

in a manner that facilitates recovery, 

particularly the alternative requirements 

permitting states to act directly to carry out 

eligible activities, HUD is waiving 42 U.S.C. 

5304(e) to the extent necessary to establish 

the following alternative requirement: HUD 

may undertake corrective and remedial 

actions for states in accordance with the 

authorities for CDBG Entitlement grantees in 

subpart O (including corrective and remedial 

actions in 24 CFR 570.910, 570.911, and 

570.913) or under subpart I of the CDBG 

regulations at 24 CFR part 570. In response 

to a deficiency, HUD may issue a warning 

letter followed by a corrective action plan 

that may include a management plan which 

assigns responsibility for further 

administration of the grant to specific entities 

or persons. Failure to comply with a 

corrective action may result in the 

termination, reduction, or limitation of 

payments to grantees receiving CDBG–DR 

funds. 

V.B.2. Reduction, withdrawal, or 

adjustment of a grant, or other appropriate 

action. Before a reduction, withdrawal, or 

adjustment of a CDBG–DR grant, or other 

actions taken pursuant to this section, the 

recipient shall be notified of the proposed 

action and be given an opportunity for an 

informal consultation. Consistent with the 

procedures described in the Consolidated 

Notice, HUD may adjust, reduce, or withdraw 

the CDBG–DR grant (except funds that have 

been expended for eligible, approved 

activities) or take other actions as 

appropriate. 

V.B.3. Additional criteria and specific 

conditions to mitigate risk. To ensure 

effective grantee implementation of the 

financial controls, procurement processes, 

and other procedures that are the subject of 

the certification by the Secretary, HUD has 

and may continue to establish specific 

criteria and conditions for each grant award 

as provided for at 2 CFR 200.206 and 

200.208, respectively, to mitigate the risk of 

the grant. The Secretary shall specify any 

such criteria and the resulting conditions in 

the grant conditions governing the award. 

These criteria may include, but need not be 


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limited to, a consideration of the internal 

control framework established by the grantee 

to ensure compliant implementation of its 

financial controls, procurement processes 

and payment of funds to eligible entities, as 

well as the grantee’s risk management 

strategy for information technology systems 

established to implement CDBG–DR funded 

programs. Additionally, the Secretary may 

amend the grant conditions to mitigate risk 

of a grant award at any point at which the 

Secretary determines a condition to be 

required to protect the Federal financial 

interest or to advance recovery. 

V.C. Grantee Reporting Requirements in the 

DRGR System 

V.C.1. DRGR-related waivers and 

alternative requirements. The Consolidated 

Notice waives the requirements for 

submission of a performance report pursuant 

to 42 U.S.C. 12708(a), 24 CFR 91.520, and 

annual status and evaluation reports that are 

due each fiscal year under 24 CFR 

1003.506(a). Alternatively, HUD is requiring 

that grantees enter information in the DRGR 

system on a quarterly basis through the 

performance reports. The information in 

DRGR and the performance reports must 

contain sufficient detail to permit HUD’s 

review of grantee performance and to enable 

remote review of grantee data to allow HUD 

to assess compliance and risk. 

At a minimum, each grantee must: 

a. Enter its action plan and amendments as 

described in III.C.1, including performance 

measures, into the Public Action Plan in 

DRGR; 

b. Enter activities into the DRGR Action 

Plan at a level of detail sufficient to allow 

HUD to determine grantee compliance (when 

the activity type, national objective, and the 

organization that will be responsible for the 

activity is known); 

c. Categorize activities in DRGR under a 

‘‘project’’; 

d. Enter into the DRGR system summary 

information on grantees’ monitoring visits 

and reports, audits, and technical assistance 

it conducts as part of its oversight of its 

disaster recovery programs; 

e. Use the DRGR system to draw grant 

funds for each activity; 

f. Use the DRGR system to track program 

income receipts, disbursements, revolving 

loan funds, and leveraged funds (if 

applicable); 

g. Submit a performance report through the 

DRGR system no later than 30 days following 

the end of each calendar quarter. For all 

activities, the address of each CDBG–DR 

assisted property must be recorded in the 

performance report; and 

h. Publish a version of the performance 

report that omits personally identifiable 

information reported in the performance 

reports submitted to HUD on the grantee’s 

official website within three days of 

submission to HUD, or in the event a 

performance report is rejected by HUD, 

publish the revised version, as approved by 

HUD, within three days of HUD approval. 

The grantee’s first performance report is 

due after the first full quarter after HUD signs 

the grant agreement. Performance reports 

must be submitted on a quarterly basis until 

all funds have been expended and all 

expenditures and accomplishments have 

been reported. If a satisfactory report is not 

submitted in a timely manner, HUD may 

suspend access to CDBG–DR funds until a 

satisfactory report is submitted, or may 

withdraw and reallocate funding if HUD 

determines, after notice and opportunity for 

a hearing, that the jurisdiction did not submit 

a satisfactory report. 

[FR Doc. 2023–25875 Filed 11–24–23; 8:45 am] 

BILLING CODE 4210–67–P 


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