1754 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

1 View the request for information notice (FR– 

6336–N–01) here: https://www.govinfo.gov/content/ 

pkg/FR-2022-12-20/pdf/2022-27547.pdf. 

2 View a summary of the comments received, and 

HUD’s responses here: https://www.hud.gov/ 

program_offices/comm_planning/cdbg-dr/ 

universal_notice_grantees. 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–6489–N–01] 

Common Application, Waivers, and 

Alternative Requirements for 

Community Development Block Grant 

Disaster Recovery Grantees: The 

Universal Notice 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, HUD. 

ACTION: Notice. 

SUMMARY: This notice contains a 

preamble and the Community 

Development Block Grant Disaster 

Recovery Universal Notice: Waivers and 

Alternative Requirements (the 

‘‘Universal Notice’’). The Universal 

Notice describes the processes, 

procedures, timelines, waivers, and 

alternative requirements that U.S. 

Department of Housing and Urban 

Development (HUD) intends to 

implement with each allocation of 

Community Development Block Grant 

Disaster Recovery (CDBG–DR) funding 

after a qualifying presidential disaster 

declaration. Specifically, following the 

appropriation of CDBG–DR funds for 

qualifying disasters, HUD will publish 

an Allocation Announcement Notice in 

the Federal Register that incorporates, 

via cross-reference, the waivers and 

alternative requirements provided in the 

Universal Notice, as appropriate, along 

with any other new requirements 

imposed by the specific appropriation. 

This notice also describes the grant 

award process, pre-award certification 

submissions, criteria for Action Plan 

approval, and eligible disaster recovery 

activities to streamline post-disaster 

processes for future grantees. By 

publishing the Universal Notice, HUD 

intends to provide grantees and the 

public with increased transparency, 

consistency, and more timely access to 

CDBG–DR funds, helping to minimize 

program delays and accelerate recovery. 

DATES: Applicability Date: January 13, 

2025. 

FOR FURTHER INFORMATION CONTACT: 

Tennille Parker, Director, Office of 

Disaster Recovery (ODR), HUD, 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/telecommunicationsrelay-service-trs. Email inquiries may be 

sent to Disaster_Recovery@hud.gov. 

Table of Contents 

Preamble 

Community Development Block Grant 

Disaster Recovery Universal Notice: 

Waivers and Alternative Requirements 

(the ‘‘Universal Notice’’) 

I. Phase One: The Action Plan 

I.A. CDBG–DR Action Plans Defined 

I.B. Admin Action Plan 

I.C. Action Plan 

II. Phase Two: Financial Certification and 

Oversight of Funds 

II.A. Certification of Adequate Financial 

Controls and Procurement Processes, and 

Procedures for Proper Grant Management 

II.B. Relying on Prior Financial 

Certification Submissions 

II.C. Obligation and Expenditure of Funds 

III. Phase Three: Implementation of Universal 

Notice Requirements 

III.A. Policies and Procedures—Universal 

Notice Requirements 

III.B. Grant Administration 

III.C. State Grantee Only Requirements 

III.D. Waivers and Alternative 

Requirements Related to Eligible 

Activities 

III.E. Ineligible Activities in CDBG–DR 

III.F. Performance Reviews 

III.G. Grantee Reporting Requirements in 

the Disaster Recovery Grant Reporting 

(DRGR) System 

IV. Assistance Listing Numbers 

V. Finding of No Significant Impact 

Appendix A. Certifications Waiver and 

Alternative Requirement for Admin 

Action Plan Submission 

Appendix B. Certifications Waiver and 

Alternative Requirement for Action Plan 

Submission 

Appendix C. Duplication of Benefits (DOB) 

Appendix D. Detailed Table of Contents to 

the Universal Notice 

SUPPLEMENTARY INFORMATION: 

Preamble 

Purpose and Policy Objectives 

HUD has developed this preamble 

and the Universal Notice, to assist 

States, local governments, Indian Tribes, 

CDBG–DR subrecipients, and the public 

in planning for the award of CDBG–DR 

funds. Because not all the requirements 

in the Universal Notice are appropriate 

or applicable to Indian Tribes, HUD will 

publish an Addendum to the Universal 

Notice at a later date to establish 

requirements that will apply when 

Indian Tribes receive a CDBG–DR grant 

directly from HUD. This process will 

allow HUD to ensure that the 

requirements imposed are fair and 

consistent with the Indian Community 

Development Block Grant (ICDBG) 

Program. 

In December 2022, HUD published a 

Request for Information (RFI) for HUD’s 

Community Development Block Grant 

Disaster Recovery (CDBG–DR) Rules, 

Waivers, and Alternative Requirements 

(FR–6336–N–01) 1 seeking public input 

to strengthen and improve CDBG–DR 

requirements. Based on the feedback 

received through the RFI,2 HUD is 

establishing a revised process for 

CDBG–DR grants for qualifying disasters 

whereby HUD will incorporate 

applicable provisions of the Universal 

Notice, to the extent they are consistent 

with future appropriations acts, in a 

Federal Register notice that announces 

allocations of the appropriated CDBG– 

DR funds (the ‘‘Allocation 

Announcement Notice’’). The 

Allocation Announcement Notice 

(AAN) will impose the waivers and 

alternative requirements of the 

Universal Notice for the subject CDBG– 

DR grants. The AAN will also add or 

modify requirements of the Universal 

Notice as necessary to comply with 

statutory provisions. 

The Universal Notice has no legal 

effect on a CDBG–DR grant until funds 

are appropriated by Congress and the 

appropriation authorizes the HUD 

Secretary to waive or specify alternative 

requirements for the assistance, and the 

AAN that incorporates appropriate 

provisions of the Universal Notice is 

published by the Department and goes 

into effect. HUD will make the required 

findings in support of the waivers and 

alternative requirements incorporated 

into and made effective through AANs 

contemporaneously with the 

publication of each AAN. Because the 

Universal Notice has no legal effect on 

its own but rather requires authority 

provided by Congress through enacting 

special disaster appropriations and 

contemporaneous publication of an 

AAN by HUD, this is being published as 

a notice and is not a rulemaking. 

The Universal Notice is designed to 

inform potential CDBG–DR grantees and 

other stakeholders about each phase of 

the CDBG–DR grant process, including 

but not limited to, pre-award grantee 

submissions; grantee steps and 

timelines; and Action Plan 

development, submittal, and 

implementation. 

Through the Universal Notice, HUD 

seeks to: 

• Outline a comprehensive and 

uniform set of waivers and alternative 

requirements that HUD intends to apply 

to govern future allocations of CDBG– 

DR funds, including all timelines, 

documentation, and other requirements 


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3 View 24 CFR part 570—Community 

Development Block Grants Regulations here: 

https://www.ecfr.gov/current/title-24/subtitle-B/ 

chapter-V/subchapter-C/part-570. 

4 View HUD’s policy concerning the procedures 

that govern the waiver of regulations and directives 

issued by HUD here: https://www.govinfo.gov/ 

content/pkg/FR-2024-08-06/pdf/2024-17034.pdf. 

for pre-award grantee submission to 

reduce the administrative burden for 

future CDBG–DR grantees and assigned 

HUD Community Planning and 

Development (CPD) staff member (e.g., 

CPD Representative, CPD Specialist, 

etc. . . .); 

• Encourage intentional and early 

coordination between CDBG–DR 

grantees; other agencies/departments at 

the Federal, State, or local level; and 

other regional or local planning efforts 

to better align disaster recovery 

assistance and projects with the goals of 

regional redevelopment plans, resilience 

plans, long-term recovery plans, and 

State and local Hazard Mitigation Plans 

(HMP); 

• Increase awareness of the 

availability of disaster recovery 

assistance and advance fair disaster 

recovery outcomes, including 

community engagement efforts and predisaster planning for targeted assistance 

to historically marginalized groups that 

can be adversely affected by disasters 

that often exacerbate inequalities for 

residents of underserved communities, 

members of protected classes under fair 

housing and civil rights laws, and 

vulnerable populations; and 

• Improve long-term community 

resilience by fully integrating resilience 

planning and hazard mitigation 

activities into disaster recovery to 

reduce the impacts of a changing 

climate and future disasters, encourage 

green recovery efforts (focusing on 

healthier water and air, and effective 

debris and waste management), address 

environmental justice concerns 

associated with disaster recovery efforts, 

and address recovery needs for 

accessible, resilient, and affordable 

housing for low- and moderate-income 

persons. 

Management and Oversight 

Prior to accessing CDBG–DR funding, 

grantees must demonstrate that they 

have the capacity to administer funds in 

a compliant manner as described by the 

Universal Notice. Consistent with 2 CFR 

200.206(b) of the Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards (Uniform 

Requirements), HUD will evaluate each 

CDBG–DR grantee’s capacity to 

effectively manage its funds through a 

review of its pre-award submissions as 

provided in section II. of the Universal 

Notice, which includes the grantee’s 

submissions in response to the 

Financial Management and Grant 

Compliance Certification Requirements 

in section II.A.1. of the Universal 

Notice. 

Authority To Grant Waivers 

CDBG–DR grants are generally subject 

to CDBG regulations outlined in 24 CFR 

part 570.3 The appropriations acts (i.e., 

public laws) that provide CDBG–DR 

funds typically allow the Secretary to 

waive requirements 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 the use by the grantee of 

CDBG–DR funds. Generally, the 

appropriations acts specify that there 

are four types of requirements that the 

Secretary cannot waive under that 

authority, these include fair housing, 

nondiscrimination, labor standards, and 

the environment. However, HUD may 

also exercise its regulatory waiver 

authority under 24 CFR 5.110, 91.600, 

and 570.5.4

The waivers and alternative 

requirements in the Universal Notice 

draw from HUD’s knowledge of the 

needs of grantees, public feedback, and 

HUD’s previously established waivers 

and alternative requirements and the 

determinations by the Secretary 

regarding good cause and consistency 

with the overall purposes of title I of the 

HCDA that supported the waivers and 

alternative requirements. Historically, 

HUD has established waivers and 

alternative requirements based on 

findings of good cause that they 

provided additional flexibility to 

grantees in program design and 

implementation, supported a full and 

swift recovery from the most devasting 

disasters, and streamlined 

administrative requirements that would 

otherwise increase the time it takes for 

disaster funds to reach those most in 

need. 

Unless otherwise provided, HUD 

intends to make these same findings of 

good cause when the waivers and 

alternative requirements in the 

Universal Notice are incorporated into 

and made effective through later AANs. 

HUD will provide a statement regarding 

the Secretary’s finding of good cause 

and consistency with the purpose of 

title I of the HCDA, or such other 

applicable standard, in each AAN. If 

HUD’s findings of good cause differ on 

certain waivers or alternative 

requirements from the findings 

identified in this Universal Notice, HUD 

will include the updated findings in 

support of those waivers and alternative 

requirements in the AAN. CDBG–DR 

activities will be governed by the 

regulations cited in the requirements of 

this notice, as incorporated in the 

applicable AAN, as may be amended. 

Grantees who have received previous 

allocations of CDBG–DR funds must 

follow the requirements outlined in 

their applicable Federal Register 

notice(s). However, any CDBG–DR 

grantee may request waivers and 

alternative requirements to better align 

requirements across grants, as long as 

good cause is provided. In addition, the 

waivers and alternative requirements 

herein do not apply to funds provided 

under the annual State or Entitlement 

CDBG programs or those provided 

under any other component of the 

CDBG program, such as the Section 108 

Loan Guarantee Program. 

After Congress appropriates CDBG– 

DR funds and HUD announces the 

allocations, grantees may request that 

HUD grant additional waivers and 

alternative requirements to address 

specific needs related to their recovery 

activities. Waiver requests must be 

accompanied by supporting data and 

must be submitted to the assigned HUD 

CPD staff member and to the ODR 

mailbox at Disaster_Recovery@hud.gov. 

HUD will aim to publish granteespecific waivers and alternative 

requirements at least quarterly in the 

Federal Register or on HUD’s website. 

Grantees may consult with their 

assigned HUD CPD staff member for 

anticipated Federal Register publication 

timelines ahead of any waiver request 

submittal. 

Overview of Grant Life Cycle 

To begin expending CDBG–DR funds, 

the following expedited steps are 

necessary as broken out by each phase: 

(1) Phase One: The Action Plan 

a. Grantee follows its citizen 

participation plan for disaster recovery 

(I.C.2.). 

i. Grantee consults with stakeholders, 

including all required consultations 

(I.C.2.a.). 

ii. Grantee publishes its Action Plan 

on its website for no less than 30 

calendar days to solicit public comment 

(I.C.2.b.). 

iii. Grantee responds to public 

comments and incorporates feedback 

into its Action Plan. 

b. Grantee submits its Action Plan 

(including the SF–424, SF–424B and 

SF–424D, as applicable) within 90 

calendar days from the applicability 

date of the AAN (I.C.3.). 

c. Grantee requests and receives 

Disaster Recovery Grant Reporting 

(DRGR) system access (if the grantee 


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does not already have DRGR access) and 

may enter activities into the DRGR 

system before or after submission of the 

Action Plan to HUD. 

d. HUD reviews the Action Plan 

(allotted 45 calendar days from date of 

receipt) and approves the Action Plan 

according to criteria identified in this 

notice (I.C.5.). 

e. HUD sends an Action Plan approval 

letter to the grantee. If the Action Plan 

is not approved, HUD will notify the 

grantee of the deficiencies. The grantee 

must then resubmit the Action Plan 

within 45 calendar days of the written 

notification. HUD will respond to 

approve or disapprove the Action Plan 

within 30 calendar days of receiving the 

revisions or resubmission. 

(2) Phase Two: Financial Certification 

and Oversight of Funds. 

a. Within 135 calendar days of the 

applicability date of the AAN, the 

grantee submits documentation for the 

certification of financial controls and 

procurement processes, and adequate 

procedures for grant management (II.A.). 

b. HUD will review the grantee’s 

documentation for the certification of 

financial controls and procurement 

processes, and adequate procedures for 

grant management or any provided 

updates if the grantee is relying on a 

prior certification (allotted 45 calendar 

days from date of receipt). 

c. The Secretary will certify to the 

proficiency of the grantee’s financial 

controls and procurement processes, 

and adequate procedures for grant 

management in accordance with the 

requirements and HUD will send the 

grantee the grant agreement. 

d. Grantee signs and returns the grant 

agreement to HUD. 

e. HUD signs and returns a fully 

executed grant agreement to the grantee 

with a period of performance identified. 

f. Grantee publishes the final HUDapproved Action Plan on its official 

disaster recovery website. 

g. HUD establishes the grantee’s line 

of credit. 

h. 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 in an 

approved DRGR Action Plan). 

i. The grantee may draw down funds 

from the line of credit for an activity 

after the Responsible Entity (1) 

completes an environmental review(s) 

pursuant to 24 CFR part 58 and receives 

from HUD or the State, as outlined in 24 

CFR 58.18, an approved Request for 

Release of Funds (RROF) and 

certification (as applicable), or (2) 

adopts another Federal agency’s 

environmental review and receives from 

HUD or the State an approved RROF 

and certification (as applicable). 

(3) Phase Three: Implementation of 

Universal Notice Requirements. 

a. Within one year from the 

applicability date of the AAN, the 

grantee must create and finalize policies 

and procedures for its housing 

programs. If the grantee is not funding 

housing programs, see section III.A. for 

more details. 

b. Within eighteen months from the 

applicability date of the AAN, the 

grantee must create and finalize policies 

and procedures governing the rest of its 

CDBG–DR funded programs (e.g., 

economic revitalization, public service, 

infrastructure programs, etc.). 

c. Within two years from the 

applicability date of the AAN, these 

policies and procedures will be subject 

to HUD review. 

d. The grantee should begin to draw 

down funds from DRGR no later than 

180 calendar days after HUD executes a 

grant agreement with the grantee (II.C.) 

or HUD approves the Action Plan and 

financial certification and oversight of 

funds, whichever is later. Additionally, 

all funds must be expended within six 

years of the date of obligation (III.F.1.). 

HUD provides additional flexibility to 

streamline access to CDBG–DR funds, 

through the following options: 

(1) Grantees may submit an Optional 

Action Plan for Program Administrative 

Costs (‘‘Admin Action Plan’’) to access 

administrative funds prior to the 

grantee’s submission of its Action Plan 

(I.B.). 

(2) Previous grantees covered by the 

Universal Notice or other prior notices 

may rely on their previous financial 

certification submissions as described in 

section II.B. 

There may be times when 

appropriations acts allow additional 

flexibilities for timing of financial 

certification and action plan 

submissions, signing of grant 

agreements, and the availability of 

administrative funds. HUD will adapt 

this grant life cycle to be in compliance 

with any additional flexibilities 

provided in the appropriations acts. 

Community Development Block Grant 

Disaster Recovery Universal Notice: 

Waivers and Alternative Requirements 

(the ‘‘Universal Notice’’) 

The Universal Notice outlines the 

waivers and alternative requirements 

that grantees are required to 

demonstrate compliance with over the 

course of three phases of the grant life 

cycle which include: (1) Phase One: The 

Action Plan, (2) Phase Two: Financial 

Certification and Oversight of Funds, 

and (3) Phase Three: Implementation of 

Universal Notice Requirements. Any 

references to the ‘‘Universal Notice’’ or 

‘‘this notice’’ in this document refer to 

sections I. through V. and the attached 

appendices. 

CDBG–DR grantees that are subject to 

the Universal Notice, must comply with 

all waivers and alternative 

requirements, unless expressly made 

inapplicable (e.g., a State only waiver 

does not apply to local governments). 

Except as described in applicable 

waivers and alternative requirements, 

the statutory and regulatory provisions 

governing the 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 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 (as defined under 42 

U.S.C. 5302(a)(24)), HUD waives the 

provisions of 24 CFR 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 

Universal Notice. 

Except as modified, statutory and 

regulatory provisions governing the 

Entitlement CDBG program shall apply 

to local government grantees (often 

referred to as units of local government 

in appropriations acts). Applicable 

Entitlement CDBG program regulations 

are found at 24 CFR 570, as described 

in § 570.1(a). 


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5 View HUD’s guidance on addressing Radon in 

the Environmental Review process published in 

CPD Notice 23–103 here: https://www.hud.gov/ 

sites/dfiles/CPD/documents/CPD_Notice_on_

Addressing_Radon_in_the_Environmental_Review_

Process.pdf. 

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 or 24 

CFR 570.490, as amended by the 

Universal Notice waivers and 

alternative requirements. All grantees 

must follow all cross-cutting 

requirements, as applicable, for all 

CDBG–DR funded activities including 

but not limited to the environmental 

requirements outlined in the Universal 

Notice,5 the Davis Bacon Act, Civil 

Rights Requirements, the Lead Safe 

Housing Rule, and the Uniform 

Relocation Assistance and Real Property 

Acquisition Policies Act of 1970, as 

amended (‘‘URA’’) and its implementing 

regulations. 

All grantees must maintain records of 

performance in DRGR, as described 

elsewhere in the Universal Notice. 

Additionally, grantees must comply 

with the requirements in the Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards at 2 CFR part 200, as 

amended (Uniform Requirements). 

Any references to ‘‘subrecipient’’ in 

this notice refer to the term as defined 

in 24 CFR 570.500(c). Subrecipients 

include, but are not limited to, nonprofit 

organizations, units of general local 

government, partner agencies, 

subgrantees, and Indian Tribes. 

I. Phase One: The Action Plan 

I.A. CDBG–DR Action Plans Defined 

The action plan is a key mechanism 

for grantees to inform the public and 

HUD of the intended use of the funds 

within their community and how this 

plan connects to the community’s 

remaining unmet needs and mitigation 

needs associated with the qualifying 

disaster(s). It is important that grantees 

understand the difference between the 

two action plans associated with CDBG– 

DR funds. 

• Admin Action Plan (Optional 

Action Plan for Program Administrative 

Costs): This is an optional submission 

that allows a grantee to access their 

funds for program administrative costs 

prior to the award of the full grant (e.g., 

to increase staffing and capacity to 

develop the required Action Plan). The 

Admin Action Plan has streamlined 

requirements, including no public 

comment period or deadline for 

submission, and is sent to HUD for 

review (as described in the applicable 

AAN). 

• Action Plan: The Action Plan is a 

required plan that a grantee must 

develop to have access to grant funds. 

The Action Plan must identify the use 

of all CDBG–DR funds—including 

criteria for eligibility and how the uses 

address long-term recovery needs, 

restoration of infrastructure and 

housing, economic revitalization, and 

mitigation in the most impacted and 

distressed (MID) areas. The Action Plan 

has a required 30-day public comment 

period, must be submitted within 90 

days of a grantee’s AAN, and is sent to 

HUD for review (the submission process 

will be described in the applicable 

AAN). References to the ‘‘Action Plan’’ 

shall mean the Action Plan required by 

the Universal Notice and not the 

consolidated plan or action plan 

required by 24 CFR part 91. 

I.B. Admin Action Plan 

Typically, CDBG–DR awards are all 

subject to a five percent administrative 

cap as specified by the appropriations 

acts and outlined in section III.B.3. of 

this notice. Recent appropriations acts 

have allowed the special treatment of 

administrative funds (as described in 

section III.B.3.a.) and allowed grantees 

to access funding for program 

administrative costs prior to the 

Secretary’s certification as described in 

section II.A. Note, the appropriations 

acts typically require that all CDBG–DR 

funds be used pursuant to an action 

plan. Grantees will follow the process 

described in this section, which 

includes the submission of the Admin 

Action Plan, to access funds for program 

administrative costs prior to the 

Secretary’s certification. 

I.B.1. Developing the Admin Action 

Plan. The grantee shall describe the use 

of all grant funds for administrative 

costs in the Admin Action Plan, 

including for any eligible pre-award 

program administrative costs the grantee 

plans to reimburse itself or its 

subrecipients as described in section 

III.B.14.a. The Admin Action Plan must 

include the criteria for eligibility of 

administrative activities and the amount 

to be budgeted for administrative 

activities. If a grantee submits the 

Admin Action Plan, the grantee must 

consider the need to cover program 

administrative costs over the life of the 

grant, which is six years from HUD’s 

signature on the initial grant agreement 

as described in section III.F.1. of this 

notice. Therefore, grantees are strongly 

encouraged to budget for these costs 

early in the grant lifecycle. 

I.B.2. Submission and publication of 

the Admin Action Plan. Normally, a 

grantee must publish any proposed 

action plan and substantial amendments 

to the plan for public comment. 

However, because the Admin Action 

Plan will only include program 

administrative costs, and to allow for a 

more streamlined process and timely 

awarding of grants, no public comment 

period is required. 

Therefore, for Admin Action Plans 

and substantial amendments to these 

plans only, the 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. 

Additionally, for Admin Action Plans 

only, grantees are not subject to the 

action plan requirements in section I.C. 

Grantees must publish the Admin 

Action Plan online when it is submitted 

to HUD (as described in the applicable 

AAN). The manner of publication of the 

Admin Action Plan must include 

prominent posting on the grantee’s 

official disaster recovery website and 

include any substantial amendments to 

the Admin Action Plan. When the 

grantee submits its Admin Action Plan 

or substantial amendment to the Admin 

Action Plan to HUD for approval, it 

must include the Standard Form 424 

(SF–424). There is no due date for the 

Admin Action Plan as it is optional and 

may be submitted any time prior to the 

grantee’s Action Plan. HUD will review 

the Admin Action Plan or substantial 

amendment to the Admin Action Plan 

within 15 calendar days from the date 

of receipt and determine whether to 

approve the Admin Action Plan per the 

criteria identified here in section I.B. of 

the Universal Notice. 

I.B.3. Entering administrative 

activities into DRGR. After HUD’s 

approval of the Admin Action Plan, the 

grantee enters the administrative 

activities from its approved Admin 

Action Plan (or substantial amendment 

to that plan) into the DRGR system, as 

described in section III.G. Grantees are 

required to populate their DRGR Action 

Plan since grant funds can only be 

drawn from the line of credit through 

projects and activities that are 

established in the DRGR system. This 

process will allow a grantee to access 

funds for program administrative costs 

while the grantee begins developing its 

Action Plan. 

I.B.4. Applicability of the Admin 

Action Plan. A grantee’s use of grant 

funds for program administrative costs 

before approval of the Action Plan must 


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6 View more information about how to access this 

data on HUD’s website here: https://www.hud.gov/ 

program_offices/comm_planning/cdbg-dr/datasharing. 

be consistent with the Admin Action 

Plan. Once the Action Plan is approved, 

the use of all grant funds must be 

consistent with the Action Plan. Upon 

HUD’s approval of the Action Plan, the 

optional Admin Action Plan shall only 

be relevant to administrative costs 

charged to the grant before the date of 

approval of the Action Plan. 

