58330 Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–5255–N–01] 

Notice of Allocations, Application 

Procedures, Regulatory Waivers 

Granted to and Alternative 

Requirements for Emergency 

Assistance for Redevelopment of 

Abandoned and Foreclosed Homes 

Grantees Under the Housing and 

Economic Recovery Act, 2008 

AGENCY: Office of the Secretary, HUD. 

ACTION: Notice of allocation method, 

waivers granted, alternative 

requirements applied, and statutory 

program requirements. 

SUMMARY: This notice advises the public 

of the allocation formula and allocation 

amounts, the list of grantees, alternative 

requirements, and the waivers of 

regulations granted to grantees under 

Title III of Division B of the Housing 

and Economic Recovery Act of 2008, for 

the purpose of assisting in the 

redevelopment of abandoned and 

foreclosed homes under the Emergency 

Assistance for Redevelopment of 

Abandoned and Foreclosed Homes 

heading, referred to throughout this 

notice as the Neighborhood 

Stabilization Program (NSP). As 

described in the SUPPLEMENTARY

INFORMATION section of this notice, HUD 

is authorized by statute to specify 

alternative requirements and make 

regulatory waivers for this purpose. This 

notice also notes statutory issues 

affecting program design and 

implementation. 

DATES: Effective Date: September 29, 

2008. 

FOR FURTHER INFORMATION CONTACT: 

Stanley Gimont, Director, Office of 

Block Grant Assistance, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Room 7286, 

Washington, DC 20410, telephone 

number 202–708–3587. Persons with 

hearing or speech impairments may 

access this number via TTY by calling 

the Federal Information Relay Service at 

800–877–8339. FAX inquiries may be 

sent to Mr. Gimont at 202–401–2044. 

(Except for the ‘‘800’’ number, these 

telephone numbers are not toll-free.) 

SUPPLEMENTARY INFORMATION: 

Authority To Provide Alternative 

Requirements and Grant Regulatory 

Waivers 

Title III of Division B of the Housing 

and Economic Recovery Act, 2008 

(HERA) (Pub. L. 110–289, approved July 

30, 2008) appropriates $3.92 billion for 

emergency assistance for redevelopment 

of abandoned and foreclosed homes and 

residential properties, and provides 

under a rule of construction that, unless 

HERA states otherwise, the grants are to 

be considered Community Development 

Block Grant (CDBG) funds. The grant 

program under Title III is commonly 

referred to as the Neighborhood 

Stabilization Program (NSP). When 

referring to a provision of the 

appropriations statute itself, this notice 

will refer to HERA; when referring to 

the grants, grantees, assisted activities, 

and implementation rules, this notice 

will use the term NSP. 

HERA authorizes the Secretary to 

specify alternative requirements to any 

provision under Title I of the Housing 

and Community Development Act of 

1974, as amended, (the HCD Act) except 

for requirements related to fair housing, 

nondiscrimination, labor standards, and 

the environment (including lead-based 

paint), in accordance with the terms of 

section 2301 of HERA and for the sole 

purpose of expediting the use of grant 

funds. (Current and former disaster 

recovery CDBG grantees should note 

that this authority is substantially and 

significantly more limited from that 

generally provided with disaster 

recovery CDBG supplemental 

appropriations; therefore, waivers under 

the NSP are much more limited. For 

example, HUD does not have authority 

to provide alternative requirements for 

the National Affordable Housing Act 

(NAHA) or for the Uniform Relocation 

Assistance Real Property Acquisition 

Policies Act of 1970 (URA). Unless this 

notice describes how HERA has 

superseded one of their provisions, 

these statutes will apply as in the CDBG 

program. Such regulatory relief as HUD 

deemed necessary and was authorized 

to provide under 24 CFR 5.110 and 

91.600 to permit implementation of the 

NSP is provided in this notice.) 

The Secretary finds that the following 

alternative requirements are necessary 

to expedite the use of these funds for 

their required purposes. 

Under the requirements of HERA, the 

Secretary must provide Congress written 

notice of its intent to exercise the 

authority to specify alternative 

requirements not less than 10 business 

days before such exercise of authority is 

to occur. Under the HUD Reform Act, 

regulatory waivers must be justified and 

published in the Federal Register. The 

Department is also using this notice to 

provide grantees information about 

other ways in which the requirements 

for this grant vary from regular CDBG 

program rules. Compiling this 

information in a single notice creates a 

helpful resource for grant administrators 

and HUD field staff. 