I.B.5. Admin Action Plan 

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 of 1990, as 

amended (42 U.S.C. 12706), and 

regulations at 24 CFR 91.225 and 91.325 

are waived and replaced with the 

following alternative requirement. Each 

grantee choosing to submit an Admin 

Action Plan must also complete the 

certifications in Appendix A and submit 

them with the Admin Action Plan. 

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 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 for program 

administrative costs before submitting 

other statutorily required certifications. 

I.C. Action Plan 

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 

Universal Notice and the applicable 

AAN. HUD will return all Action Plans 

that are substantially incomplete as 

described in section I.C.5. The Action 

Plan is substantially incomplete if the 

plan does not satisfy all the required 

elements identified in the Universal 

Notice and the applicable AAN. 

Grantees receiving an allocation are 

required to submit an Action Plan 

within 90 calendar days of the 

applicability date of the AAN, unless 

the grantee has requested, and HUD has 

approved an extension of the 

submission deadline. HUD will monitor 

the grantee’s actions and use of funds 

for consistency with the Action Plan, as 

well as meeting the performance and 

timeliness objectives therein. 

I.C.1. Developing the Action Plan. The 

Action Plan must identify the use of all 

CDBG–DR funding, including eligibility 

criteria for accessing the funds and how 

the proposed uses will address longterm recovery needs. At a minimum, the 

Action Plan must cover the impacts of 

the qualifying disaster, restoration of 

housing, infrastructure, economic 

revitalization, and mitigation in the MID 

areas. The CDBG–DR allocations are 

based on the unmet needs of specific 

communities, which are the least likely 

to fully recover without additional 

assistance. Therefore, it is critical that 

the Action Plan demonstrates the 

following, as described in the referenced 

sections: 

1. An unmet needs assessment 

(review section I.C.1.a.). 

2. A mitigation needs assessment 

(review section I.C.1.b.). 

3. A fair housing and civil rights data 

assessment (review section I.C.1.c.). 

4. Connection between proposed 

programs and projects and unmet needs, 

mitigation needs, and fair housing and 

civil rights assessments (review section 

I.C.1.d.). 

5. Set allocation and award caps 

(review section I.C.1.e.). 

6. Establish funding criteria (review 

section I.C.1.f.). 

7. Establish protocols for substantial 

amendments (review section I.C.1.g.). 

As grantees develop their Action Plan, 

they must consult with various 

stakeholders, including the public (i.e., 

citizen participation) and inform 

residents about their funding decisions 

prior to submitting the Action Plan to 

HUD for review. Grantees will receive 

specific instructions for Action Plan 

submittal in the applicable AAN. Note, 

the citizen participation requirements to 

develop the action plan are described in 

section I.C.2. 

I.C.1.a. Unmet needs assessment. 

Each grantee must develop an unmet 

needs assessment to strategically inform 

the use of the grant funds. The unmet 

needs assessment will help a grantee 

evaluate community needs across its 

jurisdiction by assessing the remaining 

effects of the qualifying disaster as they 

relate to housing, infrastructure, and the 

economy. Note, HUD can assist grantees 

in obtaining FEMA data to support the 

development of the Action Plan and 

implementation of recovery programs.6

I.C.1.a.(i). Unmet needs in the MID 

areas. A grantee must describe the 

unmet need in the MID areas (see 

section III.D.2.), as the allocations are 

based on the unmet needs of these 

specific communities, which are the 

least likely to fully recover without 

additional assistance. Grantees are 

required to use at least 80 percent of the 

CDBG–DR award to benefit the HUDidentified MID areas. Local government 

grantees whose HUD-identified MID 

areas include their entire jurisdiction, 

must use 100 percent of the CDBG–DR 

award to benefit the HUD-identified 

MID area. However, HUD encourages all 

grantees to consider using 100 percent 

of its award to benefit HUD-identified 

MID areas since the data from these 

areas were used to determine the 

amount of the award. If allowed, and the 

grantee does choose to spend a portion 

(i.e., up to 20 percent) of its award 

outside of the HUD-identified MID area, 

it will determine and identify in the 

Action Plan where the grantee will use 

that amount (‘‘grantee-identified MID 

areas’’), and that portion of the 

allocation may only be used to address 

those areas that the grantee determines 

are most impacted and distressed, 

meaning the areas that have the greatest 

amount of damage and unmet need 

outside of the HUD-identified MID 

areas. Additionally, any granteeidentified MID areas must have received 

a presidential major disaster declaration 

identified by the disaster numbers listed 

in the applicable AAN. The grantee 

must use quantifiable and verifiable 

data in its analysis, and reference it in 

its Action Plan, to identify the granteeidentified MID areas and indicate how 

the proposed use of funds will prioritize 

the remaining unmet needs for low- and 

moderate-income (LMI) individuals and 

areas. The addition of a granteeidentified MID area after the submittal 

of the initial Action Plan would result 

in a substantial amendment to the 

grantee’s Action Plan (see section 

I.C.1.g.). 

I.C.1.a.(ii). Unmet needs assessment 

requirements. At a minimum, the unmet 

needs assessment must include the 

following, as they relate to the HUDidentified and grantee-identified MID 

areas, and cite the appropriate data 

sources: 

1. Description of the effects of the 

qualifying disaster(s) and the greatest 

remaining recovery needs that have not 

been addressed by other sources of 

funds, including insurance proceeds, 

other Federal assistance, or any other 

funding source; and 

2. Evaluation of the three core aspects 

of recovery—housing, infrastructure, 

and the economy (e.g., estimated job 

losses), which considers the pre-disaster 

needs (e.g., a lack of affordable housing) 


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7 Visit HUD’s Office of Fair Housing and Equal 

Opportunity’s website for more information about 

fair housing and civil rights obligations here: 

https://www.hud.gov/fairhousing. 

8 Visit HUD’s Office of Fair Housing and Equal 

Opportunity’s website for more information about 

requirements for affirmatively furthering fair 

housing here: https://www.hud.gov/program_

offices/fair_housing_equal_opp/affh. 

that have been exacerbated by the 

disaster. The assessment of housing 

needs must address: (1) emergency 

shelters; (2) interim and permanent 

housing; (3) rental and owner-occupied 

single family and multifamily housing; 

(4) public housing (including HUDassisted housing) and other types of 

affordable housing, including housing 

for vulnerable populations (including 

those who were unhoused prior to the 

disaster). 

Disaster recovery needs evolve over 

time and grantees must amend the 

Action Plan, including the unmet needs 

assessment, as additional needs are 

identified, and/or additional resources 

become available. At a minimum, 

grantees must revisit and update the 

unmet needs assessment when 

reallocating funds from one program to 

another through a substantial 

amendment (as described in section 

I.C.1.g.). 

I.C.1.b. Mitigation needs assessment. 

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 

long-term recovery. 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. For purposes of grants subject 

to the Universal Notice, mitigation 

activities are defined as those activities 

that increase resilience 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. 

At a minimum, the mitigation needs 

assessment must include a risk-based 

assessment to identify current and 

future hazards (e.g., sea level rise, strong 

winds, tornados, storm surge, flooding, 

volcanic activity, earthquakes, extreme 

heat, drought, and wildfire risk, where 

appropriate). The assessment must 

describe how the hazards do or can 

impact the HUD-identified and granteeidentified MID areas and cite the 

appropriate data sources. Grantees must 

explain how the risk-based assessment 

will inform the use of the CDBG–DR 

funds and identify if other sources of 

funding are available to address its 

identified mitigation needs. 

At a minimum, grantees must use the 

risks identified in the current FEMAapproved State or local HMP, 

Community Wildfire Protection Plan 

(CWPP), or other resilience or long-term 

recovery plans to inform the assessment. 

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. 

A grantee may choose to simply cite 

the current FEMA-approved HMP, 

CWPP, or other resilience or long-term 

recovery plan to address the mitigation 

needs assessment, if there is a clear 

connection of programs and projects to 

the mitigation needs. If a grantee 

chooses this option, the grantee must 

make the HMP, CWPP, or other 

resilience or long-term recovery plan 

available on the grantee’s official 

disaster recovery website and provide a 

direct link to the selected plan in the 

mitigation needs assessment section of 

the Action Plan. 

Mitigation needs evolve over time and 

grantees must amend the mitigation 

needs assessment and Action Plan as 

conditions change, as additional 

mitigation needs are identified, and 

additional resources become available. 

At a minimum, grantees must revisit 

and update the mitigation needs 

assessment when reallocating funds 

from one program to another through a 

substantial amendment (as described in 

section I.C.1.g.). 

I.C.1.c. Fair Housing and Civil Rights 

Assessment 

I.C.1.c.(i). Fair housing and civil rights 

laws and terminology defined. The 

grantee must use its CDBG–DR funds in 

a manner that complies with its fair 

housing and nondiscrimination 

obligations,7 which include: 

• Title VI of the Civil Rights Act of 

1964, 42 U.S.C. 2000d et seq.; 

• Title VIII of the Civil Rights Act of 

1968 (The Fair Housing Act), 42 U.S.C. 

3601–19; 

• Section 504 and 508 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. 

For purposes of the Universal Notice, 

HUD defines the following terms as they 

relate to the requirements set forth in 

the Universal Notice: 

• Protected Classes: Race, color, 

national origin, religion, sex (including 

sexual orientation and gender identity), 

familial status, and disability. 

• Vulnerable Populations: Groups or 

communities whose circumstances 

present barriers to obtaining or 

understanding information or accessing 

resources which may include: (1) 

persons at risk of or experiencing 

homelessness; (2) older adults; (3) 

persons with disabilities (mental, 

physical, developmental); (4) survivors 

of domestic violence, dating violence, 

sexual assault, or stalking; (5) persons 

with alcohol or other substance-use 

disorder; (6) persons with HIV/AIDS 

and their families; or (7) public housing 

residents. 

• Underserved Communities: 

Populations or geographic communities, 

often comprised of protected classes, 

sharing a particular characteristic 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, a Community 

Disaster Resilience Zone (CDRZ), or 

those areas that meet at least one of the 

distress criteria established for the 

designation of an investment area of a 

Community Development Financial 

Institution at 12 CFR 

1805.201(b)(3)(ii)(D). 

Grantees must take the following 

actions to comply with affirmatively 

furthering fair housing (AFFH): 8

1. Submit a certification to AFFH in 

accordance with 24 CFR 91.225 or 325, 

as applicable and 24 CFR 5.150, et seq.; 

2. Update any policies and procedures 

to remain in compliance with AFFH 

requirements, as amended by HUD and 

reflected in updated HUD guidance and 

rules; and 

3. Use their CDBG–DR funds in a 

manner that affirmatively furthers fair 

housing. 

I.C.1.c.(ii). Fair housing and civil 

rights data collection. Collecting fair 

housing and civil rights data will 

position the grantee to provide a fair 

and holistic recovery. At a minimum, 

the grantee must collect the following 

data in terms of number and percentage 

for each identified group, as defined 

above, and as they relate to the HUDidentified and grantee-identified MID 

areas and cite the appropriate data 

sources: 

1. Populations with Limited English 

Proficiency (LEP) by language spoken; 

2. Persons belonging to protected 

classes; 


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3. Persons belonging to protected 

classes by housing tenure (i.e., 

homeowner vs renter); 

4. Persons belonging to vulnerable 

populations; 

5. Persons belonging to historically 

distressed and underserved 

communities; 

6. Indigenous populations and Tribal 

communities; and 

7. Racially or ethnically concentrated 

areas of poverty (R/ECAPs). 

Grantees are encouraged to consider 

housing tenure as it relates to these data 

sets when available. 

I.C.1.d. Connection of proposed 

programs and projects to unmet needs, 

mitigation needs, and fair housing and 

civil rights assessments. The grantee 

must describe the connection between 

identified unmet needs, mitigation 

needs, fair housing and civil rights data, 

and the allocation of CDBG–DR 

resources within its Action Plan. At a 

minimum, the Action Plan must: 

1. Provide a clear connection between 

a grantee’s assessments and its proposed 

programs and projects in the MID areas 

(or outside in connection to the MID 

areas as described in section III.D.2.). 

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 unmet needs 

and mitigation needs assessments or 

provide an acceptable justification for a 

disproportional allocation. 

2. Describe how the grantee is 

incorporating hazard mitigation 

measures to reduce the impacts of future 

disasters and considering all hazard 

risks, as identified in its mitigation 

needs assessment. 

3. Based on the fair housing and civil 

rights data collected, the grantee must: 

• Describe how protected classes will 

benefit from CDBG–DR funds in 

proportion to their communities’ needs. 

• Assess the impact of its planned use 

of CDBG–DR funds on identified 

vulnerable populations and other 

identified historically underserved 

communities. If programs are aimed at 

these groups, the Action Plan should 

clearly define those populations. 

4. Describe all reasonable efforts the 

grantee will take to minimize 

displacement of persons or entities, 

assist any persons or entities displaced, 

and ensure accessibility needs of 

displaced persons with disabilities. 

I.C.1.e. Allocation and award caps. It 

is critical for grantees to demonstrate 

their planned use of funds through their 

Action Plan so the public can 

understand what types of assistance 

disaster survivors can apply for and 

what limits there are on possible 

awards. 

Therefore, grantees must create a 

high-level budget for the full amount of 

the CDBG–DR allocation so the public 

can understand how funds will be split 

among program administration (subject 

to the five percent cap, plus five percent 

of program income generated, as 

described in section III.B.3.), planning 

(subject to the 15 percent cap, as 

described in section III.B.4.), housing, 

infrastructure, and economic 

revitalization (e.g., by program, 

subrecipient, grantee-administered 

activity, or other category). 

Grantees are also encouraged to 

budget for any planned public service 

activities. The grantee’s budget should 

also be consistent with the requirements 

to integrate hazard mitigation into all its 

programs and projects that involve 

construction, as described in section 

III.D.3. Finally, grantees must develop 

an executive summary describing the 

contents of the Action Plan and its 

proposed use of funds so that interested 

parties will be able to understand and 

comment on the Action Plan. 

For each program it intends to fund, 

the grantee must include the following 

in its Action Plan: 

1. Provide a description of the disaster 

recovery program to be funded; 

2. Identify the CDBG–DR eligible 

activity and national objective, 

including only those allowed under title 

I of the HCDA or otherwise eligible 

pursuant to a waiver or alternative 

requirement; 

3. Identify the responsible entity 

assuming the authority for the decision 

making and completion of the 

environmental review per 24 CFR 58.4. 

State grantees who exercise HUD’s 

environmental review responsibilities 

must follow the requirements per 24 

CFR 58.4(b)(2) and 24 CFR 58.18; 

4. Identify which geographic areas 

(i.e., HUD-identified and/or granteeidentified MID areas) that may benefit 

from CDGB–DR funds; 

5. Explain how the grantee will 

identify and then reduce barriers that 

individuals face or may face to access 

assistance, including protected classes, 

vulnerable populations, and other 

historically underserved communities; 

6. If the appropriations act that 

funded the grantee’s award includes 

additional funds for mitigation, the 

grantee must also identify how the 

proposed use of CDBG–DR mitigation 

set-aside funds will meet the definition 

of mitigation activities (as described in 

section I.C.1.b.); 

7. Describe (1) the maximum amount 

of assistance (i.e., award cap) available 

to a beneficiary under each of the 

grantee’s disaster recovery programs and 

(2) the maximum income (i.e., income 

cap) of any beneficiary receiving CDBG– 

DR assistance for direct-benefit 

activities. 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. If the maximum 

amount of assistance is unknown for a 

specific program or project when the 

grantee is submitting the initial Action 

Plan to HUD, the grantee must update 

the Action Plan through a substantial 

amendment (as described in section 

I.C.1.g.) once the information is known. 

The substantial amendment must be 

submitted and approved before 

awarding funds to applicants; and 

8. Any other known eligibility criteria 

established by the grantee for assistance 

(e.g., priority intake). 

I.C.1.e.(i). Prioritization for 

allocations less than $20 million. 

Section I.C.1.d. requires that the Action 

Plan demonstrates 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 unmet needs 

and mitigation needs assessments or 

provide an acceptable justification to 

HUD for a disproportional allocation. 

HUD recognizes that grantees 

receiving an allocation of less than $20 

million for a qualifying disaster(s) may 

most effectively advance recovery by 

more narrowly targeting these limited 

recovery and mitigation resources. HUD 

will consider the small size of the grant 

and HUD’s allocation methodology as 

an acceptable justification for a grantee 

to propose a disproportional allocation 

when the grantee is allocating funds to 

address: (1) unmet affordable rental 

housing needs in a MID area caused by 

or exacerbated by the disaster(s) that 

incorporates mitigation, or (2) unmet 

infrastructure needs necessary to build 

affordable rental housing in a MID area 

that incorporates mitigation. 

I.C.1.f. Funding criteria. The Action 

Plan must describe how the grantee will 

distribute its grant funds, which can 

include the following methodologies: 

1. Direct implementation (through 

employees, contractors, or through 

subrecipients); or 

2. A method of distribution to local 

governments and Indian Tribes (for 

States, as permitted by III.C.4.); or 

3. A combination of a direct 

implementation model and a method of 

distribution model. 

Because grantees must spend at least 

80 percent of the CDBG–DR award to 


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9Find your local Continuum of Care here: https:// 

www.hudexchange.info/grantees/. 

10Find your local Public Housing Agency on 

HUD’s website here: https://www.hud.gov/ 

program_offices/public_indian_housing/pha/ 

contacts. 

11Find a HUD-approved housing counseling 

agency on HUD’s website here: https://

answers.hud.gov/housingcounseling/s/ 

?language=en_US. 

benefit the HUD-identified MID area 

(see section III.D.2.), they should 

consider how they will meet this 

requirement when developing funding 

criteria. At a minimum, the grantee 

must establish the following criteria 

within its Action Plan so the public can 

clearly understand its funding criteria 

for funds sub-granted to eligible entities 

through a method of distribution or for 

applications that the grantee solicits for 

programs to be carried out directly: 

1. All criteria used to allocate and 

award the funds, including the relative 

importance of each criterion and any 

priorities; 

2. Establish the maximum grant size 

available; 

3. Describe how the distribution and 

selection criteria will address disasterrelated unmet needs or mitigation needs 

in a manner that does not have an 

unjustified discriminatory effect on nor 

a failure to benefit protected classes in 

proportion to their communities’ needs, 

including in racially and ethnically 

concentrated areas of poverty; and 

4. Describe the steps to be followed to 

encourage the participation of those 

belonging to protected classes. Such 

description must include an assessment 

of the following: (1) who may be 

expected to benefit, (2) the timing of 

who will be prioritized, and (3) the 

amount or proportion of benefits 

expected to be received. 

If some required information is 

unknown when the grantee is 

submitting its initial Action Plan to 

HUD, the grantee must update the 

Action Plan through a substantial 

amendment once the information is 

known. Historically, appropriations acts 

require a grantee to submit a plan 

detailing the proposed use of all funds 

before HUD can obligate funding to the 

grantee. Without all the required 

information in the initial Action Plan, 

HUD may obligate only a portion of the 

grant funds until the substantial 

amendment providing the required 

information is submitted and approved 

by HUD. 

I.C.1.g. Protocols for substantial 

amendments. In its Action Plan, each 

grantee must specify criteria for 

determining what changes in the 

grantee’s Action Plan would constitute 

a substantial amendment to the Action 

Plan and thus require public comment. 

At a minimum, the following 

modifications will constitute a 

substantial amendment: 

1. A change in program benefit or 

eligibility criteria (including the 

expansion of eligible beneficiaries (e.g., 

establishing a new grantee-identified 

MID area)); 

2. The addition or deletion of an 

activity; 

3. A proposed reduction in the overall 

benefit requirement (as described in 

section III.B.1.); 

4. The allocation or reallocation of a 

reasonable monetary threshold specified 

by the grantee in its Action Plan; and 

5. An update to the submitted initial 

Action Plan if the original submission 

was incomplete as allowed under 

section I.C.1.e. paragraph 7 and section 

I.C.1.f. 

Once a grantee has set a reasonable 

monetary threshold in which a 

reallocation or allocation of funds 

would constitute a substantial 

amendment, grantees cannot disregard 

this threshold by submitting multiple 

nonsubstantial amendments back-toback in order to avoid following a 

substantial amendment process (e.g., 

submitting two budget reallocations 

within 30 days of each other that if 

taken together would require a 

substantial amendment). 

I.C.2. Citizen participation 

requirements. 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. Under the 

streamlined requirements, the grantee 

may be required to hold a public 

hearing(s) on the proposed Action Plan 

and must provide a reasonable 

opportunity (i.e., at least 30 calendar 

days) for public 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 its citizen participation 

requirements at 24 CFR 570.486 (except 

as provided for in notices providing 

waivers and alternative requirements). 

The grantee’s records must demonstrate 

that it has notified affected residents 

through electronic mailings, press 

releases, statements by public officials, 

media advertisements, social media, 

public service announcements, and/or 

contacts with neighborhood 

organizations. 

In addition to the requirements above, 

the streamlined citizen participation 

alternative requirements for CDBG–DR 

grants are as follows: 

• Requirement for consultation 

during plan preparation (see section 

I.C.2.a.); 

• Publication of the Action Plan and 

opportunity for public comment (see 

section I.C.2.b.); 

• Consideration of public comments 

(see section I.C.2.c.). 

I.C.2.a. Consultation during Action 

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 during Action Plan 

preparation to ensure consistency of the 

Action Plan with applicable regional 

development plans. This requirement 

also includes consulting with 

organizations that advocate on behalf of 

members of protected classes, 

vulnerable populations, and other 

underserved communities impacted by 

the disaster to help address 

requirements defined in section I.C.1.c. 

for the fair housing and civil rights data 

collection. A grantee must consult with 

other relevant government and local 

agencies, including State and local 

emergency management agencies that 

have primary responsibility for the 

administration of FEMA funds, agencies 

that manage local Continuum of Care,9

Public Housing Agencies,10 and HUDapproved housing counseling 

agencies,11 as applicable. Grantees must 

coordinate with State Housing Finance 

Agencies to verify that all available 

funding sources and opportunities for 

leverage are noted in the Action Plan. 

Given the extensive coordination that is 

required to develop a grantee’s Action 

Plan, HUD recommends that grantees 

give their partners a clear timeline on 

receiving feedback and create a 

consistent process for how feedback will 

be received from these stakeholders. 

I.C.2.b. Public comment period and 

minimum public hearing requirement. 

Following the creation of the Action 

Plan or substantial amendment, the 

grantee must publish the proposed 

Action Plan or substantial amendment 

for public comment. The manner of 

publication must include prominent 

posting on the grantee’s official disaster 

recovery website and must afford 

residents, affected local governments, 


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and other interested parties a reasonable 

opportunity to review the Action Plan 

or substantial amendment (i.e., at least 

30 calendar days). Grantees shall 

identify and redress any potential 

barriers that may limit or prohibit 

protected classes, vulnerable 

populations, or other underserved 

communities and individuals affected 

by the disaster from providing public 

comment on the grantee’s Action Plan 

or substantial amendments. For 

example, grantees should consider how 

to address barriers like lack of childcare 

and/or transportation that can limit 

certain populations or communities 

from participating in public hearings, 

providing comments, or other 

engagement events or techniques. 

HUD anticipates that every 

community and every grantee will have 

some identified barriers to address. 

Based on the specific barriers the 

grantee identifies, particularly those that 

may limit or prohibit equitable 

participation, the grantee must describe 

the reasonable measures it will take to 

increase coordination, such as 

affirmative marketing, targeted outreach, 

and engagement with underserved 

communities and individuals, including 

protected classes such as persons with 

disabilities and persons with LEP. 

HUD strongly encourages grantees to 

hold as many hearings or convenings as 

may be necessary to ensure they capture 

all citizen comments to inform the 

comprehensive development of their 

Action Plan. 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 $20 million are not required to 

hold a public hearing; (2) CDBG–DR 

grantees with allocations equal to or 

greater than $20 million but less than 

$100 million are required to hold at 

least one public hearing; (3) CDBG–DR 

grantees with allocations equal to or 

greater than $100 million but less than 

$500 million are required to hold at 

least two public hearings; and (4) 

CDBG–DR grantees with allocations 

equal to or greater than $500 million 

shall convene at least three public 

hearings. These are only minimum 

hearing requirements and the form and 

structure of the hearings and convenings 

may vary to effectively solicit 

meaningful engagement and feedback. 

Grantees may find they need additional 

hearings to adequately capture and 

address all citizen questions, concerns, 

and comments. 

If the grantee is required to hold 

multiple public hearings, and a grantee 

holds those hearings in-person, it must 

hold each hearing in a different location 

within the HUD-identified MID area. 

Specifically, the grantee should select 

locations that will promote a geographic 

balance and maximize accessibility for 

stakeholders to actively participate. 

FIGURE ONE: MINIMUM PUBLIC HEARING REQUIREMENT BASED ON

GRANT SIZE

CDBG–DR grant 

value 

Minimum public 

hearing requirement 

<$20 Million ............... No public hearing requirement. 

≥$20 Million but < 

$100 Million.

One (1) public hearing required. 

≥$100 Million but < 

$500 Million.

Two (2) public hearings required. 

≥$500 Million ............. Three (3) public hearings required. 

Grantees may convene public 

hearings virtually (alone, or in concert 

with an in-person hearing). All inperson hearings must be held within 

HUD-identified MID areas and in 

facilities that are physically accessible 

to persons with disabilities. When 

conducting a virtual hearing, the grantee 

must allow questions in real time, with 

answers coming directly from the 

grantee representatives to all attendees. 

A grantee’s citizen participation plan 

must specify that it will meet the 

requirements in the previous paragraph 

and the requirements in section III.B.8.a. 

of this notice on vital documents. 

Additionally, for both virtual and inperson hearings, the citizen 

participation plan must include how the 

grantee will complete the following: (1) 

hold hearings at times and locations 

convenient to potential and actual 

beneficiaries, (2) provide 

accommodations for persons with 

disabilities, and (3) to ensure effective 

communication for individuals with 

disabilities, including through the 

provision of auxiliary aids and services. 

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. Meaningful access may 

include live translation of attendees’ 

questions and comments. In the 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 nonEnglish-speaking residents live in the 

MID areas. In addition, for both virtual 

or in-person hearings, the grantee shall 

provide reasonable notification and 

access for residents in accordance with 

the grantee’s certifications at section 

I.C.4., timely responses to all citizen 

questions and issues, and public access 

to all questions and responses. 

I.C.2.c. Consideration of public 

comments. The grantee must provide a 

reasonable time frame (no less than 30 

calendar days) and reasonable 

method(s) (including but not limited to 

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 Action 

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. 

I.C.3. Submission of the Action Plan. 

The Action Plan (including the SF–424, 

SF–424B and SF–424D, as applicable) 

and the certifications included in 

Appendix B of the Universal Notice 

must be submitted to HUD for review 

and approval. Note, the submission 

process will be described in the 

applicable AAN. HUD will review each 

Action Plan within 45 calendar days 

from the date of receipt, as described in 

section I.C.5. By submitting the required 

standard forms, the grantee is providing 

assurances that it and its recipients will 

comply with statutory requirements, 

including, but not limited to Federal 

civil rights requirements. 

I.C.4. Action Plan 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)), 

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 

requirement. Each grantee receiving an 

allocation under an AAN must make all 

the certifications included in Appendix 

B of the Universal Notice. 

I.C.5. HUD Action Plan review 

process. HUD may return an Action 

Plan or substantial amendment to an 

Action Plan if it is incomplete. HUD 

will work with grantees to resolve or 

provide additional information during 

the review period to avoid having to 

unnecessarily formally disapprove an 


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Action Plan or substantial amendments. 

There may be several issues related to 

the Action Plan or substantial 

amendments, as submitted, that can be 

fully resolved through discussion and 

revision during the review period, 

rather than through HUD’s formal 

disapproval of the Action Plan or 

substantial amendment. Therefore, the 

Secretary has determined that good 

cause exists and is waiving 24 CFR 

91.500 and providing the alternative 

requirement described below. 

I.C.5.a. General HUD review of an 

Action Plan. HUD will review the 

Action Plan upon receipt. The Action 

Plan will be deemed approved 45 

calendar days after HUD receives the 

plan, unless before that date HUD 

notifies the jurisdiction that the plan is 

being returned or disapproved (see 

definitions below). The grantee must 

publish the final HUD-approved Action 

Plan on its official disaster recovery 

website. 

I.C.5.b. Standard of review of an 

Action Plan. HUD may disapprove or 

return an Action Plan or a portion of an 

Action Plan if it is inconsistent with the 

purposes of the Cranston-Gonzalez 

National Affordable Housing Act (42 

U.S.C. 12703), if it is substantially 

incomplete, or if the certifications under 

section I.C.4. of the Universal Notice are 

not satisfactory to the Secretary in 

accordance with 24 CFR 570.304 or 

570.485(c), as applicable. The following 

are examples of an Action Plan that is 

substantially incomplete: 

• An Action Plan that fails to satisfy 

a required element in the Universal 

Notice or applicable AAN (for example, 

an Action Plan that was developed 

without the required citizen 

participation or the required 

consultation); or 

• An Action Plan that fails to describe 

how protected classes would benefit 

from CDBG–DR funds in proportion to 

their communities’ needs. 

I.C.5.c. Written notice of return of an 

Action Plan. HUD is establishing an 

alternative process that offers a grantee 

the option to voluntarily provide a 

revised Action Plan if HUD has 

identified sections of the Action Plan 

that are substantially incomplete. If 

HUD finds errors with the Action Plan 

submission, no later than day twenty in 

HUD’s 45-day review, HUD may return 

the Action Plan to the grantee to resolve 

the identified errors. The review 

timeline will pause while the grantee is 

updating the Action Plan for 

resubmission to HUD. Once the grantee 

has resubmitted the Action Plan, the 

review timeline will resume. A grantee 

is not required to revise the Action Plan 

submission, but if they choose not to 

after being notified of errors, the 

Secretary may disapprove the Action 

Plan as substantially incomplete if HUD 

determines the Action Plan does not 

meet the requirements of the Universal 

Notice and the applicable AAN. 

I.C.5.d. Written notice of disapproval 

of an Action Plan. Within 15 calendar 

days after HUD notifies a grantee that it 

is disapproving its Action Plan (initial 

notice should occur via email), it must 

inform the jurisdiction in writing of the 

reasons for disapproval and actions that 

the jurisdiction could take to meet the 

criteria for approval. 

I.C.5.e. Revisions and resubmission of 

an Action Plan. After the first 

notification of disapproval, the grantee 

must revise or resubmit an Action Plan 

within 45 calendar days. HUD must 

respond to approve or disapprove the 

Action Plan within 30 calendar days of 

receiving the revisions or resubmission. 

I.C.6. Amendments to the Action 

Plan. The grantee must amend its 

Action Plan to update its needs 

assessments, modify or create new 

activities, or reprogram funds, as 

necessary. 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 cross 

reference changes among multiple 

amendments. 

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

Action Plan, each grantee must specify 

criteria outlined in section I.C.1.g. to 

clearly define what changes constitute a 

substantial amendment to the 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 I.C.2.b. and the 

consultation requirements described in 

section I.C.2.a., which are not required 

for substantial amendments. Every 

amendment to the Action Plan 

(substantial and nonsubstantial) must be 

numbered sequentially and posted on 

the grantee’s website. A substantial 

amendment shall require a 30-day 

public comment period and must be 

posted on the grantee’s website. 

I.C.6.a.(i). General HUD review of a 

substantial amendment to an Action 

Plan. HUD will review a substantial 

amendment to an Action Plan upon 

receipt. The substantial amendment will 

be deemed approved 45 calendar days 

after HUD receives the amendment, 

unless before that date HUD has notified 

the jurisdiction that the amendment is 

disapproved. 

I.C.6.a.(ii). Standard of review of a 

substantial amendment to an Action 

Plan. HUD may disapprove a substantial 

amendment to an Action Plan if it is 

substantially incomplete. HUD must 

notify the grantee in writing that it is 

disapproving the substantial 

amendment and must include the 

reasons for disapproval and actions that 

the jurisdiction could take to meet the 

criteria for approval. 

I.C.6.a.(iii). Revisions and 

resubmission of a substantial 

amendment to an Action Plan. After the 

first notification of disapproval, the 

grantee must revise or resubmit the 

substantial amendment to the Action 

Plan within 45 calendar days. HUD 

must respond to approve or disapprove 

the substantial amendment within 30 

calendar days of receiving the revisions 

or resubmission. 

I.C.6.b. Nonsubstantial amendment. 

The grantee must notify HUD, but is not 

required to seek public comment, when 

it makes any amendment to the Action 

Plan that is not substantial. HUD must 

be notified at least five business days 

before the amendment becomes 

effective. However, as mentioned above, 

every amendment to the Action Plan 

(substantial and nonsubstantial) must be 

numbered sequentially and posted on 

the grantee’s website. The Department 

will acknowledge receipt of the 

notification of nonsubstantial 

amendments via email within five 

business days. 

II. Phase Two: Financial Certification 

and Oversight of Funds 

II.A. Certification of Adequate Financial 

Controls and Procurement Processes, 

and Procedures for Proper Grant 

Management 

Appropriations acts typically require 

that the Secretary certify that the grantee 

has proficient financial controls and 

procurement processes and procedures 

in place to prevent any duplication of 

benefits (DOB) as defined by section 312 

of the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act of 1974, 

as amended (‘‘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. 

II.A.1. 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 135 calendar days of 


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the applicability date of the AAN. 

Historically, grant agreements have not 

been executed until the Secretary has 

issued a certification for the grantee. For 

each of the items outlined in sections 

II.A.1.a. through II.A.1.g. 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.

HUD will review the grantee’s

certification documentation within 45

calendar days from the date of receipt.

II.A.1.a. Proficient financial

management controls. A grantee has 

proficient financial management 

controls if the grantee’s agency 

administering this grant submits its 

most recent single audit and Annual 

Comprehensive Financial Report 

(ACFR), 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 Community 

Development Block Grant Mitigation 

(CDBG–MIT) funds. If the single audit or 

ACFR identified weaknesses or 

deficiencies, the grantee must provide 

documentation satisfactory to HUD 

showing how those weaknesses have 

been removed or are being addressed. 

II.A.1.b. Procedures for procurement.

Each grantee must provide HUD with 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 has adequate 

procurement processes if the grantee 

complies with the procurement 

requirements at section III.B.7., 

including: 

(i) A State grantee has proficient

procurement processes if HUD 

determines that its procurement 

processes reflect that it: 

(1) adopted 2 CFR 200.318 through

200.327 for both its own procurement 

processes and for its subrecipients; 

(2) follows its own State procurement

policies and procedures based on full 

and open competition 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 to 

evaluate the cost or price of the product 

or service and comply with 2 CFR 

570.489(l); or 

(3) adopted 2 CFR 200.317, meaning

that it will follow its own State 

procurement processes based on full 

and open competition, evaluate the cost 

or price of the product or service, and 

comply with 2 CFR 570.489(l), but 

impose 2 CFR 200.318 through 200.327 

on its subrecipients. 

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 either i.) the procurement 

processes that the administering agency 

is subject to, or ii.) the same processes 

to which other local governments and 

subrecipients are subject, or iii.) the 

procurement processes that the agency 

carrying out the activity normally 

follows. 

(ii) 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, and 200.214. When the 

grantee provides a copy of its 

procurement processes, it must indicate 

the sections that incorporate these 

provisions. 

II.A.1.c. Policies and procedures to

maintain a comprehensive disaster 

recovery website. A grantee has 

adequate policies and procedures to 

maintain a comprehensive and 

accessible disaster recovery website if it 

submits policies and procedures 

indicating to HUD that the grantee will 

have a separate web page dedicated to 

its CDBG–DR funded activities 

including the information described at 

section III.B.8. The procedures must 

also indicate the frequency of website 

updates. At a minimum, grantees must 

update their official disaster recovery 

website quarterly. 

II.A.1.d. 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: 

(i) how the grantee will verify the

accuracy of information provided by 

applicants; 

(ii) the criteria to be used to evaluate

the capacity of potential subrecipients; 

(iii) 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; 

(iv) if the grant size is $100 million or

more, the grantee has or will employ an 

internal auditor that provides both 

programmatic and financial oversight of 

grantee activities and has adopted 

policies that describe the auditor’s role 

in detecting and preventing fraud, 

waste, and abuse; 

(v) (1) 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), (h), and (l) and subparagraph 

II.A.1.b.(i) Procedures for procurement

of the Universal Notice, which policy

includes the process for promptly

identifying and addressing such

conflicts;

(2) for local government grantees, 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 policy 

includes the process for promptly 

identifying and addressing such 

conflicts; and 

(vi) how it will assist in investigating

and taking action when fraud occurs 

within the grantee’s CDBG–DR activities 

and/or programs. Following a disaster, 

property owners and renters are 

frequently the targets of people 

fraudulently posing as government 

employees, creditors, mortgage 

servicers, insurance adjusters, and 

contractors. All grantees receiving 

CDBG–DR funds for the first time shall 

attend and require subrecipients to 

attend fraud related training provided 

by HUD Office of Inspector General 

(OIG), when offered, to assist in the 

proper management of CDBG–DR grant 

funds. Grantees must report to the 

appropriate HUD CPD staff member that 

it met this requirement and who 

attended the training. In accordance 

with 2 CFR 200.113, grantees and 

subrecipients of CDBG–DR must 

promptly inform in writing the OIG and 

HUD when it has credible evidence of 

violations of Federal criminal law 

involving fraud, bribery, or gratuities or 

a violation of the civil False Claims Act 

that could potentially affect the Federal 

award at https://www.hudoig.gov/ 

hotline/report-fraud (a subrecipient of 

CDBG–DR must also inform the CDBG– 

DR grantee that awarded it funding). All 

other 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). 

Grantees must address in their 

policies and procedures: 

(1) how it will provide CDBG–DR

beneficiaries with information that 


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12 View more information about how to access 

this data, visit HUD’s website here: https://

www.hud.gov/program_offices/comm_planning/ 

cdbg-dr/data-sharing. 

raises awareness of possible fraudulent 

activity, how fraud can be avoided, and 

what local or State agencies to contact 

to take action and protect the grantee 

and beneficiary investment: 

(2) 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; 

and 

(3) 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 

CDBG–DR assistance because the 

fraudulent activity results in the 

creation of additional unmet need, the 

procedures must also address what 

steps the grantee will follow to provide 

additional assistance. 

II.A.1.e. Policies and procedures to 

prevent DOB. A grantee has adequate 

policies and procedures to prevent the 

DOB if the grantee submits and 

identifies a uniform process that reflects 

the requirements in Appendix C of the 

Universal Notice, including: 

(i) 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; 

(ii) determining a grantee’s or an 

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

assistance before committing funds or 

awarding assistance; 

(iii) requiring beneficiaries to enter 

into a signed agreement to repay any 

duplicative assistance if they later 

receive 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.’’; and 

(iv) verifying that CDBG–DR funds 

will not be used for activities 

reimbursable by, or for which funds are 

made available by, FEMA or the U.S. 

Army Corps of Engineers (USACE). 

Although the language may vary among 

appropriations acts, CDBG–DR funds 

may not be used for activities 

reimbursable by, or for which funds are 

made available by FEMA or the USACE. 

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 a DOB. 

Additionally, HUD can assist CDBG– 

DR grantees with access to the necessary 

data to support a DOB review.12

II.A.1.f. Policies and procedures for 

timely expenditures of grant funds. A 

grantee has adequate policies and 

procedures to determine timely 

expenditures if it submits policies and 

procedures that indicate the following 

to HUD: 

(i) how it will track and document 

expenditures of the grantee and its 

subrecipients (both actual and projected 

reported in performance reports); 

(ii) how it will ensure proper 

reporting, tracking, and expenditure of 

program income, including how it will 

ensure that program income is 

substantially disbursed before making 

additional withdrawals from the United 

States Treasury, except when carrying 

out the same activities through a 

revolving fund (see section III.B.12. and 

section III.B.13. for additional 

requirements); 

(iii) how it will reprogram funds in a 

timely manner for activities that are 

stalled (e.g., a project is more than six 

months behind schedule); and 

(iv) how it will project expenditures 

of all CDBG–DR funds within the period 

provided for in section III.F.1. 

II.A.1.g. Capacity assessment and 

staffing analysis. To enable HUD to 

assess risk as described in 2 CFR 

200.206, the grantee must submit a 

capacity assessment and staffing 

analysis to HUD. The capacity 

assessment must describe the grantee’s 

capacity to carry out the recovery 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 a capacity assessment and 

staffing analysis that meets the 

following requirements. 

II.A.1.g.(i). Capacity assessment. 

(1) Identify the lead agency 

responsible for implementation of the 

CDBG–DR award and indicate that the 

head of that agency will report directly 

to the chief executive officer of the 

jurisdiction. 

(2) Conduct an assessment of its 

capacity to carry out CDBG–DR recovery 

efforts. 

(3) Develop a timeline with 

milestones describing when and how 

the grantee will address all capacity 

gaps that are identified. 

(4) Include a list of any open 

monitoring and HUD OIG audit findings 

related to any CPD program and an 

update on the corrective actions 

undertaken to address each finding. 

II.A.1.g.(ii). Staffing analysis. 

(1) Submit an organizational chart of 

the department or division and 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 II.A.1.a. through f. along with 

staff contact information, if available. 

(2) Submit documentation 

demonstrating that it has assessed staff 

capacity and identified positions for the 

purpose of: case management in 

proportion to the applicant pool; 

program managers who will be assigned 

responsibility for each primary recovery 

area (e.g., housing, infrastructure, and 

economic revitalization); 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 75) (Section 3), URA 

and its implementing regulations, 

section 104(d) of the HCDA and its 

implementing regulations, and CDBG 

acquisition and relocation requirements, 

fair housing compliance, and 

environmental compliance. 

Additionally, demonstrate that the 

internal auditor, if applicable, and 

responsible audit staff report 

independently to the chief elected or 

executive officer or board of the 

governing body of any designated 

administering entity. 

(3) Describe how it will provide 

training and technical assistance for any 

personnel that are not employed by the 

grantee at the time of Action Plan 

submission, and how it will fill gaps in 

knowledge or technical expertise 

required for successful and timely 

recovery. Grantees must also include 

how it will provide training and 

technical assistance to its subrecipients. 

To fully complete the certification 

process, the grantee must have 

completed and submitted the 

certification documentation required in 

the applicable Certification Checklist. 

The grantee’s documentation must 

demonstrate that the standards meet the 


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13 View the Community Planning and 

Development’s Monitoring Handbook for more 

information on HUD monitoring here: https://

www.hud.gov/program_offices/administration/ 

hudclips/handbooks/cpd/6509.2. 

requirements in the Universal Notice 

and the Certification Checklist. 

II.B. Relying on Prior Financial 

Certification Submissions 

This section applies to a grantee that 

has received CDBG–DR funds that are 

subject to the requirements of the 

Universal Notice or that received 

CDBG–DR funds under Public Laws 

117–43, 117–180, and 117–328. 

For five years after the execution of a 

grant agreement for an initial allocation 

of funds a grantee received subject to 

the Universal Notice, HUD will rely on 

the grantee’s prior submissions 

provided in response to the Financial 

Management and Grant Compliance 

Certification Requirements for any 

subsequent allocation of funds that is 

also subject to the Universal Notice. 

HUD will continue to monitor the 

grantee’s submissions and updates to 

policies and procedures during the 

normal course of business.13

For grantees that have received 

CDBG–DR funds under Public Laws 

117–43, 117–180, and 117–328, HUD 

may rely on a grantee’s prior 

submissions provided in response to the 

Financial Management and Grant 

Compliance Certification Requirements 

for five years after the execution of a 

grant agreement for an initial allocation 

of funds under those Public Laws. 

If it has been more than five years 

since the executed grant agreement for 

the original CDBG–DR grant under the 

Universal Notice or under Public Laws 

117–43, 117–180, and 117–328, grantees 

must update and resubmit the 

documentation required by section 

II.A.1. with the completed Certification 

Checklist. However, the Secretary may 

require any CDBG–DR grantee to update 

and resubmit the documentation 

required by section II.A.1., if there is 

good cause to require it. 

II.C. Obligation and Expenditure of 

Funds 

Once HUD approves the Action Plan 

and makes the required certification of 

financial controls and procurement 

processes, and adequate procedures for 

proper grant management HUD will 

then sign a grant agreement obligating 

funds to the grantee. In addition, HUD 

will establish the line of credit, and the 

grantee will receive DRGR system access 

(if it does not already have DRGR 

system access). The grantee will follow 

the DRGR Action Plan process to draw 

funds (see section III.G.). 

The grantee must meet the applicable 

environmental requirements before the 

use or commitment of funds for each 

activity. After the responsible entity (1) 

completes an environmental review(s) 

pursuant to 24 CFR part 58 and receives 

from HUD or the State, as outlined in 24 

CFR 58.18, an approved RROF and 

certification (as applicable), or (2) 

adopts another Federal agency’s 

environmental review and receives from 

HUD or the State, an approved RROF 

and certification (as applicable), the 

grantee may draw down funds from the 

line of credit for an activity. The 

disbursement of CDBG–DR funds must 

begin no later than 180 calendar days 

after HUD (1) executes a grant 

agreement with the grantee, or (2) 

approves the Action Plan and financial 

certification and oversight of funds, 

whichever is later. 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. 

III. Phase Three: Implementation of 

Universal Notice Requirements 

III.A. Policies and Procedures— 

Universal Notice Requirements 

III.A.1. Development of programspecific policies and procedures. 

Grantees must develop program-specific 

policies and procedures governing the 

use of funds. The Universal Notice 

requires each grantee to prioritize 

policies and procedures for its programs 

that address its unmet housing recovery 

needs. Grantees must create and finalize 

policies and procedures for their 

housing programs no later than one year 

from the applicability date of the AAN. 

Not later than eighteen months from the 

applicability date of the AAN, grantees 

must create and finalize policies and 

procedures governing the rest of its 

CDBG–DR funded programs (e.g., 

economic revitalization, infrastructure, 

public service activities, and any other 

eligible activities the grantee will fund) 

that shall be subject to HUD review. If 

a grantee has determined that it does not 

have unmet housing needs in the MID 

areas, the grantee must create policies 

and procedures for its other programs 

and activities no later than one year 

from the applicability date of the AAN. 

III.A.2. Required policies and 

procedures for all CDBG–DR funded 

programs. This section outlines the 

specific requirements that grantees must 

adhere to when developing their 

policies and procedures. Grantees must 

ensure their procedures comply with 

several key requirements, such as fair 

housing and civil rights compliance and 

minimizing displacement. Additionally, 

there are program-specific requirements 

that grantees must meet depending on 

the type of program (e.g., housing 

programs). Beyond the requirements 

described below, each grantee’s 

program-specific policies and 

procedures must adhere to the 

overarching policies and procedures 

they certified to (refer to Phase Two: 

Financial Certification and Oversight of 

Funds of the Universal Notice) 

including the requirement to build 

procedures to detect and prevent fraud, 

waste, and abuse; and any requirements 

set forth in this notice or the regulations 

on other cross-cutting requirements 

(e.g., environmental reviews, Davis 

Bacon Act, Section 3, Lead Safe 

Housing, etc.). Additionally, the 

grantee’s program-specific policies and 

procedures must align with the 

information in the Action Plan 

(including the grantee’s proposed 

allocations), as amended and approved 

by HUD. 

III.A.2.a. Fair housing and civil rights 

policies and procedures. Each programspecific policy and procedure must 

address the following requirements on 

fair housing and civil rights: 

(i) a description of how the grantee’s 

use of their CDBG–DR funds is 

consistent with their obligation to 

AFFH. For example, grantees may 

undertake a variety of actions consistent 

with the requirements to AFFH such as: 

(1) overcoming prior disinvestment in 

housing, infrastructure, and public 

services for protected class groups in the 

MID areas, especially where such 

groups are highly concentrated; (2) 

enhancing (a) the accessibility of 

disaster preparedness, resilience, or 

recovery services, including the 

accessibility of evacuation services and 

shelters for individuals with disabilities 

in the MID areas; (b) the provision of 

critical disaster-related information in 

accessible formats; and/or (c) the 

availability of integrated, accessible 

housing and supportive services; or (3) 

using CDBG–DR funds to mitigate 

environmental concerns and increase 

resilience among protected class groups 

to protect against the effects of extreme 

weather events and other natural 

hazards in the MID areas. Note, grantees 

must update these policies and 

procedures to remain in compliance 

with AFFH requirements as HUD may 

update its guidance and rules; 

(ii) a description of how their 

proposed allocations to projects and 

activities, selection criteria, and other 

actions can be expected to reduce 


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barriers for individuals, vulnerable 

populations, protected classes, and 

other underserved communities (as 

applicable); 

(iii) a description of how each 

program will enhance for individuals 

with disabilities in the MID areas (1) the 

accessibility of disaster preparedness, 

resilience, or recovery services, 

including the accessibility of evacuation 

services and shelters; (2) the provision 

of critical disaster-related information in 

accessible formats; and/or (3) the 

availability of integrated, accessible 

housing and supportive services; 

(iv) identification of 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 other 

underserved communities; and a 

description of how each program will 

mitigate these specific environmental 

concerns and increase resilience among 

these populations in the MID area to 

protect against current and future 

hazard risks. 