Except as described in this notice, 

statutory and regulatory provisions 

governing the CDBG program, including 

those at 24 CFR part 570 subpart I for 

states or, for CDBG entitlement 

communities, including those at 24 CFR 

part 570 subparts A, C, D, J, K, and O, 

as appropriate, shall apply to the use of 

these funds. (The State of Hawaii will be 

allocated funds and will be subject to 

part 570, subpart I, as modified by this 

notice.) Other sections of the notice will 

provide further details of the changes, 

the majority of which deal with 

adjustments necessitated by HERA 

provisions, simplifying program rules to 

expedite administration, or relate to the 

ability of state grantees to act directly 

instead of solely through distribution to 

local governments. In a separate 

guidance issuance, HUD also will 

provide a simplified ‘‘crosswalk’’ of 

NSP and State CDBG requirements for 

state grantee administrators. 

Table of Contents 

I. Allocations 

A. Formula: Allocation 

B. Formula: Reallocation 

II. Alternative Requirements and Regulatory 

Waivers 

A. Definitions for purposes of the CDBG 

Neighborhood Stabilization Program 

B. Pre-Grant Process 

1. General 

2. Contents of an NSP Action Plan 

Substantial Amendment 

3. Continued Affordability 

4. Citizen Participation Alternative 

Requirement 

5. Joint Requests 

6. Effect of Existing Cooperation 

Agreements Governing Joint Programs 

and Urban Counties 

C. Reimbursement for Pre-Award Costs 

D. Grant Conditions 

E. Income Eligibility Requirement Changes 

F. State Distribution to Entitlement 

Communities and Indian Tribes 

G. State’s Direct Action 

H. Eligibility and Allowable Costs 

I. Rehabilitation Standards 

J. Sale of Homes 

K. Acquisition and Relocation 

L. Note on Eminent Domain 

M. Timeliness of Use and Expenditure of 

NSP Funds 

N. Alternative Requirement for Program 

Income (Revenue) Generated by 

Activities Assisted With Grant Funds 

O. Reporting 

P. Note That FHA Properties Are Eligible 

for NSP Acquisition and Redevelopment 

Q. Purchase Discount 

R. Removal of Annual Requirements 

S. Affirmatively Furthering Fair Housing 

T. Certifications 

U. Note on Statutory Limitation on 

Distribution of Funds 

V. Information Collection Approval Note 

W. Duration of Funding 

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I. Allocations 

A. Formula: Allocation 

HERA provides $3.92 billion of funds 

that are generally to be construed as 

CDBG program funds for the 

communities and in the amounts listed 

in Attachment A to this notice. 

Attachment A also includes a 

description of the allocation formula 

used to determine the grant amounts, as 

required by HERA. 

B. Formula: Reallocation 

1.a. To expedite the use of NSP funds, 

the Department is specifying alternative 

requirements to 42 U.S.C. 5306(c). If a 

unit of general local government 

receiving an allocation of NSP funds 

under this notice (as designated in 

Attachment A) fails to submit a 

substantially complete application for 

its grant allocation by December 1, 2008, 

or submits an application for less than 

the total allocation amount, HUD will 

simultaneously notify the jurisdiction of 

the cancellation of all or part of its 

allocation amount and proceed to 

reallocate the funds to the state in 

which the jurisdiction is located. 

b. If a state or insular area receiving 

an allocation of funds under this notice 

fails to submit a substantially complete 

application for its allocation by 

December 1, 2008, or submits an 

application for less than the total 

allocation amount, HUD will 

simultaneously notify the state or 

insular area of the reduction in its 

allocation amount and proceed to 

reallocate the funds to the 10 highestneed states based on original rankings of 

need. 

2. If any jurisdiction, state, insular, or 

local area fails to meet the requirement 

to use its grant within 18 months of 

receipt of the amounts, as required, 

HUD, on the first business day after that 

deadline, will simultaneously notify the 

grantee and restrict the amount of 

unused funds in the grantee’s line of 

credit. HUD will allow the grantee 30 

days to submit information to HUD 

regarding any additional ‘‘use’’ of funds 

not already recorded in the Disaster 

Recovery Grant Reporting system 

(DRGR). Then HUD will proceed to 

recapture the unused funds. HUD will 

reallocate these unused funds in 

accordance with 42 U.S.C. 5306(c)(4). 