III.A.2.b. Minimizing displacement 

and relocation policies and procedures. 

Each program-specific policy and 

procedure must address the following 

requirements on minimizing 

displacement and relocation assistance, 

as appropriate: 

(i) 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. Grantees must 

seek to minimize displacement or the 

adverse impacts from displacement, 

consistent with the requirements of 

section III.B.15.a. of the Universal 

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; 

(ii) grantees must amend an existing 

Residential Anti-displacement and 

Relocation Assistance Plan (RARAP) or 

create a new RARAP specific to CDBG– 

DR. Grantees must meet the 

requirements in section III.B.15.a., 

related to the RARAP prior to 

implementing any activity with CDBG– 

DR grant funds, such as buyouts and 

other disaster recovery activities; and 

(iii) grantees must also describe how 

they will provide relocation assistance 

to persons or entities displaced under 

the URA and its implementing 

regulations at 49 CFR part 24, and under 

an optional relocation policy under 24 

CFR 570.606(d), when applicable. 

Grantees must also plan and budget for 

such relocation activities. The 

description will outline methods for 

identifying the needs of the potentially 

displaced persons including site visits, 

interviews, and orientations. It will also 

cover budget development variables like 

housing market conditions, acquisition 

costs, relocation payments, and 

professional services costs. Planning 

and budgeting must precede any action 

that will cause displacement and/or 

temporary relocation (including 

programmatic optional relocation) and 

should be scoped to the complexity and 

nature of the anticipated displacing 

activity including an evaluation of 

program resources available to carry out 

timely and orderly relocations. 

Finally, not all eligible activities will 

trigger displacement (e.g., planning). In 

such cases, the grantee should include 

in its policies and procedures an 

explanation that minimizing 

displacement is not applicable because 

displacement will not occur. 

III.A.2.c. Mitigation policies and 

procedures. Each program-specific 

policy and procedure must address the 

following requirements on mitigation 

and resilience: 

(i) how mitigation measures and 

strategies to reduce natural hazard risks 

will be integrated into the construction, 

reconstruction, or rehabilitation of 

residential or non-residential buildings; 

(ii) how CDBG–DR investments will 

be designed and constructed to 

withstand chronic stresses and extreme 

events related to a changing climate by 

identifying and implementing resilience 

performance measures in DRGR. 

III.A.2.d. Timeliness policies and 

procedures. As part of the development 

of a grantee’s program-specific policies 

and procedures, each grantee must also 

develop projected expenditures and 

outcomes. 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 must include in its policies and 

procedures how it will monitor its 

expenditures and outcomes against the 

projections. The grantee must upload 

these projections into DRGR and then 

post this information on its public 

website as required by section III.B.8. 

III.A.3. Required policies and 

procedures for housing programs. 

In addition to the requirements in 

III.A.2., all policies and procedures 

related to housing activities must also 

address the following requirements: 

(i) a description of the process the 

grantee will use to provide exceptions to 

the maximum amount of assistance on 

a case-by-case basis. At a minimum, the 

grantee’s policies and procedures must 

communicate how it will analyze the 

circumstances under which an 

exception is needed and how it will 

demonstrate that the amount of 

assistance is necessary and reasonable; 

(ii) a description of how its program 

will align and build upon any funding 

received from HUD’s Rapid Unsheltered 

Survivor Housing (RUSH) program, as 

applicable; 

(iii) a description of the building 

standards and codes to be used by 

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. Grantee policies and 

procedures must require a warranty 

period post-construction with a formal 

notification to beneficiaries on a 

periodic basis (e.g., one year and one 

month before expiration date of the 

warranty); 

(iv) a description of the grantee’s 

affordability standards, including 

‘‘affordable rents,’’ the enforcement 

mechanisms, and applicable 

timeframes, that will apply to the new 

construction of affordable rental 

housing of five or more units, as 

required in section III.D.5.d; 

(v) a description of how the grantee 

will use social media platforms to alert 

its residents when its applications for 

housing activities are open and when it 

is holding public hearings on CDBG–DR 

plans or projects; 

(vi) a description of the grantee’s 

process for accepting alternative 

methods for documenting ownership. 

Grantees may include the following 

documentation as acceptable: deed, 

title, mortgage documentation, tax 

receipts or bills, home insurance, home 

purchase contracts, will or affidavit or 

heirship naming them as heir, receipts 

of major repairs completed prior to the 

disaster, court documents, letter from a 

manufactured housing community 

owner or public official, selfcertification, or utility bills; and 

(vii) a description of the basic DOB 

framework for housing activities. 

Grantee policies and procedures must 

follow the process outlined in Appendix 

C in the Universal Notice and include 

how the grantee will carry out the 

following steps for each beneficiary: (1) 

assess applicant’s total need; (2) identify 

total assistance; (3) exclude nonduplicative amounts; (4) exclude funds 

for a different purpose; (5) exclude 

funds for the same purpose, different 

allowable use; (6) identify a final DOB 

amount (if any) and calculate the 

CDBG–DR award; and (7) reassess 


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14 View additional information to locate a HUDapproved Housing Counseling Agency here: https:// 

apps.hud.gov/offices/hsg/sfh/hcc/ 

hcs.cfm?weblistaction=summary. 

unmet need when necessary. Grantees 

must include the requirement to have 

beneficiaries sign an agreement to repay 

any assistance later received for the 

same purpose as the CDBG–DR funds 

(e.g., a subrogation agreement) and 

include any other required steps listed 

in Appendix C. 

A grantee that will be coordinating 

with a HUD-approved Housing 

Counseling Agency 14 would include 

what information and services it will 

make available to both renters and 

homeowners. 

III.A.4. Required policies and 

procedures for infrastructure programs. 

In addition to the requirements in 

section III.A.2., all policies and 

procedures related to infrastructure 

activities must also address the 

following requirements: 

(i) how the grantee 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 local governments and 

Indian Tribes in the MID areas to 

identify the unmet needs and associated 

costs of disaster-related infrastructure 

improvements; 

(ii) how the grantee will plan for the 

long-term operation and maintenance of 

infrastructure and public facility 

projects funded by CDBG–DR, as 

maintenance and repair of public 

facilities and improvements is generally 

ineligible. Grantees must plan for the 

long-term sustainability of these 

projects, including who will pay these 

costs and who will operate and 

maintain the projects once they are 

complete; 

(iii) 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; 

(iv) 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 and 

private investment; 

(v) how the grantee will prioritize 

infrastructure within historically 

underserved communities that lacked 

adequate investments in housing, 

transportation, water, and wastewater 

infrastructure prior to the disaster; and 

(vi) a description of the basic DOB 

framework for infrastructure activities. 

Grantee policies and procedures must 

follow the process outlined in Appendix 

C in the Universal Notice and include 

how the grantee will carry out the 

following steps for each entity (e.g., 

local government) assisted: (1) assess 

applicant’s total need; (2) identify total 

assistance; (3) exclude non-duplicative 

amounts; (4) exclude funds for a 

different purpose; (5) exclude funds for 

the same purpose, different allowable 

use; (6) identify a final DOB amount (if 

any) and calculate the CDBG–DR award; 

and (7) reassess unmet need when 

necessary. In its policies and 

procedures, the grantee must include 

how it will identify whether any local 

or State funds are available for these 

types of activities. And if local or State 

funds were previously designated or 

planned for the activity, but are no 

longer available, the grantee must 

describe how it will 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). The grantee must include any 

other required steps listed in Appendix 

C. 

III.A.5. Required policies and 

procedures for economic revitalization 

programs. In addition to the 

requirements in section III.A.2., all 

policies and procedures related to 

economic revitalization activities must 

also address the following requirements: 

(i) a description of how the grantee 

will prioritize underserved communities 

that have been impacted by the disaster 

and that were economically distressed 

before the disaster, as described in 

section III.D.7.a. While HUD defines the 

minimum standard for underserved 

communities in section I.C.1.c., grantees 

must describe how they will further 

define areas that are considered 

underserved communities; 

(ii) a description of how the grantee 

will use social media platforms to alert 

its residents when its applications for 

economic development activities are 

open and when it is holding public 

hearings on CDBG–DR plans or projects; 

and 

(iii) a description of the basic DOB 

framework for economic revitalization 

activities. Grantee policies and 

procedures must follow the process 

outlined in Appendix C in the Universal 

Notice and include how the grantee will 

carry out the following steps for each 

business assisted: (1) assess applicant’s 

total need; (2) identify total assistance; 

(3) exclude non-duplicative amounts; 

(4) exclude funds for a different 

purpose; (5) exclude funds for the same 

purpose, different allowable use; (6) 

identify a final DOB amount (if any) and 

calculate the CDBG–DR award; and (7) 

reassess unmet need when necessary. 

Grantees must include the requirement 

to have entities sign an agreement to 

repay any assistance later received for 

the same purpose as the CDBG–DR 

funds (e.g., a subrogation agreement) 

and include any other required steps 

listed in Appendix C. 

III.A.6. Consultation and website 

requirements for program 

implementation policies. To promote 

effective program design and public 

transparency, grantees must comply 

with the consultation and disaster 

recovery website requirements for 

program implementation policies as 

described in this section. Note, grantees 

are not expected to release all program 

policies and procedures at once and can 

develop and publish program-specific 

policies and procedures in phases, as 

programs are ready to launch. However, 

grantees must comply with the 

timelines identified in section III.A.1. of 

the Universal Notice for creating and 

finalizing program-specific policies and 

procedures. The grantee must also 

update its citizen participation plan (see 

section I.C.2.) to describe how it will 

comply with the requirements of 

sections III.A.6.a. and III.A.6.b. 

III.A.6.a. Consultation with citizen 

advisory groups. Grantees are required 

to gather feedback and 

recommendations on key program 

decisions from its citizen advisory 

group at least annually. A citizen 

advisory group is a body composed of 

individuals from a community who 

volunteer or are appointed to provide 

input, advice, and recommendations on 

various issues and policies affecting 

their community. These groups 

typically serve as a bridge between the 

general public and decision-makers, 

offering insights, perspectives, and 

expertise to help inform and shape 

decisions that impact the community’s 

well-being and development. A citizen 

advisory group will look different in 

each community because each 

community is unique. Generally, the 

individuals who volunteer or are 

appointed should represent the 

demographics of the community it is 

supporting. For example, a citizen 

advisory group in a community that is 

predominantly renters should include 

individuals who are renters. A citizen 

advisory group in a community that has 

a large share of a specific racial or 

ethnic minority group should include 


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members of that specific racial or ethnic 

minority group. Each grantee can 

determine the cadence of meetings and 

how the group will provide feedback to 

the grantee. As an example, a citizen 

advisory group may review programspecific policies and procedures to 

determine if programs are adequately 

reaching and assisting intended 

beneficiaries and are achieving intended 

program outcomes. The grantee must 

describe the process it will follow for 

the citizen advisory group in its citizen 

participation plan. 

III.A.6.b. Publication of programspecific policies and procedures. 

Grantees must prominently post final 

program-specific policies and 

procedures on their official disaster 

recovery website within the timeline 

identified in section III.A.1. of the 

Universal Notice. In addition, these 

program-specific policies and 

procedures must be available to the 

public on the website before the grantee 

formally begins accepting applications 

for that program. Grantees must also 

comply with the general website 

requirements of section III.B.8. of the 

Universal Notice. 

III.A.7. HUD program-specific policies 

and procedures review process. Within 

two years from the applicability date of 

the AAN, HUD will review the grantee’s 

program-specific policies and 

procedures, either onsite or through 

remote monitoring, for compliance with 

the requirements in section III. If a 

grantee’s program-specific policies and 

procedures are not in compliance with 

the requirements of the Universal 

Notice, HUD may undertake corrective 

and remedial actions as described in 

section III.F.2.a. HUD will continue to 

monitor the grantee’s program-specific 

policies and procedures during the 

normal course of business (i.e., CPD’s 

Monitoring Handbook and applicable 

CPD Notice Implementing Risk 

Analyses for CPD programs). 

III.B. Grant Administration 

III.B.1. Overall benefit. Consistent 

with the HCDA, 24 CFR 570.484 and 24 

CFR 570.200(a)(3), the Universal Notice 

requires grantees to comply with the 

overall benefit requirement 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 AAN and related 

program income. 

A grantee may request a waiver of the 

overall benefit requirement to reduce 

the LMI benefit requirement below 70 

percent of the total grant. To request a 

waiver, the grantee must submit a 

substantial amendment, 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’ disaster-related 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 LMI persons. 

III.B.1.a. Use of the ‘‘upper quartile’’ 

or ‘‘exception criteria.’’ The LMA 

benefit requirement is modified when 

communities have few, if any, areas 

within their jurisdiction that have 51 

percent or more LMI residents. In such 

a community, activities must serve an 

area that contains a percentage of LMI 

residents that is within the upper 

quartile of 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’’ (i.e., upper quartile) applies to 

CDBG–DR funded activities in 

entitlement communities covered by 

such criteria, including entitlement 

communities that receive disaster 

recovery funds from a State. Each year, 

HUD publishes the most recent data 

here: https://www.hudexchange.info/ 

programs/acs-low-mod-summary-data/ 

acs-low-mod-summary-data-exceptiongrantees/. 

III.B.1.b. 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: https://

www.huduser.gov/portal/datasets/cdbgincome-limits.html. 

Accordingly, HUD clarifies that the 

annual uncapped income limits 

published by HUD apply 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. 

III.B.2. Use of the urgent need 

national objective. Because HUD 

provides CDBG–DR funds only to 

grantees with documented disasterrelated 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 (42 U.S.C. 

5304(b)(3)) 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 AAN. 

Pursuant to this alternative 

requirement, grantees that use the 

urgent need national objective must 

address the following three criteria in 

their Action Plan: (i) describe in the 

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; 

(ii) identify each program or activity 

that will use the urgent need national 

objective—either through its initial 

submission or through a substantial 

amendment to the Action Plan 

submitted by the grantee within 36 

months of the applicability date of the 

grantee’s initial AAN; and (iii) 

document how each program and/or 

activity funded under the urgent need 

national objective responds to the 

urgency, type, scale, and location of the 

disaster-related impact as described in 

the grantee’s unmet needs assessment. 

This alternative urgent need national 

objective is in effect for a period of 36 

months following the applicability date 

of the grantee’s initial AAN. After 36 

months, the grantee will be required to 

follow the criteria established in section 

104(b)(3) of the HCDA (42 U.S.C. 

5304(b)(3)) 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.B.3. Administration cap. 

Historically, the appropriations acts 

authorize up to five percent of the grant 

(plus five percent of program income 

generated by the grant) to be used for 

administrative costs (i.e., program 

administrative costs) by the grantee or 

its subrecipients. The Secretary does not 


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1770 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

15 View HUD’s guidance on allocating costs 

between program administrative costs, activity 

delivery costs, and planning costs for CDBG–DR 

Grantees published in CPD Notice 23–06 here: 

https://www.hud.gov/sites/dfiles/OA/images/2023- 

06cpdn.pdf. 

16 View HUD’s guidance on allocating costs 

between program administrative costs, activity 

delivery costs, and planning costs for CDBG–DR 

Grantees published in CPD Notice 23–06 here: 

https://www.hud.gov/sites/dfiles/OA/images/2023- 

06cpdn.pdf. 

have the authority to waive or specify 

an alternative requirement to increase 

the grant administration cap. 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.C.1. For example, administrative 

activities include the grantee’s overall 

grant management, internal auditor 

activities, and DRGR recordkeeping.15

III.B.3.a. Use of funds for 

administrative costs across multiple 

grants. The appropriations acts may 

authorize special treatment of grant 

administrative funds. Grantees receiving 

funds under the Universal Notice, and 

that have received CDBG–DR or CDBG– 

MIT grants in the past or in any 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 these acts 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 (i) 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 the 

grant); (ii) review and modify its 

financial management policies and 

procedures regarding the tracking and 

accounting of administration costs, as 

necessary; and (iii) 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 II.A. Grantees are reminded 

that all uses of funds for program 

administrative activities must qualify as 

an eligible administration cost. 

III.B.4. Planning cap. Both State and 

local government grantees are limited to 

spending a maximum of 15 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. For example, planning 

activities can include grantees 

conducting feasibility studies, 

marketing studies, local mitigation 

plans, and long-term disaster recovery 

plans.16

III.B.5. Public service cap. Both State 

and local government grantees are 

limited to spending a maximum of 15 

percent of their total grant amount on 

public services. Public service costs 

subject to the 15 percent cap are those 

defined in 42 U.S.C. 5305(a)(8) and 

more broadly in 24 CFR 570.201(e). For 

example, public service activities can 

include mental health services and 

counseling, and legal services for 

disaster impacted individuals. The 

Universal Notice identifies specific 

activities in III.D. that are exempt from 

this cap with the waiver and alternate 

requirements established for each 

activity. 

III.B.6. Consolidated Plan. The 

requirements for consistency with the 

consolidated plan in Section 106 of the 

Cranston-Gonzalez National Affordable 

Housing Act (42 U.S.C. 12706), and 

regulations at 24 CFR 91.225(a)(5), and 

24 CFR 91.325(a)(5)) are temporarily 

waived 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 

AAN. 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 AAN. 

III.B.7. Procurement. To have a 

proficient procurement process, the 

grantee must submit the policies and 

procedures to HUD as required by 

section II.A.1.b.; and post the required 

documentation to the official website as 

described in section III.B.8. below. 

Additionally, the grantee must include 

the following alternative requirements 

in this section in its submitted 

procurement policies and procedures, as 

appropriate. 

III.B.7.a. Procurement alternative 

requirements. HUD is establishing an 

additional alternative requirement for 

all procurement actions 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. 

III.B.7.b. Procurement when using 

CDBG–DR as non-Federal match. When 

using CDBG–DR grant funds as the nonFederal match as explained in section 

III.D.6.d., grantees can adopt the 

procurement policies and procedures 

that satisfy the other Federal agency’s 

requirements to promote consistency 

and seamlessly leverage their funding, 

so long as they meet other cross-cutting 

requirements that apply to the CDBG– 

DR funds (e.g., Section 3 requirements, 

Davis Bacon Act, etc.). Grantees must 

identify which procurement policies 

and procedures will apply and keep any 

decision document in its files. For 

example, CDBG–DR grants to local 

governments are subject to the same 

procurement requirements that apply to 

procurements by local governments 

using FEMA Public Assistance (PA) 

funds. State CDBG–DR grantees (and 

other CDBG–DR grantees subject to State 

CDBG rules under a waiver and 

alternative requirement) should 

consider including a provision in their 

procurement requirements that adopts 

FEMA procurement requirements for 

activities that will be used to satisfy the 

non-Federal match. This will eliminate 

confusion about which procurement 

rules apply. 

Additionally, when CDBG–DR funds 

are used as the non-Federal match in 

another Federal program, grantees are 

not required to comply with the 

alternative requirements in section 

III.B.7.a. above. 

III.B.8. Public disaster recovery 

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 


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17Note: the technical standards of Section 508 

provide a practical benchmark when seeking to 

comply with nondiscrimination and effective 

communication obligations under Section 504 and 

the ADA. 

18 View HUD’s guidance on LEP for more 

information on vital documents here: https://

www.lep.gov/guidance/HUD_guidance_Jan07.pdf. 

are used and administered. The public 

website must be accessible to persons 

with disabilities and individuals with 

LEP in compliance with Section 504, 

Title II of the ADA,17 Title VI, and 

Executive Order 13166. 

III.B.8.a. Publication and accessibility 

of required documents. 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. To meet 

this requirement, each grantee must 

make the following items available on 

its website: the Admin Action Plan (if 

applicable) and the Action Plan 

(including all amendments); each 

performance report (as created using the 

DRGR system); citizen participation 

plan; procurement policies and 

procedures; program-specific policies 

and procedures including a projection 

of expenditures and outcomes 

(III.A.6.b.); 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. 

The grantee must make the required 

documents available on the grantee’s 

website in a form accessible to persons 

with disabilities and those with LEP.18

Grantees must take reasonable steps to 

ensure meaningful access to their 

programs and activities by LEP persons, 

members of protected classes, 

vulnerable populations, and individuals 

from other underserved communities, 

and address any possible digital 

inequities and related barriers. 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 

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.B.9. Application status. The 

grantee must provide multiple methods 

of communication, such as websites, 

dashboards, social media, 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 

and when the application period begins. 

While grantees must identify multiple 

methods, one of the methods identified 

must be to include this information on 

the grantee’s disaster recovery website. 

This must include specific information 

on application status, including what 

quarter the grantee projects it will open 

application intake for each program, and 

then on a monthly basis, the grantee 

must include information on which 

specific applications are under review, 

any other relevant status update 

determined by the grantee, and which 

applications are approved/disapproved. 

Grantees must use unique application 

number identifiers to ensure personally 

identifiable information (PII) is 

protected. Grantees must also describe 

how they will use social media in their 

policies and procedures to announce 

when applications are open as required 

by sections III.A.3. and III.A.5. HUD 

strongly encourages grantees to consider 

how their application process can be 

inclusive of persons who are homebound or unable to move freely. 

III.B.10. Environmental requirements. 

III.B.10.a. 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 local 

governments), the State must submit the 

RROF and Certification to HUD for 

approval. 

III.B.10.b. Responsibilities of States 

assuming HUD environmental 

responsibilities. When a State grantee 

distributes funds to subrecipients that 

have Responsible Entity authority under 

24 CFR part 58 (i.e., units of general 

local government), the State must 

exercise HUD’s responsibilities in 

accordance with 24 CFR 58.18. In its 

policies and procedures, a State must 

designate the agency or agencies that 

will be responsible for carrying out the 

requirements and administrative 

responsibilities set forth in 24 CFR part 

58, subpart H. The designated State 

agency must develop a monitoring and 

enforcement program for post-review 

actions on environmental reviews and 

monitor compliance with any 

environmental conditions included in 

the award. 

III.B.10.c. Adoption of another 

Federal agency’s environmental review. 

Recipients of CDBG–DR funds that 

supplement other Federal assistance 

may adopt, without review or public 

comment, any environmental review, 

approval, or permit performed by a 

Federal agency, so long as the actions 

covered by the existing environmental 

review, approval, or permit and the 

actions proposed for the CDBG–DR 

supplemental funds are substantially 

the same. Such adoption shall satisfy 

the responsibilities of the recipient with 

respect to such environmental review, 

approval, or permit. 

Projects originally funded by another 

agency that are later supplemented with 

CDBG–DR do not have to supplement 

the other agency’s environmental review 

with any HUD environmental 

requirements that differ from the 

originating agency (e.g., Federal Flood 

Risk Management Standard (FFRMS) 

floodplain and elevation, noise, etc.). 

However, if the activity is modified so 

the other agency’s environmental review 

no longer covers the activity, the grantee 

is required to reevaluate and 

supplement the other agency’s 

environmental review to comply with 

all applicable HUD environmental 

regulations in 24 CFR part58. The 

grantee’s environmental review 

obligations are considered complete 

when adopting another agency’s 

environmental review as outlined in 

this section. To be adequate: 

1. The grantee must obtain a 

completed electronic or paper copy of 

the Federal agency’s review and retain 

a copy of the full file in its 

environmental review record. 

2. The grantee must review the scope 

of work completed by the Federal 

agency’s review and verify that the 

scope of work is substantially the same 

with a memo to file in its environmental 

review record. 

3. The grantee must notify HUD on 

the RROF (HUD-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 RROF and Certification, 

immediately approve the release of 

funds for an activity or project assisted 

with CDBG–DR funds if the recipient 


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19 Visit HUD’s Office of Environment and 

Energy’s website for additional information on 

FFRMS here: https://www.hud.gov/program_

offices/comm_planning/environment_energy/ffrms. 

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). 

III.B.10.d. 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). 

III.B.10.e. Tiered environmental 

reviews. Tiering, as described at 40 CFR 

1508.1(oo), 40 CFR 1501.11, 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’’ 

(40 CFR 1501.11(b)). 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 singlefamily 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 RROF 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 both the broad level and the sitespecific review have been completed 

and approved. 

III.B.10.f. FFRMS floodplain and 

elevation. HUD published the FFRMS 

Final Rule on April 23, 2024, the rule 

became effective on May 23, 2024, and 

the compliance date for CDBG–DR 

funds was on June 24, 2024.19 CDBG– 

DR grantees must update their 

construction standards and any related 

policies and procedures to comply with 

the requirements outlined in the FFRMS 

final rule. While this section in the 

notice summarizes the new rule, 

grantees should reference the new 

requirements in Part 55 to ensure 

compliance. 

The floodplain area is determined by 

the FFRMS based on available data in 

the project area and whether the project 

scope contains a Critical Action (as 

defined in 24 CFR 55.2(b)(3)). 

Residential buildings (as defined in 44 

CFR 59.1) and nonresidential buildings 

(as defined in 44 CFR 59.1) that are 

located in the floodplain and receive 

assistance for new construction, 

reconstruction, rehabilitation of 

substantial damage, or rehabilitation 

that results in substantial improvement, 

must be elevated to those floodplain 

standards. HUD requires grantees to 

follow a three-tiered data standard to 

determine the FFRMS floodplain, as 

follows: 

• Non-critical Actions: (1) use the 

climate-informed science approach 

(CISA), if available and actionable and 

formally adopted by HUD; (2) if CISA is 

not available, then use the 0.2-percentannual-chance-floodplain (500-year 

floodplain), determined by FEMA; or (3) 

if neither of these options are available, 

then use the freeboard value approach 

(FVA) by adding two feet to the base 

flood elevation (BFE). 

• Critical Actions: (1) use the CISA, if 

available and actionable and formally 

adopted by HUD; (2) if CISA is not 

available, then use the 500-year 

floodplain or the FVA by adding three 

feet to the BFE, whichever results in the 

larger floodplain and higher elevation; 

or (3) if the 500-year floodplain is not 

available, then use the FVA by adding 

three feet to the BFE. 

For residential buildings undergoing 

new construction or substantial 

improvement located in the FFRMS 

floodplain, the lowest floor (or FEMAapproved equivalent) must be designed 

using the elevation of the FFRMS 

floodplain as the baseline standard for 

elevation (except where higher 

elevations are required by Tribal, State, 

or locally adopted code or standards, in 

which case those higher elevations 

apply). Residential buildings (including 

multi-family) that have no dwelling 

units below the FFRMS floodplain that 

are not critical actions, and 

nonresidential buildings, undergoing 

new construction or substantial 

improvement shall be designed, either 

with the lowest floor (including 

basement) elevated to or above the 

elevation of the FFRMS floodplain or 

with the structure floodproofed at least 

up to the elevation of the FFRMS 

floodplain (using floodproofing 

standards as outlined in FEMA 

regulations found in 44 CFR 

60.3(c)(3)(ii) and (c)(4)(i), or successor 

standard. 

In addition to the requirements 

described in the FFRMS final rule, 

grantees must comply with (1) all 

applicable environmental review 

requirements found in 24 CFR part 55; 

and (2) all applicable State, local, and 

Tribal codes and standards for 

floodplain management, including 

elevation, setbacks, and cumulative 

substantial damage requirements. 

Grantees should note that structures that 

are elevated must meet Federal 

accessibility standards. 

III.B.11. 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. Grantees are 

encouraged to work with State 

insurance regulators and industry to 

assess availability and affordability of 

insurance. 

III.B.11.a. Flood insurance purchase 

requirements. When grantees use 

CDBG–DR funds to rehabilitate or 

reconstruct existing residential 

buildings in a Special Flood Hazard 

Area (SFHA), the grantee must comply 

with applicable Federal, State, local, 

and Tribal laws and regulations related 

to both flood insurance and floodplain 

management. SFHA is defined by FEMA 

as the area that will be inundated by the 

flood event having a one-percent chance 

of being equaled or exceeded in any 

given year. The one-percent annual 

chance flood is also referred to as the 

base flood or 100-year flood. 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 property receiving 

HUD assistance for acquisition or 

construction (including rehabilitation) 

within a Special Flood Hazard Area and 

with 24 CFR 58.6(a)(2), which requires 

that flood insurance under the National 

Flood Insurance Program be obtained. 

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. 

III.B.11.b. Federal assistance to 

owners remaining in a floodplain. 

III.B.11.b.(i) 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 


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20 View HUD’s instructions and templates on how 

to handle CDBG–DR program income here: https:// 

www.hud.gov/program_offices/comm_planning/ 

cdbg-dr/program_income. 

disaster assistance that was (1) 

conditioned on the person first having 

obtained flood insurance under 

applicable Federal law, and (2) the 

person has subsequently failed to obtain 

and maintain flood insurance as 

required on such property. 

The grantee must implement a 

process to verify and monitor for 

compliance with section 582 and the 

requirement to obtain and maintain 

flood insurance. 

III.B.11.b.(ii) 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 (1) the 

combined household income is greater 

than either 120 percent of AMI or the 

national median, (2) the property was 

located in a SFHA at the time of the 

disaster, and (3) the property owner did 

not obtain or maintain flood insurance 

on the damaged property, even when 

the property owner was not required to 

obtain and maintain such insurance. 

III.B.11.b.(iii) Responsibility to inform 

property owners to obtain and maintain 

flood insurance. Section 582 of the 

National Flood Insurance Reform Act of 

1994, as amended, (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. 

III.B.12. Program income. For State or 

local government grantees, HUD is 

waiving all applicable program income 

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

570.489(e) and (f), 24 CFR 570.500, 24 

CFR 570.504, and 24 CFR 570.509(a)(4) 

and providing the alternative 

requirement described below.20 Program 

income earned by Indian Tribes that are 

subrecipients of State or local 

government grantees will be subject to 

the program income requirements for 

subrecipients of those grantees. 

III.B.12.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.B.12.b. below, and received by State 

or local government grantees, including 

subrecipients. When program 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 Universal 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 State or unit of general local 

government grantees, including 

subrecipients, 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 State 

or local government grantees, including 

subrecipient, 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, 

including interest paid by borrowers on 

loans made from a revolving fund, as 

defined in section III.B.13. 

(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, as 

defined in section III.B.13. 

(ix) Interest earned on lump sum 

drawdowns for financing of property 

rehabilitation activities as described in 

24 CFR 570.513; 

(x) 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. 

(xi) Gross income paid to a State or 

local government grantees, including 

subrecipients, from the ownership 

interest in a for-profit entity in which 

the income is in return for the provision 

of CDBG–DR assistance. 

(xii) Any income received by State or 

local government grantees related to the 

CDBG–DR grant after closeout, 

including income received by 

subrecipients after closeout (see section 

II.D.12.e.). 

III.B.12.b. Program income—does not 

include. Program income does not 

include the following: 

(i) The total amount of funds that is 

less than $35,000 received over the life 

of the grant and retained by State or 

local government grantees, including 

subrecipients. Once a grantee, including 

subrecipients, meets or exceeds the 

$35,000 threshold, only funds over the 

threshold are considered program 

income and are subject to the 

requirements of the Universal Notice. 

(ii) Amounts generated by activities 

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

HCDA (42 U.S.C. 5305(a)(15) and 

carried out by an entity under the 

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

HCDA. 

(iii) Income (except for interest 

described in 24 CFR 570.513) earned on 

grant advances from the U.S. Treasury; 

this income must be remitted to HUD 

for transmittal to the U.S. Treasury. 

III.B.12.c. Recording program income. 

For State or local government grantees, 

including their subrecipients, the 

receipt and expenditure of program 

income shall be recorded using both 

DRGR and internal financial records as 

part of the financial transactions of the 

CDBG–DR grant. 

III.B.12.d. Retention of program 

income. State grantees may permit local 

governments that receive or will receive 

program income to retain the program 

income but are not required to do so. 


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Additionally, State or local government 

grantees may permit subrecipients that 

receive or will receive program income 

to retain the program income but are not 

required to do so. In all cases, program 

income retained by local governments 

or subrecipients is treated as additional 

CDBG–DR funds subject to the 

requirements of the Universal Notice. 

The written agreement between the 

grantee and the subrecipient, shall 

specify whether program income 

received is to be returned to the grantee 

or retained by the subrecipient. When 

program income is to be retained by the 

subrecipient, the agreement shall 

specify the activities that will be 

undertaken with program income and 

that all provisions of the written 

agreement shall apply to the specified 

activities. When the subrecipient retains 

program income, transfers of grant funds 

by the grantee to the subrecipient shall 

be adjusted according to the 

disbursement principles described in 

section III.B.12.e. Any program income 

on hand when the agreement expires, or 

received after the agreement’s 

expiration, shall be paid to the grantee. 

III.B.12.e. Program income—use, close 

out, and transfer. 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 

Universal Notice and must be used in 

accordance with the grantee’s Action 

Plan for disaster recovery. Grantees 

must substantially disburse program 

income before making additional 

withdrawals from the United States 

Treasury, except as provided in section 

III.B.13. State grantees may meet this 

requirement by carrying out activities 

directly or by distributing program 

income to local governments in 

accordance with the State’s approved 

method of distribution, as provided in 

section I.C.1.f. Local government 

grantees may meet this requirement by 

carrying out activities directly as 

provided in section I.C.1.f. 

Any income received by State or local 

government grantees related to the 

CDBG–DR grant after closeout, 

including income received by 

subrecipients after closeout, shall be 

treated as program income and shall be 

subject to the requirements of the 

Universal Notice, unless transferred to 

an annual CDBG program. If transferred 

to an annual CDBG program, the 

following rules apply: 

(1) Program income received by State 

or local government grantees before or 

after closeout, including program 

income received by subrecipients, may 

be transferred by the State or local 

government grantees to the annual 

CDBG program before or after closeout 

of the grant that generated the program 

income. In all cases, the grantee must 

first seek and then receive HUD’s 

approval; 

(2) Any program income transferred 

will not be subject to the waivers and 

alternative requirements of the 

Universal Notice. Rather, those funds 

will be subject to the applicable regular 

CDBG program rules. Any other transfer 

of program income not specifically 

addressed in the Universal Notice may 

be carried out if the grantee first seeks 

and then receives HUD’s approval; and 

(3) CDBG–DR grantees must continue 

to report annually in DRGR on any 

program income received following 

closeout of the grant. 

III.B.13. Revolving funds. State or 

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 a local government, 

including subrecipients, to carry out 

specific identified activities. A 

revolving fund, for these purposes, 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 used or 

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. Given that funds 

in a revolving loan fund, including 

interest earned on funds held in the 

revolving loan fund as well as interest 

paid by borrowers on loans made from 

the fund, are considered program 

income, grantees may transfer revolving 

loan funds before or after closeout, 

pursuant to section III.B.12.e. 

III.B.14. Reimbursement of disaster 

recovery expenses. A grantee may not 

charge such pre-award or preapplication costs to grants if the grantee 

cannot meet all requirements at 24 CFR 

part 58. Pre-award costs are defined in 

2 CFR 200.458 and are allowed in 

instances in which the CDBG–DR 

grantee anticipated an allocation and 

incurred an eligible cost prior to the 

award. For all pre-award costs, 

compliance with 24 CFR part 58 must 

be completed before the start of the 

activity. Pre-application costs are costs 

incurred by an applicant to CDBG–DR 

funded programs on or after the incident 

date of the qualifying disaster but before 

the time of application to a grantee or 

subrecipient (this may be before or after 

the grantee signs its CDBG–DR grant 

agreement). For all pre-application 

costs, compliance with 24 CFR part 58 

must be completed prior to the 

commitment of funds (i.e., prior to the 

grantee or subrecipient committing to 

reimburse the qualifying entity for costs 

incurred). Under CDBG–DR 

appropriations acts and HUD’s 

environmental regulations in 24 CFR 

part 58, the CDBG–DR ‘‘recipient’’ (as 

defined in 24 CFR 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 all applicable Federal laws and 

authorities. The responsible entity 

assumes all legal liability for the 

application, compliance, and 

enforcement of these requirements. 

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. 

III.B.14.a. Reimbursement of preaward costs by a grantee or 

subrecipient. The provisions at 24 CFR 

570.200(h)(1)(i), (v), and (vi) are waived; 

however, the rest of the provisions at 24 

CFR 570.200(h) will continue to apply 

to State and local governments to permit 

grantees to incur pre-award costs. 

Additionally, HUD is establishing the 

following alternative requirement: the 

provisions at 24 CFR 570.489(b) are 

applied to all CDBG–DR grantees to 

permit States and local governments to 

allow subrecipients to incur costs before 

the establishment of a formal grant 

relationship between the grantee and 

the subrecipient. Grantees may 

reimburse themselves or their 

subrecipients for otherwise allowable 

costs incurred on or after the incident 

date of the qualifying disaster, if the 

environmental review and all other 

cross-cutting requirements are met 

before the underlying activity (e.g., 

rehabilitation of a government building) 

begins. As an alternative requirement, 

grantees must include any pre-award 

activities in their Action Plan, including 

eligible activities that were funded with 

short-term subsidized loans (e.g., bridge 


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loans) that the grantee intends to 

reimburse or otherwise charge to the 

grant, consistent with applicable 

program requirements. 

III.B.14.b. Reimbursement of preapplication costs of homeowners, 

renters, businesses, and other qualifying 

entities. Grantees are permitted to 

charge to grants the pre-application 

costs of homeowners, renters, 

businesses, and other qualifying entities 

for otherwise allowable costs incurred 

on or after the incident date of the 

qualifying disaster as identified in a 

grantees’ applicable AAN. In addition to 

the terms described in the remainder of 

the Universal Notice, grantees may only 

charge costs to the grant that meet the 

following requirements: 

• Grantees may only charge the costs 

incurred for disaster relief payments 

(see section III.D.5.h.) and 

rehabilitation, demolition, and 

reconstruction of single family, 

multifamily, and nonresidential 

buildings, including commercial 

properties, owned by private 

individuals and entities, before the 

owner or renter 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 DOB 

check before providing assistance 

pursuant to Appendix C. 

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 two years after the 

applicability date of the grantee’s initial 

AAN for that disaster; and (2) the person 

or entity incurs 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. 

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 is necessary and reasonable. 

III.B.15. URA, Section 104(d), and 

related CDBG program requirements. 

Certain activities and projects 

undertaken with CDBG–DR funds are 

subject to the URA (49 CFR part 24), 

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 (24 CFR 570.606), except as 

modified by these waivers and 

alternative requirements: 

1. Process for updating existing 

RARAP or establishing a CDBG–DR 

specific RARAP (review section 

III.B.15.a.). 

2. Optional relocation assistance 

policies (review section III.B.15.b.). 

3. Relocation assistance requirements 

under Section 104(d) (review section 

III.B.15.c.). 

4. One-for-one replacement waiver 

process (review section III.B.15.d.). 

5. Lump-sum relocation assistance to 

displaced residential tenants (review 

section III.B.15.e.). 

6. Voluntary acquisition—homebuyer 

primary residence purchase (review 

section III.B.15.f.). 

7. Applicability of Section 414 of the 

Stafford Act for projects that begin one 

year after the applicable presidential 

disaster (review section III.B.15.g.). 

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 and/ 

or providing alternative requirements in 

this section for the purpose of providing 

enough flexibility while preserving 

minimum standards of tenant and 

property owner protections, and 

promoting the stable supply of decent, 

safe, and sanitary affordable housing. 

III.B.15.a. Section 104(d) RARAP. 

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 

and covered under section III.A.2.b. 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 

requirements listed in this section and 

applicable waivers and alternative 

requirements. 

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. 

As each grantee establishes and 

supports feasible and cost-effective 

recovery efforts to make communities 

more resilient against future disasters, 

the RARAP must describe how the 

grantee plans to minimize displacement 

of families and individuals from their 

homes and neighborhoods as a result of 

any CDBG–DR assisted activities, 

potentially through non-displacing 

disaster recovery activities (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 or 

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 

would be required for those displaced. 

This description must also focus on 

relocation assistance under the URA 

and its implementing regulations at 49 

CFR part 24, section 104(d) and its 

implementing regulations at 24 CFR part 

42, 24 CFR 570.488, and/or 24 CFR 

570.606, and relocation assistance 

pursuant to this section of the Universal 

Notice, as well as any other assistance 

being made available to displaced 

persons. The RARAP must include a 

description of how the grantee will plan 

CDBG–DR 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. Any solutions 

to minimize permanent displacement, 

such as the implementation of 

temporary relocations or construction in 

phases, are strongly encouraged. 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 


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with all applicable relocation 

requirements. 

Grantees must include in their 

RARAP, their plans to replace, on a onefor-one basis, all occupied and vacant 

occupiable low-income dwelling units 

that are demolished or converted with 

CDBG–DR funds to another use 

according to 24 CFR 42.325(b) and 24 

CFR 49.375, unless a waiver is pursued 

by the grantee and granted by HUD, as 

described in III.B.15.d. 

The RARAP, including section 104(d) 

one-for-one housing replacement plans 

and protocols (if not waived), must be 

included in the grantee’s programspecific policies and procedures as 

required in III.A.2.b.(ii). 

III.B.15.b. Optional relocation. 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 

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 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 for CDBG–DR funds. 

III.B.15.c. Section 104(d) relocation 

assistance. The relocation assistance 

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

and 104(d)(2)(B) of the HCDA and 24 

CFR 42.350, are waived. This waiver 

limits the types and amount of 

relocation assistance a section 104(d) 

displaced person, as defined under 24 

CFR 42.305, is eligible to receive. The 

relocation assistance will now align 

with the types and amounts provided 

under the URA and implementing 

regulations at 49 CFR part 24. This 

waiver does not impact a person’s 

eligibility as a displaced person under 

section 104(d), rather it limits the 

amounts and types of relocation 

assistance under section 104(d) to the 

amounts and types of assistance for 

displaced persons under the URA, as 

amended. 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–DR funds are subject to the 

requirements of the URA; however, only 

CDBG–DR funds are subject to section 

104(d), while FEMA funds are not. This 

limited waiver of the section 104(d) 

relocation assistance requirements 

ensures uniform and equitable treatment 

of individuals eligible to receive 

benefits under section 104(d) by 

establishing that all forms of relocation 

assistance provided to those individuals 

must comply with URA requirements. 

III.B.15.d. One-for-one replacement 

requirement. All occupied and vacant 

occupiable lower-income dwelling units 

that are demolished or converted to a 

use other than lower-income dwelling 

units in connection with a CDBG–DR 

assisted activity must be replaced with 

comparable lower-income dwelling 

units in compliance with 24 CFR 

42.375. CDBG–DR grantees must follow 

the requirements at 24 CFR 42.375 and 

HUD will follow up the publication of 

the Universal Notice with guidance on 

how to meet these requirements in 

communities impacted by a disaster. 

A grantee may request a waiver of 

section 104(d) one-for-one replacement 

requirement and its regulations at 

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

104(d)(3) of the HCDA and 24 CFR 

42.375. To request a waiver, a grantee 

must submit a good cause justification 

that includes a data-driven analysis that 

indicates that there is an adequate 

supply of vacant lower-income dwelling 

units in standard condition that will be 

available to meet the housing needs of 

LMI owners and tenants in the MID 

areas or surrounding communities in 

alignment with the requirement to 

affirmatively further fair housing. 

III.B.15.e. Lump sum rental assistance 

payments for residential tenants. The 

requirements of 42 U.S.C. 3537(c) are 

waived to the extent necessary to permit 

a grantee to make lump-sum relocation 

rental assistance payments to displaced 

residential tenants. Waiving this 

requirement allows grantees to provide 

lump sum rental assistance payments to 

displaced residential tenants, thereby 

reducing grantees’ administrative 

burden of disbursing installment 

payments, in addition to accelerating 

the availability of the rental assistance, 

to displaced disaster survivors. 

III.B.15.f. 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), as it may be amended, 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. 

III.B.15.g. 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 under the Uniform 

Relocation Assistance and Real Property 

Acquisition Policies Act of 1970 . . . 

shall be denied such eligibility as a 

result of [their] being unable, because of 

a major disaster as determined by the 

President, to meet the occupancy 

requirements set by such Act.’’ 

Accordingly, homeowner occupants and 

tenants displaced from their homes as a 

result of the identified disasters who 

would have otherwise not have 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 undertaken 

by a grantee or subrecipient for a CDBG– 

DR funded project commencing more 

than one year after the date of the latest 

applicable Presidentially declared 

disaster, 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 RROF 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). 

This 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 


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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. Notwithstanding the 

flexibility provided by this waiver, 

grantees are encouraged to carefully 

assess housing needs and provide 

programmatic relocation assistance or 

other benefits to eligible homeowner 

occupants and tenants displaced by the 

disaster that may not have returned to 

their dwellings or found another place 

of permanent residence one year after 

the disaster. 

This waiver does not apply 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. 

III.B.16. DOB. CDBG–DR grants are 

one of multiple Federal sources that 

assist disaster recovery. These Federal 

funding sources are often made 

available for the same purposes to 

grantees and disaster survivors. For this 

reason, the Robert T. Stafford Disaster 

Relief and Emergency Assistance Act 

(42 U.S.C. 5121–5207) (Stafford Act) 

and CDBG–DR appropriations acts 

require HUD and its grantees to 

coordinate with other Federal agencies 

that provide disaster assistance to 

prevent the DOB. The Stafford Act’s 

prohibition on DOB aims to ensure that 

Federal assistance serves only to 

‘‘supplement insurance and other forms 

of disaster assistance’’ (42 U.S.C. 5170). 

CDBG–DR grantees must prevent DOB 

when carrying out eligible activities. A 

duplication occurs when a person, 

household, business, or other entity 

receives disaster assistance from 

multiple sources for the same recovery 

purpose, and the total assistance 

received for that purpose is more than 

the total need. Total assistance can 

include cash awards; insurance 

proceeds; grants and loans, including 

awards under local, State, or Federal 

programs; and assistance from private or 

nonprofit charity organizations. The 

amount of the DOB is the amount 

received in excess of the total need for 

the same purpose. When total need for 

eligible activities is more than total 

assistance for the same purpose, the 

difference between these amounts is an 

‘‘unmet need.’’ Grantees must limit their 

assistance to unmet needs for eligible 

activities to prevent a DOB. 

Additionally, when reimbursement is 

permitted, unmet needs can include 

amounts needed for reimbursement. 

Grantees must follow the detailed DOB 

requirements listed in Appendix C. 

III.B.17. Citizen complaints. The 

grantee will provide a timely written 

response to every citizen complaint. The 

grantee response must be provided 

within 15 calendar 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.C. State Grantee Only Requirements 

III.C.1. 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 dollarfor-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.C.2. 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 area-wide 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 low- and 

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 recovery, planningonly 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 that States may fund 

or undertake are expanded to be 

consistent with those of CDBG 

Entitlement grantees identified at 24 

CFR 570.205. 

III.C.3. 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 Universal 

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 Universal 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 procured 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), 

(h) and (l), and subparagraph II.A.1.d. of 

the Universal 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 and coordinate with the Indian Tribe 

with jurisdiction over the Tribal area to 

carry out or to fund CDBG–DR projects 

in the Tribal area. 

III.C.4. 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 CDBG metropolitan cities and 

urban counties and Indian Tribes. When 

a State distributes funds through a 

method of distribution or by other 

means, the requirements applying to 


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State grantees may apply to the grant 

funds unless otherwise amended by the 

Universal Notice, or by subrecipient 

agreements. 

III.C.5. Use of subrecipients (state 

grantees only). Section III.C.3. 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 

section II.A.1.(b) of the Universal 

Notice. When 24 CFR 570.503 applies, 

notwithstanding 24 CFR 

570.503(b)(5)(i), local governments that 

are subrecipients are defined as 

recipients under 24 CFR part 58 and are 

therefore responsible entities that 

assume environmental review 

responsibilities. 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 as 

stated in 24 CFR 58.18. 

III.C.6. 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 and HUD OIG of the 

State’s administration of CDBG–DR 

funds, under 24 CFR 570.493 and 

reviews and audits by the State as 

described in section III.C.8. below. 

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. 

III.C.7. 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.C.8. 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 (42 U.S.C. 

5304(e)(2), as amended, and as modified 

by the Universal 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.C.9. 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 

consult with all disaster-affected local 

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

any public housing authorities in 

determining the use of funds. This 

approach ensures that a State grantee 

will assess the recovery needs of all 

areas affected by the disaster. 

Requirements related to consultation for 

all CDBG–DR grantees are described in 

detail in sections I.C.2.a. and III.A.6. of 

the Universal Notice. 

III.D. Waivers and Alternative 

Requirements Related to Eligible 

Activities 

This section provides an overview of 

the waivers and alternative 

requirements HUD has established for 

CDBG–DR grant funds as it relates to 

eligible activities listed at 24 CFR 

570.201 and section 105(a) of the HCDA. 

Projects funded with CDBG–DR must be 

classified as an eligible activity either 

through the program regulations cited in 

the previous sentence or through a 

waiver and alternative requirement 

issued in the Universal Notice or 

applicable AAN. 

III.D.1. Connection to the disaster. 