II. Alternative Requirements and 

Regulatory Waivers 

This section of the notice briefly 

provides a justification for alternative 

requirements, where additional 

explanation is necessary, and describes 

the necessary basis for each regulatory 

waiver. This section also highlights 

some of the statutory items applicable to 

the grants. This background narrative is 

followed by the NSP requirement(s). 

HUD’s resources for implementing 

HERA are limited and have other calls 

upon them (for managing the regular 

CDBG and HOME Investment 

Partnership programs (HOME) and the 

New York, Gulf Coast, and Midwest 

disaster recovery grants), and the 

Department wants to target the use of its 

resources toward achieving NSP 

program performance, and preventing 

and eliminating fraud, waste, and 

misuse of program funds. Because no 

funds were available specifically for 

tracking the use of NSP grants, HUD is 

applying an existing system, 

unmodified. This all militates toward 

keeping standards simple or familiar, 

wherever possible. Therefore, 

throughout this notice, where HUD had 

any choice of a standard to use to 

measure compliance, HUD selected the 

simplest one to administer, giving a 

preference to a standard already in 

common use. 

Each grantee eligible for an NSP grant 

already receives annual CDBG 

allocations, has carried out needs 

hearings, has a consolidated plan, an 

annual action plan, a citizen 

participation plan, a monitoring plan, 

an analysis of impediments to fair 

housing choice, and has made CDBG 

certifications. The consolidated plan 

already discusses housing needs related 

to up to four major grant programs: 

CDBG, HOME, Emergency Shelter 

Grants (ESG), and Housing 

Opportunities for Persons With AIDS 

(HOPWA). A grantee’s annual action 

plan describes the activities budgeted 

under each of those annual programs. 

HUD is treating a grantee’s use of its 

NSP grant to be a substantial 

amendment to its current approved 

consolidated plan and annual action 

plan. The NSP grant is a special CDBG 

allocation to address the problem of 

abandoned and foreclosed homes. 

HERA establishes the need, targets the 

geographic areas, and limits the eligible 

uses of NSP funds. Treating the NSP as 

a substantial amendment will expedite 

the distribution of NSP funds, while 

ensuring citizen participation on the 

specific use of the funds. HUD is 

waiving the consolidated plan 

regulations on the certification of 

consistency with the consolidated plan 

to mean the NSP funds will be used to 

meet the congressionally identified 

needs of abandoned and foreclosed 

homes in the targeted areas set forth in 

the grantee’s substantial amendment. In 

addition, HUD is waiving the 

consolidated plan regulations to the 

extent necessary to adjust reporting to 

fit the requirements of HERA and the 

use of the DRGR. 

The waivers, alternative requirements, 

and statutory changes apply only to the 

grant funds appropriated under HERA 

and not to the use of regular formula 

allocations of CDBG funds, even if they 

are used in conjunction with NSP funds 

for a project. They provide expedited 

program implementation and 

implement statutory requirements 

unique to this appropriation. 

A. Definitions for Purposes of the CDBG 

Neighborhood Stabilization Program 

Background 

Certain terms are used in HERA that 

are not used in the regular CDBG 

program, or the terms are used 

differently in HERA and the HCD Act. 

In the interest of speed and clarity of 

administration, HUD is defining these 

terms in this notice for all grantees, 

including states. For the same reason, 

HUD is also defining eligible fund uses 

for all grantees, including states. States 

may define other program terms under 

the authority of 24 CFR 570.481(a), and 

will be given maximum feasible 

deference in accordance with 24 CFR 

570.480(c) in matters related to the 

administration of their NSP programs. 

Requirement 

Abandoned. A home is abandoned 

when mortgage or tax foreclosure 

proceedings have been initiated for that 

property, no mortgage or tax payments 

have been made by the property owner 

for at least 90 days, AND the property 

has been vacant for at least 90 days. 

Blighted structure. A structure is 

blighted when it exhibits objectively 

determinable signs of deterioration 

sufficient to constitute a threat to 

human health, safety, and public 

welfare. 

CDBG funds. CDBG funds means, in 

addition to the definition at 24 CFR 

570.3, grant funds distributed under this 

notice. 