CDBG–DR funds are provided for 

necessary expenses for activities 

authorized under title I of the HCDA 

related to disaster relief, long-term 

recovery, restoration of infrastructure 

and housing, economic revitalization, 

and mitigation of risk associated with 

activities carried out for these purposes, 

in the ‘‘most impacted and distressed’’ 

(MID) 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 (i.e., tieback to the disaster). Accordingly, each 

activity must: (1) address a direct or 

indirect impact from the disaster in a 

MID area; (2) be a CDBG-eligible activity 

(or be eligible under a waiver or 

alternative requirement); and (3) meet a 

national objective. This is true for all 

activities except for mitigation activities 

funded by an additional mitigation setaside in the appropriations acts that do 

not require a connection to the 

qualifying major disaster as described 

below in section III.D.1.a. Requirements 

for the use of these mitigation set aside 

funds are covered in section III.D.4. 

III.D.1.a. 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 

unmet needs assessment in the Action 

Plan (requirements for the assessment 

are addressed in section I.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 predisaster 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). 

III.D.2. MID areas. Funds must be 

used for costs related to unmet needs in 


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the MID areas resulting from qualifying 

disasters. HUD allocates funds using the 

best available data that covers the 

eligible affected areas and identifies 

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 AAN. Grantees can request 

that an additional area(s) be classified as 

a HUD-identified MID area by 

contacting their assigned HUD staff 

member. To be eligible, the area(s) must 

have received a presidential major 

disaster declaration identified by the 

disaster numbers listed in the applicable 

AAN. Grantees must submit the request 

with a data-driven analysis that 

illustrates the basis for designating the 

additional area(s) as most impacted and 

distressed as a result of the qualifying 

disaster. An additional area(s) being 

classified as a HUD-identified MID area 

would only result in a substantial 

amendment to the grantees’ Action Plan, 

if it was not already included as a 

grantee-identified MID area (see section 

I.C.1.g.). 

Grantees may use up to five percent 

of the total grant award for grant 

administration and up to 15 percent of 

the total grant award for planning costs. 

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 HUDidentified MID area requirement, only 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(ies), 

borough(s), parish(es), municipo/ 

municipios, or equivalent jurisdictions 

that overlap with the HUD designated 

ZIP code. A grantee must indicate the 

decision to expand eligibility in its 

action plan. 

Grantee expenditures for eligible 

unmet needs outside of the HUDidentified 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 HUDidentified or grantee-identified MID area 

(e.g., upstream water retention projects 

to reduce downstream flooding in the 

HUD-identified MID area). 

III.D.3. Mitigation measures. 

Additionally, HUD is adopting the 

following alternative requirement to 

section 105(a) of the HCDA (42 U.S.C. 

5305(a)): Grantees may carry out the 

activities described in section 105(a) of 

the HCDA, as modified by waivers and 

alternative requirements, to the extent 

that the activities comply with the 

following: 

Grantees must incorporate mitigation 

measures when carrying out activities to 

construct, reconstruct, or rehabilitate 

residential or non-residential buildings 

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 a changing 

climate. 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 life of the project. For all 

mitigation measures adopted, grantees 

must report resilience performance 

measures available in DRGR. For 

example, when building or 

reconstructing homes in a floodplain, a 

grantee must follow HUD’s elevation 

requirements and will report the 

number of structures to be elevated as 

a performance measure in DRGR. 

III.D.4. Mitigation activities—CDBG– 

DR mitigation set-aside. Unlike recovery 

activities where grantees must 

demonstrate that their activities ‘‘tieback’’ to the specific disaster and 

address a specific unmet recovery need 

for which the CDBG–DR funds were 

appropriated, activities funded by 

additional mitigation funds 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 additional 

mitigation funds 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. For purposes of grants subject 

to the Universal 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. 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 additional mitigation funds. 

Grantees may also meet the 

requirement of the additional mitigation 

funds 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. In 

section III.D.3., grantees are instructed 

to incorporate mitigation measures 

when carrying out activities to 

construct, reconstruct, or rehabilitate 

residential or non-residential buildings. 

If grantees wish to count those activities 

towards the grantee’s additional 

mitigation funds, 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. 

III.D.4.a. Alignment with mitigation 

plans. Grantees must ensure that 

activities funded with the CDBG–DR 

mitigation set-aside 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 or long-term recovery 

plans. 

III.D.5. Housing activities and 

standards. 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. Note, CDBG–DR 

does not have a requirement of ‘‘proof 

of ownership’’ when grantees are 

carrying out housing recovery programs. 

Any decisions about requiring 

applicants to submit proof of ownership 

is up to the grantee and its chosen 

program design. However, grantees may 

choose to obtain documentation to 

protect the CDBG–DR investment. In 

doing so, grantees must include in their 

program-specific policies and 

procedures alternative methods for 

documenting ownership. While grantees 

have flexibility on what type of 

documentation they will require to 


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1780 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

21 View Institute for Business and Home Safety 

(IBHS) FORTIFIED programs here: https://fortified

home.org/fortified-multifamily/ or https://fortified

home.org/about/. 

22 View 2021 Wildland Urban Interface (WUI) 

code here: https://planningforhazards.com/ 

wildland-urban-interface-code-wui-code. 

23 View NFPA Firewise USA here: https://

www.nfpa.org/education-and-research/wildfire/ 

firewise-usa. 

24 View HUD’s CPD Green Building Retrofit 

Checklist here: https://www.hud.gov/sites/dfiles/ 

CPD/documents/CPD-Green-Building-RetrofitChecklist.pdf. 

prove ownership, HUD strongly 

recommends that grantees consider the 

following documentation options in 

their required policies and procedures: 

deed, title, mortgage documentation, tax 

receipts or bills, home insurance, home 

purchase contracts, will or affidavit or 

heirship naming them as heir, receipts 

of major repairs completed prior to the 

disaster, court documents, letter from a 

manufactured housing community 

owner or public official, selfcertification, or utility bills. 

As grantees consider different eligible 

housing activities, States and local 

governments are encouraged to adopt 

the latest edition or editions of the 

International Residential Code (IRC) for 

single family new construction and 

International Building Code (IBC) for 

multi-family construction, and 

respective subcodes (e.g., plumbing, 

electrical, fire). HUD encourages 

grantees to adopt the recent edition or 

editions of the International Existing 

Building Code (IEBC) when using 

CDBG–DR funds for rehabilitation. If a 

grantee chooses to adopt these codes, 

HUD encourages the adoption without 

the removal of any provisions. Grantees 

can find required building and energy 

standards in section III.D.5.b.(i). 

The following waivers and alternative 

requirements will assist grantees in 

addressing the full range of unmet 

housing needs arising from a disaster. 

III.D.5.a. New housing construction 

waiver. 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 funds 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). 

III.D.5.b. Standards for new 

construction, reconstruction, and 

rehabilitation. HUD is adopting an 

alternative requirement to require 

grantees to adhere to the applicable 

standards in III.D.5.b.(i). through 

III.D.5.b.(ii) when carrying out activities 

to construct, reconstruct, or rehabilitate 

residential buildings. For purposes of 

the Universal Notice, the terms 

‘‘substantial damage’’ and ‘‘substantial 

improvement’’ shall be as defined in 44 

CFR 59.1. 

III.D.5.b.(i). Standards for new 

construction and reconstruction of 

residential buildings. Grantees must 

meet at least one Green and Resilient 

Building Standard and at least one 

minimum energy efficiency 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. 

As described in 44 CFR 59.1, substantial 

damage means damage of any origin 

sustained by a structure whereby the 

cost of restoring the structure to its 

before damaged condition would equal 

or exceed 50 percent of the market value 

of the structure before the damage 

occurred. 

(1) The Green and Resilient Building 

Standard requires that all construction 

covered by the paragraph above also 

meet an industry-recognized standard or 

rating system 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) International Living Future 

Institute, Living Building Challenge; 

(v) Greenpoint Rated New Home, 

Greenpoint Rated Existing Home (Whole 

House or Whole Building label); 

(vi) Earth Advantage New Homes; 

(vii) IBHS FORTIFIED Home (Roof, 

Silver, Gold); IBHS FORTIFIED 

Commercial (Roof, Silver, Gold); IBHS 

FORTIFIED Multifamily (Roof, Silver, 

Gold); 21

(viii) NFPA 1140, Standard for 

Wildland Fire Protection; 

(ix) 2024 Wildland Urban Interface 

(WUI) Code; 22

(x) NFPA Firewise USA; 23 or 

(xi) Any other equivalent 

comprehensive green and/or resilient 

building standard acceptable to HUD. 

(2) The minimum energy efficiency 

standard, as defined by the IECC as 

referenced by the building code, 

requires that all construction covered by 

the paragraph above achieve 

certification under one of the following 

programs: 

(i) EPA ENERGY STAR® V 3.2 or 

ENERGY STAR® NextGen certification 

or ENERGY STAR (Certified Homes or 

Multifamily High-Rise High 

Performance); 

(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 (1) Green 

and Resilient Building Standards and 

(2) minimum energy standard 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 (i.e., grantees 

may allow the use of any of the 

specified standards either at the 

discretion of the grantee or the builderdeveloper as long as it is documented in 

the project file). 

III.D.5.b.(ii). Standards for 

rehabilitation of non-substantially 

damaged residential buildings. For 

rehabilitation other than the 

rehabilitation of substantially damaged 

residential buildings, grantees must 

follow the HUD CPD Green Building 

Retrofit Checklist guidelines as posted 

and updated on HUD’s website.24

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 STAR-labeled, 

WaterSense-labeled, or Federal Energy 

Management Program (FEMP)- 

designated products or appliances. 

III.D.5.c. Broadband infrastructure or 

technology to support housing. Any 

substantial rehabilitation, as defined by 

24 CFR 5.100, reconstruction, or new 

construction of a building with five or 

more rental units must include 

installation of broadband infrastructure 

or technology, except where the grantee 

documents that: (i) the location of the 

new construction or substantial 


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rehabilitation makes installation of 

broadband infeasible; (ii) the cost of 

installing broadband 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 infeasible. 

III.D.5.d. Periods of affordability for 

new construction of affordable rental 

housing. To meet the low- and 

moderate-income housing national 

objective, rental housing assisted with 

CDBG–DR funds must be rented to LMI 

households at affordable rents. Because 

the waiver and alternative requirement 

in III.D.5.a. 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), a 

grantee must define in its programspecific policies and procedures the 

affordability standards, including 

‘‘affordable rents,’’ the enforcement 

mechanisms, and applicable 

timeframes, that will apply to the new 

construction of affordable rental 

housing. The minimum timeframe and 

other related requirements acceptable 

for compliance with this alternative 

requirement are the HOME Investment 

Partnerships Program (HOME) 

requirements. Specifically, the 

affordability requirements must last for 

20 years and must: 

(i) Apply without regard to the term 

of any loan or mortgage, repayment of 

the CDBG–DR investment, or the 

transfer of ownership; 

(ii) Must be imposed by a deed 

restriction, a covenant running with the 

land, an agreement restricting the use of 

the property, or other mechanisms 

approved by HUD and must give the 

grantee or recipient the right to require 

specific performance (except that the 

grantee may provide that the 

affordability restrictions may terminate 

upon foreclosure or transfer in lieu of 

foreclosure); and 

(iii) Must be recorded in accordance 

with State recordation laws. 

III.D.5.e. Homeownership assistance. 

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: 

(i) subsidize interest rates and 

mortgage principal amounts for 

homebuyers with incomes at or below 

120 percent of area median income; 

(ii) finance the acquisition of housing 

by homebuyers with incomes at or 

below 120 percent of area median 

income that is occupied by the 

homebuyers; 

(iii) 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; 

(iv) provide up to 100 percent of any 

down payment required from 

homebuyers with incomes at or below 

120 percent of area median income; or 

(v) 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. 

III.D.5.f. 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 allow 

grantees to extend interim mortgage 

assistance (IMA) to qualified 

individuals from three months to up to 

20 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. This public 

services activity shall be exempt from 

the cap on public service expenditures 

found in section 105(a)(8) of the HCDA 

(42 U.S.C. 5305(a)(8)), as amended. 

III.D.5.g. Rental 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 allow 

grantees to provide rental assistance 

(e.g., rent, security deposits, and utility 

deposits) and utility payments for up to 

24 months. This rental assistance can 

only be used in conjunction with the 

development of affordable rental 

housing or other forms of housing 

assistance, such as rehabilitation, 

reconstruction, new construction of 

affordable housing, and homeownership 

assistance, for persons displaced by the 

qualifying disaster. 

This public service activity shall be 

exempt from the cap on public service 

expenditures found in section 105(a)(8) 

of the HCDA (42 U.S.C. 5305(a)(8)), as 

amended. If, despite concerted efforts to 

permanently rehouse survivors, a 

grantee identifies the need for continued 

rental assistance, a grantee may submit 

a request to HUD to extend the 24- 

month limit on rental assistance. Such 

a request should include a justification 

for the continued need for rental 

assistance and how the extension will 

enable the grantee to stabilize persons or 

households in permanent housing. HUD 

may provide this extension 

administratively upon a determination 

that good cause for such an extension 

exists. A homeowner receiving any form 

of interim mortgage assistance is not 

eligible for CDBG–DR rental assistance 

or utility payments for the same period. 

Grantees must determine that the 

rental assistance and utility payments 

are needed because the household 

moved from their primary residence due 

to rehabilitation or reconstruction to 

repair damage from a qualified disaster 

or because the household is 

experiencing or is at risk of 

experiencing homelessness and the 

assistance is part of a homelessness 

prevention or rapid rehousing program 

or activity. While this waiver and 

alternative requirement will allow these 

grantees to provide rental assistance and 

utility payments to households 

impacted by a qualifying major disaster, 

this does not relieve grantees of the duty 

to comply with other applicable 

requirements relating to the temporary 

relocation or permanent displacement of 

persons. If a person meets the definition 

of a ‘‘displaced person’’ under the URA, 

(42 U.S.C. 4601 et seq.) or section 104(d) 

of the HCDA (42 U.S.C. 5304(d)) 

(‘‘section 104(d)’’) and their 

implementing regulations, grantees 

must provide the displaced person with 

any relocation assistance to which they 

are entitled under law, including but 

not limited to assistance authorized 

under the URA or section 104(d) and 


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their implementing regulations, as those 

requirements may be modified by 

applicable current or future waivers and 

alternative requirements. 

III.D.5.h. Disaster relief assistance for 

LMI persons. HUD is providing an 

alternative requirement to extend the 

period that grantees can make disaster 

relief payments on behalf of individuals 

and families impacted by a disaster 

event. Normally, CDBG funds may not 

be used for income payments, which are 

not included among eligible activities in 

section 105(a) of the HCDA for States, 

and which are expressly prohibited by 

24 CFR 570.207(b)(4) in the Entitlement 

CDBG regulations. The phrase ‘‘income 

payments’’ means a series of subsistence 

type grant payments made to an 

individual or family for items such as 

food, clothing, housing (rent or 

mortgage), or utilities, but excludes 

disaster relief payments made over a 

period of up to three consecutive 

months to the provider of such items or 

services on behalf of an individual or 

family. 

Because disasters qualifying for 

CDBG–DR awards represent the worst 

levels of destruction and hardship, 

those recovering often struggle to 

maintain employment, make rent or 

mortgage payments, access or pay for 

food, clothing, and basic utilities, and 

access many other essential items and 

services while also trying to fully 

recover from the disaster months and 

years after the event. To allow grantees 

to help individuals and families address 

these challenges, HUD is waiving 42 

U.S.C. 5305(a) only to the extent 

necessary to establish the following 

alternative requirement: 

CDBG–DR funds may be used to 

provide disaster relief assistance for 

low- and moderate-income persons only 

for items such as food, clothing, housing 

(rent or mortgage), utilities or medical 

care related to the qualifying disaster for 

a period of up to six consecutive 

months. To be eligible, the beneficiary 

must use all Federal assistance for 

losses suffered as a result of the major 

disaster that qualified for CDBG–DR 

assistance. Disaster relief payments 

must be made to the provider of such 

items or services on behalf of an 

individual or family, and not directly to 

an individual or family in the form of 

income payments, debit cards, or 

similar direct income payments. 

Grantees must maintain 

documentation, at least at a 

programmatic level, describing how the 

grantee determined the amount of 

assistance for the disaster relief payment 

was necessary and reasonable, proof of 

the DOB analysis as outlined in 

Appendix C, how the payment meets a 

national objective, and that the 

payments are in accordance with the 

grantee’s approved Action Plan and 

published program design(s). This 

public service activity shall be subject to 

the cap on public service expenditures 

found in section 105(a)(8) of the HCDA 

(42 U.S.C. 5305(a)(8)), as amended. A 

homeowner receiving any form of IMA 

as described in section III.D.5.f., is not 

eligible for CDBG–DR disaster relief 

assistance to cover their mortgage or 

utilities for the same period and anyone 

receiving rental assistance is not eligible 

for CDBG–DR disaster relief assistance 

to cover their rent or utilities for the 

same period. 

III.D.5.i. Buyouts. 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 voluntary 

buyouts. The term ‘‘buyouts’’ for CDBG– 

DR purposes means the voluntary 

acquisition of properties located in a 

floodway, FFRMS floodplain, or other 

Disaster Risk Reduction Area that is 

intended to reduce risk from future 

hazards. Requiring buyouts to be 

voluntary acquisitions will focus the 

buyout activities on areas where 

relocation plans are community driven. 

Grantees may 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 open space 

management plan or equivalent 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 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 (III.D.5.i.(i). below). The 

key factor in determining whether the 

acquisition is a buyout is whether the 

intent of the purchase is to reduce the 

risk of property damage from future 

flooding or other hazards in a floodway, 

FFRMS floodplain, or a Disaster Risk 

Reduction Area. A grantee that will 

acquire property for purposes of a 

buyout 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 or address the current and 

future risks as identified in the grantee’s 

mitigation needs assessment; 

(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, National 

Risk Index, 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. 

III.D.5.i.(i). Buyout requirements: 

1. Property to be acquired or accepted 

must be located within a floodway, 

FFRMS floodplain, or Disaster Risk 

Reduction Area. 

2. 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. 

3. 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: 

(i) the structure does not reduce 

valley storage, increase erosive 

velocities, or increase flood heights on 

the opposite bank, upstream, or 

downstream; and 

(ii) the local floodplain manager 

approves the structure, in writing, 

before commencement of construction 

of the structure. 


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4. 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 (2) 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. 

5. 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. 

6. 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. However, a 

grantee may provide exceptions to its 

established valuation method on a caseby-case basis (e.g., if the grantee 

determines the post-disaster value of a 

property is higher than the pre-disaster 

value). 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. 

7. All buyout activities must be 

classified using the ‘‘buyout’’ activity 

type in the DRGR system. 

8. Any State grantee implementing a 

buyout program or activity must consult 

with local or Tribal governments within 

the areas in which buyouts will occur. 

9. All buyouts must be voluntary. 

Grantees are prohibited from using 

eminent domain to buyout properties. 

However, a grantee may request and 

HUD may approve a waiver of this 

limitation, if good cause for such a 

waiver exists. 

III.D.5.i.(ii). National objectives for 

buyouts. Activities that assist LMI 

persons and meet the criteria for the 

national objectives 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.B.1. 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 

the 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 buildings 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 building. Therefore, 

acquisition-only buyout programs 

cannot satisfy the LMH national 

objective criteria. 

To meet a national objective that 

benefits a LMI person, buyout programs 

may 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 III.B.10.a. of the Universal 

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 

exclusively to 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 

III.D.5.i.(i)(6).). 

III.D.5.j. Safe housing incentives. 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 

defined as 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, 

the respective implementing 

regulations, or the requirements 

described in the Universal Notice. The 

grantee may offer safe housing 

incentives in addition to the relocation 

assistance that is legally required. 

Grantees will want to consider how 

these efforts to incentivize households 

to relocate outside disaster prone areas 

tie-back to their strategies to minimize 

displacement across all their disaster 

recovery activities as required in section 

III.A.2.b. 

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 

III.D.5.l. 

III.D.5.j.(i). National objectives for safe 

housing incentives. The following 

alternative requirement establishes the 

new LMI national objective criteria for 

low- and moderate-income safe housing 

incentive (LMHI) which applies when 

safe housing incentive activities 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. 


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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 a LMHI 

national objective, the incentive must be 

structured in one of the following ways: 

1. Be 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 

2. Be for the purpose of providing or 

improving residential buildings that, 

upon completion, will be occupied by a 

qualifying LMI household and will be in 

a lower risk area; or 

3. Be for the purpose of providing 

rent, security deposits, and utility 

deposits for a qualifying LMI tenantoccupant household, including those 

displaced, to live in a lower risk area. 

Alternatively, safe housing incentives 

may also meet the urgent need national 

objective when incentive activities are 

designed to meet the criteria outlined in 

section III.B.2. of the Universal Notice. 

III.D.5.k. Redevelopment of acquired 

properties. Although properties 

acquired through a buyout program 

cannot be redeveloped, grantees may 

redevelop other acquired properties. For 

non-buyout acquisitions, HUD has not 

previously permitted the grantee to base 

acquisition cost on pre-disaster 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 Universal 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 in section III.B.15.b., to 

the owner of a property that will be 

redeveloped if: i.) the property is 

purchased by the grantee or 

subrecipient through voluntary 

acquisition; and ii.) 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. Grantees are 

also reminded that the acquisition of 

second homes at post-disaster fair 

market value is not prohibited, as long 

as the home is being redeveloped 

through an eligible activity and will 

meet a national objective. 

III.D.5.l. Alternative requirement for 

housing rehabilitation and buyout— 

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 (when that buyout is at postdisaster fair market value), however, as 

indicated in section III.D.5.j. above, no 

safe housing incentives can be provided 

for second homes. A second home is 

defined for purposes of the Universal 

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. 

Additionally, acquisition or buyouts of 

second homes at post-disaster fair 

market value is not prohibited, as 

described in section III.D.5.k. 

III.D.6. Infrastructure activities and 

standards. As grantees consider 

different eligible infrastructure activities 

including public facilities, States and 

local governments are encouraged to 

adopt the recent edition or editions of 

IBC for public facility construction, 

particularly when using the CDBG–DR 

funds as the non-Federal match in 

FEMA PA projects. 

HUD requires grantees to adhere to 

the applicable standards and 

requirements in this section, sections 

III.B.10.f. and III.D.6.e., which apply 

only to those eligible activities 

described in those paragraphs. 

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 a changing climate. To 

satisfy this requirement, the grantee 

must identify and implement resilience 

performance measures as described in 

section III.D.3. 

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 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 (Permitting 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), or 

another section of the HCDA (42 U.S.C. 

5305(a)(2), 5305(a)(4), 5305(a)(14)), or 

pursuant to a waiver or alternative 

requirement established by HUD. 

Required policies and procedures 

related to infrastructure activities are 

found in section III.A.4. of the Universal 

Notice. 

III.D.6.a. Privately owned shelters. 

Section 105(a)(2) of the HCDA allows 

CDBG funds to be used for acquiring, 

constructing, reconstructing, 

rehabilitating, or installing public 

improvements or facilities. Typically, 

eligible facilities are limited to those 

that are: (i) publicly owned or 

traditionally provided by the 

government, or (ii) owned by a nonprofit organization, and (iii) open to the 

general public. However, restricting 

ownership to these categories can limit 

disaster survivors’ access to shelters, 

especially when public shelters are at 

capacity. To address this challenge and 

increase the supply of emergency 

shelters, the Department finds good 

cause to waive the ownership 

requirements outlined in Section 

105(a)(2) of the HCDA and 24 CFR 

570.200(b). This waiver allows 

assistance to be provided to qualified 

privately owned facilities used as 

shelters. Under this waiver and 

alternative requirement, grantees must 

fund facilities that would be consistent 

with the purpose of title I of the HCDA 

and are prohibited from assisting 

casinos, sports arenas, or concert 

venues. 

III.D.6.b. Assistance to buildings for 

the general conduct of government 

when using CDBG–DR funds as the nonFederal match. The prohibition on 


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assisting buildings for the general 

conduct of government at 42 U.S.C. 

5305(a)(2) and associated regulations at 

24 CFR 570.207(a) are waived for nonFederal match. This waiver allows 

grantees to use CDBG–DR funds as the 

non-Federal match on any other Federal 

program providing funds for the 

construction, reconstruction, and 

rehabilitation of public improvements 

or facilities for the general conduct of 

government. This waiver is subject to 

the following alternative requirements: 

grantees are prohibited from using 

CDBG–DR funds for buildings that do 

not provide services all year around and 

for buildings that are used exclusively 

as emergency operations centers. 

III.D.6.c. FAST–41 project 

requirements. The Permitting Council 

administers Title 41 of the Fixing 

America’s Surface Transportation Act, 

referred to as ‘‘FAST–41,’’ which 

establishes a new governance structure, 

set of procedures, and funding 

authorities to improve and make 

transparent the Federal review and 

permitting process for FAST–41 covered 

infrastructure projects on the Federal 

Infrastructure Permitting Dashboard. A 

FAST–41 covered project must first be 

in one of the following sectors: (1) 

Renewable energy production, (2) 

Conventional energy production, (3) 

Electricity transmission, (4) Surface 

transportation, (5) Aviation, (6) Ports 

and waterways, (7) Water resource 

projects, (8) Broadband, (9) Pipelines, 

(10) Manufacturing, (11) Mining, (12) 

Carbon capture, (13) Semiconductors, 

(14) Artificial intelligence and machine 

learning, (15) High-performance 

computing and advanced computer 

hardware and software, (16) Quantum 

information science and technology, 

(17) Data storage and data management, 

(18) Cybersecurity, and/or (19) any 

additional infrastructure sectors 

established by Permitting Council. 

In addition, a FAST–41 project must 

meet one of the following four criteria, 

as amended: (1) Objective Criteria: A 

project must be subject to the NEPA; be 

likely to require a total investment of 

more than $200,000,000; and not qualify 

for an abbreviated authorization or 

environmental review process under 

any applicable law. (2) Discretionary 

Criteria: A project must be subject to 

NEPA; and the project is of a size and 

complexity that make it, in the opinion 

of the Permitting Council, likely to 

benefit from enhanced oversight and 

coordination, including (but not limited 

to) a project likely to require 

authorization from or environmental 

review involving more than two Federal 

agencies or the preparation of an 

environmental impact statement (EIS) 

under NEPA. (3) Tribal Sponsored 

Criteria: A project must be subject to 

NEPA; sponsored by an Indian Tribe, an 

Alaska Native Corporation, a Native 

Hawaiian, the Department of Hawaiian 

Homelands, or the Office of Hawaiian 

Affairs; and located on land owned or 

under jurisdiction of the entity that 

sponsors the activity. (4) Carbon 

Capture Sector: A project that includes 

any facility, technology, or system that 

captures, utilizes, or sequesters carbon 

dioxide emissions, including projects 

for direct air capture, and carbon 

dioxide pipelines; is covered by a 

programmatic plan or environmental 

review developed for the primary 

purpose of facilitating development of 

carbon dioxide pipelines; and is not 

subject to NEPA requirements. 

Any project with the potential for 

FAST–41 eligibility will require the 

grantee to notify HUD and coordinate 

efforts to submit a FAST–41 Initiation 

Notice (FIN) to the Permitting Council 

Executive Director and the appropriate 

facilitating agencies. Within 14 calendar 

days of the FIN receipt, the Permitting 

Council Executive Director will 

determine the eligibility and if the 

FAST–41 process will be required for 

the project. 

III.D.6.d. CDBG–DR funds as nonFederal match. As provided by the 

HCDA, CDBG–DR 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 (e.g., 

programs or activities administered by 

FEMA, USACE, United States 

Department of Agriculture (USDA), and 

the Federal Highway Administration 

(FHWA)). 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 cost-share 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 PA Program, as authorized 

pursuant to Section 428 of the Stafford 

Act (42 U.S.C. 5189(f)). Like other 

projects, grantees may use CDBG–DR 

funds as a matching requirement, share, 

or contribution for Section 428 PA 

Projects. For all activities funding the 

non-Federal match, 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–DR 

requirements. 

III.D.6.d.(i). Alternative requirement 

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

project (building codes and standards). 

Currently, CDBG–DR grantees using 

FEMA and CDBG–DR funds on the same 

activity have encountered challenges in 

certain circumstances in reconciling 

CDBG–DR building standards with 

those established by FEMA. 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 building standards may not be 

feasible. For these reasons, the Secretary 

finds good cause to establish an 

alternative requirement to allow 

grantees to use FEMA-approved 

building codes instead of the 

requirements in section III.D.5.b.(i). 

when CDBG–DR funds are used as the 

non-Federal match for FEMA assistance. 

III.D.6.e. Flood control structure 

requirements. 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. In 

addition, a grantee must comply with 

the requirements outlined above in 

section III.D.6.c. if the project meets one 

of the following four criteria for FAST– 

41 projects, as amended. 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’s PL 84–99 

Rehabilitation Program (Levee 

Rehabilitation and Inspection Program); 

(3) ensure the structure is accredited 

under the FEMA National Flood 

Insurance Program (NFIP); (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. 

III.D.6.f. LMI benefit for infrastructure 

activities. CDBG–DR funds represent a 

significant opportunity for grantees to 

carry out strategic, high-impact, and 


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innovative infrastructure activities to 

recover from the applicable disaster, 

mitigate disaster risks, and reduce 

future losses. Infrastructure activities 

assist in the development of physical 

assets that are designed to provide or 

support services to the general public. 

These infrastructure activities often 

offer unique benefits for the general 

public and underserved communities 

following a disaster due to the activities’ 

scale and intersection with other key 

recovery and mitigation outcomes. For 

example, an infrastructure activity 

located alongside an underserved 

community that repairs damaged 

roadways connected to the community 

may facilitate the redevelopment of 

housing and expedite economic 

recovery by making the underserved 

community accessible and more 

attractive to local businesses. 

The far-reaching nature of 

infrastructure activities’ service areas 

presents challenges for meeting the lowand moderate-income area benefit 

(LMA) national objective criteria at 24 

CFR 570.208(a)(1) and 24 CFR 

570.483(b)(1). Large infrastructure 

activities with a broad service area may 

benefit a large population of LMI 

persons, but because the area that 

benefits is so large the LMI population 

may be less than 51 percent. When this 

is the case, a grantee may not pursue the 

implementation of those innovative 

infrastructure activities that would 

otherwise have positive, compounding 

effects on underserved communities and 

LMI persons in the MID areas because 

the activity would not meet the standard 

LMA national objective criteria. Since 

grantees’ infrastructure needs and 

investments may represent a significant 

portion of their total CDBG–DR 

allocations, grantees may not be able to 

meet the 70 percent overall benefit 

requirement if their infrastructure 

activities can only meet the urgent need 

national objective. 

Based on these reasons, HUD is 

waiving 24 CFR 570.484 and 24 CFR 

570.200(a)(3) only to the extent 

necessary to add this alternative 

requirement: CDBG–DR grantees 

funding infrastructure projects may 

count funds expended for infrastructure 

activities towards benefitting LMI 

persons and meeting the overall benefit 

requirement by multiplying the total 

cost (including CDBG–DR and nonCDBG–DR costs) of the infrastructure 

activity by the percent of LMI persons 

in the service area, except that the 

amount counted shall not exceed the 

amount of CDBG–DR funds provided. 

As an example, if the total cost of an 

infrastructure activity is $1,000,000, and 

the percent of LMI persons in the 

activity’s service area is 40 percent, then 

$400,000 would count towards 

benefiting LMI persons when 

calculating a grantee’s overall benefit 

(assuming this projects is only funded 

with CDBG–DR). Generally, grantees 

should not pursue this alternative 

requirement if doing so comes at the 

expense of pursuing an infrastructure 

project that can meet the original LMA 

national objective criteria and thus be 

counted towards the overall benefit 

requirement. 

III.D.6.g. Assistance to private 

utilities. A CDBG–DR grantee may assist 

utilities as part of a disaster-related 

eligible activity under section 105(a) of 

the HCDA of 1974 (42 U.S.C. 5305(a)). 

While it is possible that not every 

CDBG–DR assisted utility will serve 

predominantly 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. Accordingly, HUD is adding 

alternative requirements that include 

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. 

HUD is imposing the following 

alternative requirements: 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 any 

applicable underwriting requirements. 

(2) Each grantee must carry out the 

grant consistent with the grantee’s 

certification that: ‘‘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 moderateincome 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. 

(4) The grantee must establish policies 

and procedures to ensure that the 

CDBG–DR funds that assist private, forprofit 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. 

III.D.7. Economic revitalization and 

Section 3 activities and standards. 

CDBG–DR funds may be used for 

CDBG–DR eligible activities related to 

economic revitalization. The attraction, 

retention, and return of businesses and 

jobs to a disaster-impacted 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 (42 U.S.C. 5305(a)(14), (15), and 

(17). 

III.D.7.a. Economic revitalization 

assistance. Climate-related natural 

hazards, extreme events, and natural 

disasters disproportionately affect LMI 

persons 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 


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25 View 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–MIT, NSP, Section 108, and RHP 

projects,’’ as amended here https://www.hud.gov/ 

sites/dfiles/OCHCO/documents/2021-09cpdn.pdf. 

26 View the underwriting guidelines are found at 

Appendix A of 24 CFR part 570 here: https://

www.ecfr.gov/current/title-24/part-570/appendixAppendix A to Part 570. 

imposing the following 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 (42 U.S.C. 5305(a)(14), (15), 

and (17)), HUD is instituting an 

alternative requirement in addition to 

the other requirements in these 

provisions to require grantees to 

prioritize assistance to disasterimpacted businesses that serve 

underserved communities and spur 

economic opportunity for underserved 

communities that were economically 

distressed before the disaster. Grantees 

undertaking an economic revitalization 

activity must maintain supporting 

documentation to demonstrate how the 

grantee prioritized underserved 

communities. In section I.C.1.c., HUD 

describes the minimum standard for 

underserved communities. Grantees 

may further define areas that are 

considered ‘‘underserved communities’’ 

either in the Action Plan or programspecific policies and procedures. 

III.D.7.b. 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 

grantees to meet the LMI jobs national 

objective criteria 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 HUD-established income 

limit for a two-person family. This 

method offers an optional alternative to 

the standard CDBG–DR 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). 

This optional 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. 

III.D.7.c. 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 

development activities support 

economic revitalization. Currently, 

public benefit standards limit the 

amount of assistance per job retained or 

created, or the amount of 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 optional 

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. 

III.D.7.d. 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 25 All direct recipients of CDBG– 

DR funding must report Section 3 

information through the DRGR system. 

III.D.7.e. Business relocation 

assistance. Current 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. 

III.D.7.f. Underwriting. 

Notwithstanding section 105(e)(1) of the 

HCDA (U.S.C. 5305(e)(1)), 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 (U.S.C. 5305(a)(17)) unless such 

project has been evaluated and selected 

in accordance with guidelines 

developed by HUD pursuant to section 

105(e)(2) of the HCDA (U.S.C. 

5305(e)(2)) for evaluating and selecting 

economic development projects. 

Grantees and their subrecipients are 

required to comply with the 

underwriting guidelines in Appendix A 

of 24 CFR part 570 26 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 (U.S.C. 

5305(a)(17)). 

III.D.7.g. 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, or a waiver has been 

provided. For purposes of this 

paragraph, public use does not include 

economic development that primarily 

benefits private entities or CDBG–DR 

funded buyouts. The following is 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 


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27 View HUD’s Policy Bulletin provides 

additional guidance for grantees that request an 

extension to the period of performance here: 

https://www.hud.gov/sites/dfiles/CPD/documents/ 

Policy-Bulletin-Periods-of-Performance-2023-09-14- 

Final.pdf. 

Relief and Brownfields Revitalization 

Act (Pub. L. 107–118). HUD has also 

determined that the development of 

housing for LMI persons is a public use 

for the purposes of eminent domain. 

III.E. Ineligible Activities in CDBG–DR 

Any activity that is not authorized 

under Section 105(a) of the HCDA (24 

U.S.C. 5305(a)) is ineligible to be 

assisted with CDBG–DR funds, unless 

explicitly allowed by waiver and 

alternative requirement in the Universal 

Notice. Additionally, the uses described 

below are explicitly prohibited: 

1. CDBG–DR funds cannot be used as 

compensation to beneficiaries (see 

section III.E.1.). 

2. CDBG–DR funds cannot be used to 

force homeowners to pay off their 

remaining mortgage (see section III.E.2.). 

III.E.1. Prohibition on compensation. 

Grantees may not use CDBG–DR funds 

to provide compensation to 

beneficiaries meaning that funds may 

not be provided to a beneficiary based 

on the estimated amount of loss from 

the declared disaster. However, grantees 

may reimburse disaster-impacted 

beneficiaries based on the preapplication costs incurred by the 

beneficiary for completing an activity 

that is eligible for reimbursement. 

Reimbursement of beneficiaries for 

eligible activity costs are subject to the 

requirements established in section 

III.B.14.a. 

III.E.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 

non-CDBG 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 DOB for the purpose of 

housing rehabilitation or reconstruction. 

III.F. Performance Reviews 

Under 42 U.S.C. 5304(e), 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 (i.e., 

meeting its expenditure deadline), 

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. 

III.F.1. Timely distribution and 

expenditure of funds. HUD waives the 

provisions at 24 CFR 570.494 and 24 

CFR 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 is provided by the grantee 

and approved by HUD.27 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. 

III.F.2. 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 

Universal 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: 

III.F.2.a. 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 

24 CFR part 570, subpart I. In response 

to a deficiency, HUD may issue a 

warning letter followed by a 

recommended corrective action 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. 

III.F.2.b. 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 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. 

III.G. Grantee Reporting Requirements 

in the Disaster Recovery Grant 

Reporting (DRGR) System 

The DRGR System is used to support 

HUDs oversight of grantees throughout 

the lifecycle of the grant through grantee 

submission of the public action plan, 

DRGR Action Plan, grantee reporting 

requirements, and drawing grant funds. 

III.G.1. Submitting the DRGR Action 

Plan. The DRGR Action Plan is 

populated after the submission of both 

the optional Admin Action Plan and the 

required Action Plan (the submission 

process will be described in the 

applicable AAN). Both the Admin 

Action Plan and Action Plan are defined 

in section I.A. The DRGR Action Plan is 

the process a grantee undergoes to set 

up its detailed projects and activities 

within the DRGR system for HUD to 

track progress and compliance 

throughout the grant lifecycle and to 

facilitate the draw of CDBG–DR funds. 

III.G.2. Grantee reporting 

requirements in DRGR. HUD 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 


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that are due each fiscal year under 24 

CFR 1003.506(a). Alternatively, HUD 

establishes an alternative requirement 

that grantees enter information in the 

DRGR system on a quarterly basis, 

which is referred to as a performance 

report within the DRGR system 

(commonly referred to as the quarterly 

performance report (QPR)). Performance 

reports must be submitted on a quarterly 

basis until all funds have been 

expended and the grantee has reported 

on accomplishments and submitted all 

required materials for closeout. Once a 

grant is closed, grantees will shift to 

annual reporting as described in section 

III.B.12.e.(3). 

III.G.2.a. Maintain grantee records 

within DRGR. The information in the 

DRGR system 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. Grantees 

must use the DRGR system to: 

i. Enter projects into the DRGR Action 

Plan at a level of detail sufficient to 

allow HUD to determine grantee 

compliance: (1) appropriate activity 

type, (2) national objective, and (3) 

responsible entity; 

ii. Document grantee’s oversight of its 

disaster recovery projects through 

project level reporting (e.g., summary 

information on grantees’ monitoring 

visits and reports, audits, technical 

assistance); 

iii. For direct benefit activities only, 

enter summary data on completed 

applications for assistance and the 

number of beneficiaries assisted for each 

activity each quarter in total and for the 

following subcategories: (1) persons 

with disabilities, (2) age, (3) familial 

status, (4) LEP persons, (5) LMI persons, 

(6) race, and (7) ethnicity; and 

iv. If applicable, track program 

income receipts, disbursements, 

revolving loan funds, and leveraged 

funds. 

III.G.2.b. Timeline for submitting 

grantee’s initial performance report. The 

grantee’s first performance report is due 

30 calendar days after the first full 

calendar quarter after HUD signs the 

grant agreement. 

III.G.2.c. Quarterly submission of 

performance report in DRGR. Grantees 

must submit a performance report 

through the DRGR system no later than 

30 calendar days following the end of 

each calendar quarter. To submit a 

performance report, the DRGR Action 

Plan must be in ‘‘Reviewed and 

Approved’’ status in the DRGR system. 

Therefore, a grantee must submit any 

amendments (substantial or 

nonsubstantial) to the DRGR Action 

Plan at least 45 calendar days prior to 

the performance report deadline (i.e., 

QPR deadline). For all activities, the 

address of each CDBG–DR assisted 

property must be recorded in the 

performance report. Once the grantee 

submits the performance report into 

DRGR, they should email their assigned 

HUD CPD staff member to confirm 

submission. HUD will review the 

submitted performance report with the 

HUD Performance Report Review Guide. 

III.G.2.c.(i). Reviewed and approved 

performance report. Once the assigned 

HUD CPD staff member approves the 

performance report, the grantee must 

publish a version of the performance 

report that omits PII on the grantee’s 

official disaster recovery website within 

three calendar days of HUD’s approval. 

III.G.2.c.(ii). Rejected performance 

report. If the grantee’s assigned HUD 

CPD staff member identifies errors or 

gaps through the HUD Performance 

Report Review Guide, HUD may reject 

the performance review and indicate the 

areas that need to be corrected. The 

grantee must make the revisions within 

30 calendar days and resubmit the 

performance review in DRGR. If the 

assigned HUD CPD staff member finds 

the updated performance review to be 

satisfactory, the grantee must publish a 

version of the performance review that 

omits PII reported in the performance 

review, as approved by HUD, within 

three calendar days of HUD approval. If 

a satisfactory performance report is not 

submitted in 30 calendar days, HUD 

may block access to CDBG–DR funds 

until a satisfactory performance 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 performance 

report. 

III.G.3. Using DRGR to draw grant 

funds. After the grantee’s DRGR Action 

Plan is approved, the grantee can create 

and approve vouchers, also called 

drawdowns in DRGR at the activity 

level. DRGR is directly linked to the 

Line of Credit Control System (LOCCS), 

a Federal web-based system 

administered by the U.S. Treasury that 

allows grantees to request and receive 

funds obligated by HUD under a grant 

agreement as permitted by 2 CFR part 

200, subpart E. 

IV. Assistance Listing Numbers 

The Assistance Listing Numbers 

(formerly known as the Catalog of 

Federal Domestic Assistance (CFDA) 

numbers) for the disaster recovery 

grants under the Universal Notice are as 

follows: 14.218; 14.228. 

V. 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 and for public 

inspection between 8 a.m. and 5 p.m. 

weekdays in the Regulations Division, 

Office of General Counsel, Department 

of Housing and Urban Development, 

451 7th Street SW, Room 10276, 

Washington, DC, 20410–0500. Due to 

security measures at the HUD 

Headquarters building, an advance 

appointment to review the docket file 

must be scheduled by calling the 

Regulations Division at 202–708–3055 

(this is not a toll-free number). 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 R. Todman, 

Deputy Secretary Performing the Duties of 

the Secretary of HUD. 

Appendix A. Certifications Waiver and 

Alternative Requirement for Admin 

Action Plan Submission 

Each grantee choosing to submit an Admin 

Action Plan must complete the certifications 

listed within this appendix and submit it 

with the Admin Action Plan. 

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 alternative 

requirement in section I.B.5. 

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, as amended 

(‘‘the Uniform Act’’) (42 U.S.C. 4630), section 

305 of the Uniform Act (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 for program 

administrative costs before submitting other 

statutorily required certifications. Each 

grantee receiving an allocation under an 

AAN must make the following certifications 

with its Admin Action Plan: 


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a. Compliance with Anti-discrimination 

Laws—The grantee certifies 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. 

b. Affirmatively Further Fair Housing: The 

grantee certifies that it will affirmatively 

further fair housing. 

c. Anti-Lobbying: The grantee certifies its 

compliance with the restrictions on lobbying 

required by 24 CFR part 87, together with 

disclosure forms, if required by part 87. 

d. Authority of Grantee: The grantee 

certifies that the Admin 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. 

e. Consistency with the Action Plan: The 

grantee certifies that activities to be 

undertaken with CDBG–DR funds are 

consistent with its Admin Action Plan. 

f. Citizen Participation: 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). 

g. Use of Funds: The grantee certifies that 

it is complying with each of the following 

criteria: 

(1) Purpose of the Funds. 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 Stafford Act (42 U.S.C. 5121 et seq.). 

(2) Maximum Feasibility Priority. With 

respect to activities expected to be assisted 

with CDBG–DR funds, the Admin Action 

Plan has been developed so as to give the 

maximum feasible priority to activities that 

will benefit low- and moderate-income 

families. 

(3) Overall benefit. The aggregate use of 

CDBG–DR funds shall principally benefit 

low- and moderate-income 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) Special Assessment. 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) the 

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). 

h. Excessive Force: 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. 

i. Grant Timeliness: 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. 

j. Environmental Requirements: The 

grantee certifies that it will comply with 

environmental requirements at 24 CFR part 

55 (as applicable) and 24 CFR part 58. 

k. Compliance with Laws: The grantee 

certifies that it will comply with the 

provisions of title I of the HCDA and with 

other applicable laws. 

Appendix B. Certifications Waiver and 

Alternative Requirement for Action 

Plan Submission. 

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 receiving an 

allocation under an AAN must make the 

following certifications with its action plan: 

a. Compliance with Anti-discrimination 

Laws—The grantee certifies 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. 

b. Affirmatively Further Fair Housing—The 

grantee certifies it will affirmatively further 

fair housing. 

c. Uniform Relocation Act and Residential 

Anti-displacement and Relocation Plan—The 

grantee certifies that it: 

(1) will comply with the acquisition and 

relocation requirements of the Uniform Act, 

and implementing regulations at 49 CFR part 

24, as such requirements may be modified by 

waivers or alternative requirements; 

(2) has in effect and is following a 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. 

d. Anti-Lobbying—The grantee certifies its 

compliance with the restrictions on lobbying 

required by 24 CFR part 87, together with 

disclosure forms, if required by part 87. 

e. Authority of Grantee—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. 

f. Consistency with the Action Plan—The 

grantee certifies that activities to be 

undertaken with CDBG–DR funds are 

consistent with its action plan. 

g. Section 3—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. 

h. Citizen Participation—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). 

i. Consultation with Local Governments 

(STATE ONLY)—State grantee certifies that it 

has consulted with all disaster-affected local 

governments (including any CDBG 

entitlement 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. 

j. Use of Funds—The grantee certifies that 

it is complying with each of the following 

criteria: 

(1) Purpose of the funding. 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 Stafford Act (42 U.S.C. 5121 et seq.). 

(2) Maximum Feasibility Priority. 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) Overall benefit. The aggregate use of 

CDBG–DR funds shall principally benefit 

low- and moderate-income families in a 

manner that ensures that at least 70 percent 


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(or another percentage permitted by HUD in 

a waiver) of the grant amount is expended for 

activities that benefit such persons. 

(4) Special Assessment. 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). 

k. Excessive Force—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. Grant Timeliness—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. Lead-Based Paint—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. 

n. Environmental Requirements—The 

grantee certifies that it will comply with 

environmental requirements at 24 CFR part 

55 (as applicable) and 24 CFR part 58. 

o. Compliance with Laws—The grantee 

certifies that it will comply with the 

provisions of title I of the HCDA and with 

other applicable laws. 

p. Order of Assistance—The grantee 

certifies that it will comply with the statutory 

order of assistance listed in Appendix C 

paragraph 9 and will verify if FEMA or 

USACE funds are available for an activity, or 

the costs are reimbursable by FEMA or 

USACE before awarding CDBG–DR assistance 

for the costs of carrying out the same activity. 

Appendix C. Duplication of Benefits 

(DOB) 

Appendix C Outline 

1. Introduction. 

2. The Stafford Act. 

3. CDBG–DR Appropriations Acts and 

Federal Register Notices. 

4. Basic DOB calculation framework. 

4.a. Assess applicant’s total need. 

4.b. Identify total assistance. 

4.c. Exclude non-duplicative amounts. 

4.c.(i). Funds for a different purpose. 

4.c.(ii). Funds for the same purpose, 

different allowable use. 

4.d. Identify DOB amount and calculate 

the CDBG–DR award. 

4.e. Reassess unmet need when necessary. 

5. Necessary and reasonable requirements. 

6. Special considerations. 

7. Subsidized loans. 

8. Exceptions when subsidized loans are not 

a duplication. 

8.a. Short-term subsidized loans for preaward costs incurred by grantees or 

subrecipients that are later reimbursed 

with CDBG–DR. 

8.b. Declined or cancelled subsidized 

loans. 

9. Order of assistance. 

10. Multiple disasters. 

11. DOB recordkeeping. 

12. Agreement to repay. 

13. Collecting a duplication. 

13.a. Not in the best interest of the Federal 

government to collect. 

Appendix C. Duplication of Benefits (DOB) 

1. Introduction. CDBG–DR grants are one of 

multiple Federal sources which assist 

disaster recovery. These sources of Federal 

assistance often can be used for the same 

purposes by grantees and disaster survivors. 

For this reason, the Stafford Act (42 U.S.C. 