Current market appraised value. The 

current market appraised value means 

the value of a foreclosed upon home or 

residential property that is established 

through an appraisal made in 

conformity with the appraisal 

requirements of the URA at 49 CFR 

24.103 and completed within 60 days 

prior to an offer made for the property 

by a grantee, subrecipient, developer, or 

individual homebuyer. 

Foreclosed. A property ‘‘has been 

foreclosed upon’’ at the point that, 

under state or local law, the mortgage or 

tax foreclosure is complete. HUD 

generally will not consider a foreclosure 

to be complete until after the title for the 

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property has been transferred from the 

former homeowner under some type of 

foreclosure proceeding or transfer in 

lieu of foreclosure, in accordance with 

state or local law. 

Land bank. A land bank is a 

governmental or nongovernmental 

nonprofit entity established, at least in 

part, to assemble, temporarily manage, 

and dispose of vacant land for the 

purpose of stabilizing neighborhoods 

and encouraging re-use or 

redevelopment of urban property. For 

the purposes of the NSP program, a land 

bank will operate in a specific, defined 

geographic area. It will purchase 

properties that have been abandoned or 

foreclosed upon and maintain, 

assemble, facilitate redevelopment of, 

market, and dispose of the land-banked 

properties. If the land bank is a 

governmental entity, it may also 

maintain abandoned or foreclosed 

property that it does not own, provided 

it charges the owner of the property the 

full cost of the service or places a lien 

on the property for the full cost of the 

service. 

Revenue for the purposes of section 

2301(d)(4). Revenue has the same 

meaning as program income, as defined 

at 24 CFR 570.500(a) with the 

modifications in this notice. 

Subrecipient. Subrecipient shall have 

the same meaning as at the first 

sentence of 24 CFR 570.500(c). This 

includes any nonprofit organization 

(including a unit of general local 

government) that a state awards funds 

to. 

Use for the purposes of section 

2301(c)(1). Funds are used when they 

are obligated by a state, unit of general 

local government, or any subrecipient 

thereof, for a specific NSP activity; for 

example, for acquisition of a specific 

property. Funds are obligated for an 

activity when orders are placed, 

contracts are awarded, services are 

received, and similar transactions have 

occurred that require payment by the 

state, unit of general local government, 

or subrecipient during the same or a 

future period. Note that funds are not 

obligated for an activity when 

subawards (e.g., grants to subrecipients 

or to units of local government) are 

made. 

B. Pre-Grant Process 

Background 

With this notice, HUD is establishing 

the NSP allocation formula, including 

reallocation provisions, and announcing 

the distribution of funds. CDBG grantees 

receiving NSP allocations may 

immediately begin to prepare and 

submit action plan substantial 

amendments for NSP funds, in 

accordance with this notice. (Insular 

areas should follow the requirements for 

entitlement communities.) 

To receive NSP funding, each CDBG 

grantee listed in Attachment A must 

submit an action plan substantial 

amendment to HUD in accordance with 

this notice by December 1, 2008. 

HUD encourages each grantee to carry 

out its NSP activities in the context of 

a comprehensive plan for the 

community’s vision of how it can make 

its neighborhoods not only more stable, 

but also more sustainable, competitive, 

and integrated into the overall 

metropolitan fabric, including access to 

transit, affordable housing, employers, 

and services. 

HUD encourages each local 

jurisdiction receiving an allocation to 

carefully consider its administrative 

capacity to use the funds within the 

statutory deadline versus the capacity of 

the state administrator. HUD expects 

that after such consideration, some 

jurisdictions may choose to apply for 

less than the full amount, which will 

allow the balance of their grants to pass 

to the NSP administrator at the state 

level. 