5121–5207) and CDBG–DR appropriations 

acts require HUD and its grantees to 

coordinate with other Federal agencies that 

provide disaster assistance to prevent the 

DOB. The Stafford Act’s prohibition on DOB 

aims to ensure that Federal assistance serves 

only to ‘‘supplement insurance and other 

forms of disaster assistance’’ (42 U.S.C. 

5170). 

CDBG–DR grantees must prevent DOB 

when carrying out eligible activities. A 

duplication occurs when a person, 

household, business, or other entity receives 

disaster assistance from multiple sources for 

the same recovery purpose, and the total 

assistance received for that purpose is more 

than the total need. The amount of the DOB 

is the amount received in excess of the total 

need for the same purpose. When the total 

need for eligible activities is more than total 

assistance for the same purpose, the 

difference between these amounts is an 

‘‘unmet need.’’ Grantees must limit the 

awarding of CDBG–DR assistance to unmet 

needs for eligible activities to prevent a DOB. 

Because the Universal Notice permits 

reimbursement, as described in section 

III.B.14., unmet needs can include amounts 

needed for reimbursement. 

2. The Stafford Act. The 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)). Therefore, 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 

DOB analysis. 

3. CDBG–DR Appropriations Acts and 

Federal Register Notices. CDBG–DR funds 

are made available for ‘‘necessary expenses’’ 

by appropriations acts that contain statutory 

requirements on the use of the grant funds. 

Grantees are subject to the requirements of 

the appropriations acts, the applicable AAN, 

and the Universal Notice. 

4. Basic DOB calculation framework. The 

Stafford Act requires a fact specific inquiry 

into assistance received by each applicant. 

The Universal 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 (i.e., a 

DOB analysis) for 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 the Universal 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 the 

standards identified here in Appendix C. and 

section II.A.1.e. of the Universal Notice. 

4.a. Assess applicant’s total need. A 

grantee must determine an applicant’s total 

need. A grantee’s DOB analysis must reflect 

the applicant’s current need (i.e., total need) 

at the time the grantee is conducting the DOB 


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analysis and calculating the amount of 

CDBG–DR assistance the applicant is eligible 

to receive. 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 

program-specific 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 III.D.7.f.). CDBG– 

DR grantees and subrecipients must comply 

with the underwriting guidelines in 

Appendix A of 24 CFR part 570 when 

assisting a for-profit 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 conducts an applicant’s DOB 

analysis and makes the CDBG–DR award. Inkind donations are non-cash contributions, 

such as donations of professional services, 

use of construction equipment, or 

contributions of building materials. In-kind 

donations are not ‘‘financial assistance’’ that 

creates a DOB under the Stafford Act, but 

they can reduce the applicant’s total need by 

reducing projected CDBG–DR activity costs. 

When applicable, grantees must determine 

the value of any in-kind donations that 

would reduce the CDBG–DR activity costs 

and adjust the applicant’s total need 

accordingly. 

4.b. Identify total assistance. To calculate 

DOB, grantees are required to identify ‘‘total 

assistance.’’ For the Universal 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 

subsidized 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 can reduce the total need when 

known to the grantee), and private loans. 

For the Universal 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 analyses, 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 are 

considered financial assistance unless an 

exception applies (see paragraph 8.a. or 8.b.). 

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; 

(2) has received the assistance and has legal 

control over it, or (3) anticipates receiving 

assistance that has been awarded and 

accepted, but has not received it yet. 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 the 

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 DOB 

analysis when identifying total assistance. 

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 disasteraffected homeowner chooses to apply 

insurance proceeds received for damage to 

the building to reduce an unpaid mortgage 

principal, these insurance proceeds are 

considered available assistance to the 

applicant and may reduce the amount of 

CDBG–DR funds the grantee can provide for 

rehabilitation. 

4.c. Exclude non-duplicative amounts. 

Once a grantee has determined the total need 

and the total assistance, the grantee then 

determines if it must exclude nonduplicative amounts of financial assistance 

(known as ‘‘exclusions’’) from the applicant’s 

total assistance to calculate the DOB amount. 

Grantees must exclude amounts that are: (1) 

provided for a different purpose than the 

CDBG–DR assistance; or (2) provided for the 

same purpose as the CDBG–DR assistance, 

but for a different, allowable use (cost). The 

‘‘purpose’’ of the assistance is the purpose for 

which the funds were provided by the entity 

that offered the financial assistance. Below, 

each of these categories is explained in 

greater detail. 

4.c.(i). Funds for a different purpose. Any 

assistance provided for a different purpose 

than the CDBG–DR assistance (i.e., the 

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

recovery’’) must be excluded from the total 

assistance when calculating the DOB amount. 

Insurance proceeds for damage or 

destruction of a building are funds 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 proceeds 

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 assistance if it is impractical to 

identify the portion of insurance proceeds 

that 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. 


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4.c.(ii). Funds for the same purpose, 

different allowable use. Assistance provided 

for the same purpose as the CDBG–DR 

assistance (i.e., the CDBG–DR eligible 

activity) must be excluded when calculating 

the DOB amount if the applicant can 

document that the actual specific use of the 

assistance was allowable and for a different 

use (cost) than the CDBG–DR assistance. For 

example, an applicant uses financial 

assistance provided for housing 

rehabilitation to replace the roof and the 

CDBG–DR assistance is used to rehabilitate 

the house’s interior. The financial assistance 

to replace the roof can be excluded from the 

DOB analyses as funds for a ‘‘different 

allowable use’’ even though the CDBG–DR 

assistance is provided for the same purpose 

(rehabilitation). 

When excluding this type of nonduplicative assistance, grantees must identify 

and document the purpose of the assistance 

for which the funds were provided and how 

the funds were used by the applicant. 

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 

the grantee can document that 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 (e.g., a different allowable 

use) as non-duplicative of the CDBG–DR 

assistance for rehabilitation. 

If, on the other hand, the grantee has 

documentation that 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 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 are funds 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). 

Assistance provided for temporary or 

minor rehabilitation are funds for the same 

purpose as CDBG–DR rehabilitation 

assistance but may or may not constitute a 

DOB. If the assistance is used for minor or 

temporary rehabilitation to enable the 

applicant to live in their home instead of 

moving to temporary housing until 

rehabilitation can be completed, the grantee 

can undertake the remaining work necessary 

to complete rehabilitation. Further, 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. 

4.d. Identify DOB amount and calculate 

the CDBG–DR award. The total DOB amount 

(i.e., the duplicative assistance) is calculated 

by subtracting the exclusions from the 

applicant’s total assistance. Therefore, to 

calculate the maximum CDBG–DR award 

amount, the grantee must: (1) identify total 

need; (2) identify total assistance; (3) subtract 

exclusions from total assistance to determine 

the DOB amount; and (4) subtract the DOB 

amount from the applicant’s total need to 

determine the maximum CDBG–DR award 

amount, which is normally equivalent to the 

applicant’s unmet need. 

Note, there are several considerations that 

may change the maximum CDBG–DR award 

amount. 

First, the grantee is required to impose an 

award cap that limits the amount of 

assistance an applicant is eligible to receive, 

this 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 section 

III.D. and here in Appendix C paragraph 9). 

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. 

4.e. Reassess unmet need when necessary. 

Long-term disaster recovery is a process, and 

applicants’ recovery needs can change over 

time. An applicant’s total need is calculated 

based on need estimates at a point in time 

and often represents the applicant’s need at 

the time the DOB analysis is conducted by 

the grantee. As a result, a subsequent change 

in an applicant’s circumstances can affect the 

applicant’s total need and lead to additional 

unmet need or needs that were not met by 

CDBG–DR and other sources of assistance. 

Oftentimes, additional 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 assistance. 

To the extent that the applicant’s total 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 needs, for 

example, by completing a professional 

inspection to verify the revised estimate of 

costs to rehabilitate or reconstruct damaged 

property. 

5. 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. 

6. 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: 

a. Assistance to businesses. Many grantees 

carry out economic revitalization programs 

that provide working capital assistance to 


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28 View HUD’s closeout instructions for CDBG 

Programs, as may be amended, for additional 

guidance related to recordkeeping requirements 

published in CPD–22–14 here: https://

www.hud.gov/sites/dfiles/OCHCO/documents/ 

2022-14cpdn.pdf. 

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. 

b. 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). 

c. Payments made under the Uniform Act. 

A displaced person (as defined under 49 CFR 

24.2(a) is eligible for rental assistance 

payments under the Uniform Act. 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 the Universal 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 Uniform Act or as part of 

a FEMA Individual Assistance Award). 

Please note that while CDBG–DR funds 

cannot duplicate other assistance for the 

same purpose, advisory services and the 

provision of notices required under the 

Uniform Act are not subject to this analysis 

because they are not financial assistance to 

the person, and therefore must be provided 

in accordance with the Uniform Act. 

7. Subsidized Loans. For the Universal 

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. Paragraph 8 discusses 

these exceptions and related requirements for 

the treatment of subsidized loans in a DOB 

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 paragraph 8 

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. 

Subsidized loans are financial assistance 

and therefore can duplicate financial 

assistance provided from another source 

unless an exception in paragraph 8 applies. 

8. Exceptions when subsidized loans are 

not a duplication. When an exception 

described in 8.a. or 8.b. applies, 

documentation required by those paragraphs 

must be maintained by the grantee.28

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. 

8.a. Short-term subsidized loans for preaward costs incurred by grantees or 

subrecipients that are 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 shortterm loan (e.g., bridge loans) to pay for 

eligible costs before CDBG–DR funds became 

available (e.g., 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. 

8.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. 

(1) 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. 

(2) 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. 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. 

9. 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 may 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 


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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. As 

such, any CDBG–DR assistance that 

duplicates another source must be collected 

by the grantee. The mandatory agreement to 

repay (discussed in paragraph 12 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 agreement will give the 

grantee the ability to collect the DOB. 

10. 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. Additionally, if a second 

disaster strikes and destroys an applicant’s 

paperwork, the grantee may make a 

determination to accept a self-certification 

regarding how the applicant used the other 

assistance. 

11. DOB recordkeeping. The grantee must 

document compliance with DOB 

requirements. Policies and procedures for 

DOB must 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. 

When documenting its DOB analysis, 

grantees cannot rely on self-certification from 

the applicant alone for proof of other sources 

of funds for the same purpose (unless 

authorized by the Universal Notice, see 

paragraph 10 above). Any self-certification by 

an applicant must be based on supporting 

evidence that will be kept available for 

inspection by HUD and oversight agency 

such as HUD Office of Inspector General 

(HUD OIG). For example, if an applicant selfcertifies 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 

assigned HUD CPD staff member with 

questions about the sufficiency of 

documentation. 

12. 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. 

As described in this section, 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 II.A.1. of the 

Universal 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 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.’’ 

13. Collecting a DOB. 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 4.e. 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, 24 CFR 

570.910, and Federal Register notices, as 

applicable. However, as described above in 

paragraph 9, a grantee that does not collect 

duplicative CDBG–DR assistance that it 

provides may resolve this noncompliance by 

reimbursing its program account with nonFederal 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. 

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 a DOB does not remove an 

applicant’s potential liability to the United 

States. 

13.a. Not in the best interest of the Federal 

government to collect. Section 312(c) of the 

Stafford Act states that ‘‘the agency which 

provided the duplicative assistance shall 

collect it from the recipient . . . when the 

head of such agency considers it to be in the 

best interest of the Federal government’’ 42 

U.S.C. 5155(c). There are extraordinary 

situations where the Secretary may 

determine that collecting a DOB is not in the 

best interest of the Federal government. For 

grants subject to the Universal Notice, HUD 

is establishing these specific circumstances 

as situations when collection is not 

necessary. HUD’s secretary has determined 

that it is not in the best interest of the Federal 

government to collect a DOB in the following 

circumstances: 

(1). The duplicative assistance was 

received by low- and moderate-income 

beneficiaries that, after the receipt of the 

CDBG–DR assistance, are: 

i. Deceased; 

ii. Subject to a foreclosure action on a 

property rehabilitated, constructed, or 

reconstructed with CDBG–DR funds; or 

iii. A debtor in a bankruptcy proceeding or 

who recently exited a bankruptcy proceeding 

(or similar proceeding for insolvent debtors 

under State law, such as an assignment for 

the benefit of creditors). 

Additionally, the grantee may refer to any 

relevant guidance or the debt collection 


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procedures in place for the State or local 

government. HUD is available to provide 

guidance to grantees in establishing or 

revising the grantee’s DOB policies and 

procedures. 

Appendix D. Detailed Table of Contents 

to the Universal Notice 

Preamble 

Community Development Block Grant 

Disaster Recovery Universal Notice: Waivers 

and Alternative Requirements (The 

‘‘Universal Notice’’) 

I. Phase One: The Action Plan. 

I.A. CDBG–DR Action Plans Defined. 

I.B. Admin Action Plan. 

I.B.1. Developing the Admin Action Plan. 

I.B.2. Submission and publication of the 

Admin Action Plan. 

I.B.3. Entering administrative activities into 

DRGR. 

I.B.4. Applicability of the Admin Action 

Plan. 

I.B.5. Admin Action Plan certifications 

waiver and alternative requirement. 

I.C. Action Plan. 

I.C.1. Developing the Action Plan. 

I.C.1.a. Unmet needs assessment. 

I.C.1.a.(i). Unmet needs in the MID areas. 

I.C.1.a.(ii). Unmet needs requirements. 

I.C.1.b. Mitigation needs assessment. 

I.C.1.c. Fair housing and civil rights 

assessment. 

I.C.1.c.(i). Fair housing and civil rights laws 

and terminology defined. 

I.C.1.c.(ii). Fair housing and civil rights 

data collection. 

I.C.1.d. Connection of proposed programs 

and projects to unmet needs, mitigation 

needs, and fair housing and civil rights 

assessments. 

I.C.1.e. Allocation and award caps. 

I.C.1.e.(i). Prioritization for allocations less 

than $20 million. 

I.C.1.f. Funding criteria. 

I.C.1.g. Protocols for substantial 

amendments. 

I.C.2. Citizen participation requirements. 

I.C.2.a. Consultation during Action Plan 

preparation. 

I.C.2.b. Public comment period and 

minimum public hearing requirement. 

I.C.2.c. Consideration of public comments. 

I.C.3. Submission of the Action Plan. 

I.C.4. Action Plan certifications waiver and 

alternative requirement. 

I.C.5. HUD Action Plan review process. 

I.C.5.a. General HUD review of an Action 

Plan. 

I.C.5.b. Standard of review of an Action 

Plan. 

I.C.5.c. Written notice of return of an 

Action Plan. 

I.C.5.d. Written notice of disapproval of an 

Action Plan. 

I.C.5.e. Revisions and resubmission of an 

Action Plan. 

I.C.6. Amendments to the Action Plan. 

I.C.6.a. Substantial amendment. 

I.C.6.a.(i). General HUD review of a 

substantial amendment to an Action 

Plan. 

I.C.6.a.(ii). Standard of review of a 

substantial amendment to an Action 

Plan. 

I.C.6.a.(iii). Revisions and resubmission of 

a substantial amendment to an Action 

Plan. 

I.C.6.b. Nonsubstantial amendment. 

II. Phase Two: Financial Certification and 

Oversight of Funds. 

II.A. Certification of Adequate Financial 

Controls and Procurement Processes, and 

Procedures for Proper Grant 

Management. 

II.A.1. Documentation requirements. 

II.A.1.a. Proficient financial management 

controls. 

II.A.1.b. Procedures for procurement. 

II.A.1.c. Policies and procedures to 

maintain a comprehensive disaster 

recovery website. 

II.A.1.d. Procedures to detect and prevent 

fraud, waste, and abuse. 

II.A.1.e. Policies and procedures to prevent 

DOB. 

II.A.1.f. Policies and procedures for timely 

expenditures of grant funds. 

II.A.1.g. Capacity assessment and staffing 

analysis. 

II.A.1.g.(i). Capacity assessment. 

II.A.1.g.(ii). Staffing analysis. 

II.B. Relying on Prior Financial 

Certification Submissions. 

II.C. Obligation and Expenditure of Funds. 

III. Phase Three: Implementation of Universal 

Notice Requirements. 

III.A. Policies and Procedures—Universal 

Notice Requirements. 

III.A.1. Development of program-specific 

policies and procedures. 

III.A.2. Required policies and procedures 

for all CDBG–DR funded programs. 

III.A.2.a. Fair housing and civil rights 

policies and procedures. 

III.A.2.b. Minimizing displacement and 

relocation policies and procedures. 

III.A.2.c. Mitigation policies and 

procedures. 

III.A.2.d. Timeliness policies and 

procedures. 

III.A.3. Required policies and procedures 

for housing programs. 

III.A.4. Required policies and procedures 

for infrastructure programs. 

III.A.5. Required policies and procedures 

for economic revitalization programs. 

III.A.6. Consultation and website 

requirements for program 

implementation policies. 

III.A.6.a. Consultation with citizen advisory 

groups. 

III.A.6.b. Publication of program-specific 

policies and procedures. 

III.A.7. HUD program-specific policies and 

procedures review process. 

III.B. Grant Administration 

III.B.1. Overall benefit. 

III.B.1.a. Use of the ‘‘upper quartile’’ or 

‘‘exception criteria. 

III.B.1.b. Clarification of the use of 

‘‘uncapped’’ income limits. 

III.B.2. Use of the urgent need national 

objective. 

III.B.3. Grant administration cap. 

III.B.3.a. Use of funds for administrative 

costs across multiple grants. 

III.B.4. Planning cap. 

III.B.5. Public service cap. 

III.B.6. Consolidated Plan. 

III.B.7. Procurement. 

III.B.8. Public disaster recovery website. 

III.B.8.a. Publication and accessibility of 

documents. 

III.B.9. Application status. 

III.B.10. Environmental requirements. 

II.B.10.a. Process for environmental release 

of funds when a State carries out 

activities directly. 

III.B.10.b. Responsibilities of States 

assuming HUD environmental 

responsibilities. 

III.B.10.c. Adoption of another agency’s 

environmental review under the Stafford 

Act. 

III.B.10.d. Historic preservation reviews. 

III.B.10.e. Tiered environmental reviews. 

III.B.10.f. FFRMS floodplain and elevation. 

III.B.11. Flood insurance requirements. 

III.B.11.a. Flood insurance purchase 

requirements. 

III.B.11.b. Federal assistance to owners 

remaining in a floodplain. 

III.B.11.b.(i) Prohibition on flood disaster 

assistance for failure to obtain and 

maintain flood insurance. 

III.B.11.b.(ii) Prohibition on flood disaster 

assistance for households above 120 

percent of AMI for failure to obtain flood 

insurance. 

III.B.11.b.(iii) Responsibility to inform 

property owners to obtain and maintain 

flood insurance. 

III.B.12. Program income. 

III.B.12.a. Definition of program income. 

III.B.12.b. Program income-does not 

include. 

III.B.12.c. Recording program income. 

III.B.12.d. Retention of program income. 

III.B.12.e. Program income—use, close out, 

and transfer. 

III.B.13. Revolving funds. 

III.B.14. Reimbursement of disaster 

recovery expenses. 

III.B.14.a. Reimbursement of pre-award 

costs by a grantee or subrecipient. 

III.B.14.b. Reimbursement of preapplication costs of homeowners, 

renters, businesses, and other qualifying 

entities. 

III.B.15. URA, Section 104(d), and related 

CDBG program requirements. 

III.B.15.a. Section 104(d) RARAP. 

III.B.15.b. Optional relocation. 

III.B.15.c. Section 104(d) relocation 

assistance. 

III.B.15.d. One-for-one replacement 

requirement. 

III.B.15.e. Lump sum rental assistance 

payments for residential tenants. 

III.B.15.f. Voluntary acquisition— 

homebuyer primary residence purchase. 

III.B.15.g. Waiver of Section 414 of the 

Stafford Act. 

III.B.16. DOB. 

III.B.17. Citizen complaints. 

III.C. State Grantee Only Requirements. 

III.C.1. Combined technical assistance and 

administrative cap (state grantees only). 

III.C.2. Planning-only activities (state 

grantees only). 

III.C.3. Direct grant administration and 

means of carrying out eligible activities 

(state grantees only). 

III.C.4. Waiver and alternative requirement 

for distribution to CDBG metropolitan 

cities and urban counties (state grantees 

only). 


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Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1797 

III.C.5. Use of subrecipients (state grantees 

only). 

III.C.6. Recordkeeping (state grantees only). 

III.C.7. Change of use of real property (state 

grantees only). 

III.C.8. Responsibility for review and 

handling of noncompliance (state 

grantees only). 

III.C.9. Consultation (state grantees only). 

III.D. Waivers and Alternative 

Requirements Related to Eligible 

Activities. 

III.D.1. Connection to the disaster. 

III.D.1.a. Documenting a connection to the 

disaster. 

III.D.2. MID areas. 

III.D.3. Mitigation measures. 

III.D.4. Mitigation activities—CDBG–DR 

mitigation set-aside. 

III.D.4.a. Alignment with mitigation plans. 

III.D.5. Housing activities and standards. 

III.D.5.a. New housing construction waiver. 

III.D.5.b. Standards for new construction, 

reconstruction, and rehabilitation. 

III.D.5.b.(i). Standards for new construction 

and reconstruction of residential 

buildings. 

III.D.5.b.(ii). Standards for rehabilitation of 

non-substantially damaged residential 

buildings. 

III.D.5.c. Broadband infrastructure or 

technology to support housing. 

III.D.5.d. Periods of affordability for new 

construction of affordable rental 

housing. 

III.D.5.e. Homeownership assistance. 

III.D.5.f. Interim mortgage assistance. 

III.D.5.g. Rental assistance. 

III.D.5.h. Disaster relief assistance for LMI 

persons. 

III.D.5.i. Buyouts. 

III.D.5.i.(i). Buyout requirements: 

III.D.5.i.(ii). National objectives for 

buyouts. 

III.D.5.j. Safe housing incentives. 

III.D.5.j.(i). National objectives for safe 

housing incentives. 

III.D.5.k. Redevelopment of acquired 

properties. 

III.D.5.l. Alternative requirement for 

housing rehabilitation and buyout— 

assistance for second homes. 

III.D.6. Infrastructure activities and 

standards. 

III.D.6.a. Privately owned shelters. 

III.D.6.b. Assistance to buildings for the 

general conduct of government when 

using CDBG–DR funds as the nonFederal match. 

III.D.6.c. FAST–41 projects requirements. 

III.D.6.d. CDBG–DR funds as non-Federal 

match. 

III.D.6.d.(i). Alternative requirement when 

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

(building codes and standards). 

III.D.6.e. Flood control structure 

requirements. 

III.D.6.f. LMI benefit for infrastructure 

activities. 

III.D.6.g. Assistance to private utilities. 

III.D.7. Economic revitalization and 

Section 3 activities and standards. 

III.D.7.a. Economic revitalization 

assistance. 

III.D.7.b. National objective documentation 

for activities that support economic 

revitalization. 

III.D.7.c. Public benefit for activities that 

support economic revitalization. 

III.D.7.d. Section 3 worker eligibility and 

documentation requirements. 

III.D.7.e. Business relocation assistance. 

III.D.7.f. Underwriting. 

III.D.7.g. Limitation on use of funds for 

eminent domain. 

III.E. Ineligible Activities in CDBG–DR. 

III.E.1. Prohibition on compensation. 

III.E.2. Prohibition on forced mortgage 

payoff. 

III.F. Performance Reviews. 

III.F.1. Timely distribution and 

expenditure of funds. 

III.F.2. Review of continuing capacity. 

III.F.2.a. Corrective and remedial actions. 

III.F.2.b. Additional criteria and specific 

conditions to mitigate risk. 

III.G. Grantee Reporting Requirements in 

the Disaster Recovery Grant Reporting 

(DRGR) System. 

III.G.1. Submitting the DRGR Action Plan. 

III.G.2. Grantee reporting requirements in 

DRGR. 

III.G.2.a. Maintain grantee records within 

DRGR. 

III.G.2.b. Timeline for submitting grantee’s 

initial performance report. 

III.G.2.c. Quarterly submission of 

performance report in DRGR. 

III.G.2.c.(i). Reviewed and approved 

performance report. 

III.G.2.c.(ii). Rejected performance report. 

III.G.3. Using DRGR to draw grant funds. 

IV. Assistance Listing Numbers. 

V. Finding of No Significant Impact. 

Appendix A. Certifications Waiver and 

Alternative Requirement for Admin 

Action Plan Submission. 

Appendix B. Certifications Waiver and 

Alternative Requirement for Action Plan 

Submission. 

Appendix C. Duplication of Benefits (DOB). 

[FR Doc. 2024–31621 Filed 1–7–25; 8:45 am] 

BILLING CODE 4210–67–P 


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