Another way jurisdictions may 

cooperate to carry out their grant 

programs is through a joint request to 

HUD. HUD is providing regulatory 

waivers and alternative requirements to 

allow joint requests among entitlement 

communities and to allow joint requests 

between an entitlement community and 

a state. Any two or more contiguous 

entitlement communities (metropolitan 

cities or urban counties) that are in the 

same metropolitan area and that are 

eligible to receive an NSP grant may 

instead make a joint request to HUD to 

implement a joint NSP program. A 

jurisdiction need not have a joint 

agreement with an urban county under 

the regular CDBG entitlement program 

to request a joint program for NSP 

funding. Similarly, any entitlement 

community eligible to receive an NSP 

grant may instead make a request for a 

joint NSP program with its state. An 

NSP joint request under a cooperation 

agreement results in a single combined 

grant and a single action plan 

substantial amendment. Potential 

requestors should contact HUD as soon 

as possible (as far as possible in advance 

of publishing a proposed NSP 

substantial amendment) for technical 

guidance. The requestors will specify 

which jurisdiction will receive the 

funds and administer the combined 

grant on behalf of the requestors; in the 

case of a joint request between a local 

government jurisdiction and a state, the 

state will administer the combined 

grant. (Grantees choosing this option 

should consider the Consolidated Plan 

and citizen participation implications of 

this approach. The lead entity’s 

substantial amendment will cover any 

participating members. The citizen 

participation process must include 

citizens of all jurisdictions participating 

in the joint NSP program, not just those 

of the lead entity.) 

Given the rule of construction in 

HERA that NSP funds generally are 

construed as CDBG program funds, 

subject to CDBG program requirements, 

HUD generally is treating NSP funds as 

a special allocation of Fiscal Year (FY) 

2008 CDBG funding. This has important 

consequences for local governments 

presently participating in an existing 

urban county program, and for 

metropolitan cities that have joint 

agreements with urban counties. HUD 

will consider any existing cooperation 

agreements between a local government 

and an urban county governing FY2008 

CDBG funding (for purposes of either an 

urban county or a joint program) to 

automatically cover NSP funding as 

well. These cooperation agreements will 

continue to apply to the use of NSP 

funds for the duration of the NSP grant, 

just as cooperation agreements covering 

regular CDBG Entitlement program 

funds continue to apply to any use of 

the funds appropriated during the 3- 

year period covered by the agreements. 

For example, a local government 

presently has a cooperation agreement 

covering a joint program or participation 

in an urban county for federal FYs 2007, 

2008 and 2009. The local government 

may choose to discontinue its 

participation with the county at the end 

of the applicable qualification period for 

purposes of regular CDBG entitlement 

funding. However, the county will still 

be responsible for any NSP projects 

funded in that community, and for any 

NSP funding the local government 

receives from the county, until those 

funds are expended and the funded 

activities are completed. 

A third method of cooperating is also 

available. A jurisdiction may choose to 

apply for its entire grant, and then enter 

into a subrecipient agreement with 

another jurisdiction or nonprofit entity 

to administer the grant. In this manner, 

for example, all of the grantees 

operating in a single metropolitan area 

could designate the same land-bank 

entity (or the state housing finance 

agency) as a subrecipient for some or all 

of their NSP activities. 

Each grantee will have until 

December 1, 2008, to complete and 

submit a substantial amendment to its 

annual action plan. A grantee that 

wishes to initially submit its action plan 

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amendment to HUD electronically in the 

DRGR system rather than via paper may 

do so by contacting its local field office 

for the DRGR submission directions. 

Paper submissions to HUD also will be 

allowed, although each grantee must set 

up its action plan in DRGR prior to the 

deadline for the first required 

performance report after receiving a 

grant. 

HUD is using DRGR for the NSP 

because no other application and 

reporting system was sufficiently 

flexible to deal with the alternative 

requirements. The emergency nature of 

this legislation and corresponding 

statutory time frames do not give HUD 

sufficient time to develop a new system 

or modify an existing system to 

perfectly fit NSP. 

HUD encourages grantees, during 

development of their action plan 

amendments, to contact HUD field 

offices for guidance in complying with 

these requirements, or if they have any 

questions regarding meeting grant 

requirements. 

Normally, in the CDBG program, a 

grantee takes at least 30 days soliciting 

comment from its citizens before it 

submits an annual action plan to HUD, 

which then has 45 days to accept or 

reject the plan. To expedite the process 

and to ensure that the NSP grants are 

awarded in a timely manner, while 

preserving reasonable citizen 

participation, HUD is waiving the 

requirement that the grantee follow its 

citizen participation plan for this 

substantial amendment. HUD is 

shortening the minimum time for 

citizen comments and requiring the 

substantial amendment materials to be 

posted on the grantee’s official website 

as the materials are developed, 

published, and submitted to HUD. 

Each grantee must use its NSP funds 

within 18 months of receipt. A grantee 

will be deemed by HUD to have 

received its NSP grant at the time HUD 

signs its NSP grant agreement (or 

amendment thereof, in the case of a 

state that later receives reallocated grant 

funds). 

Grantees are cautioned that, despite 

the expedited application and plan 

process, they are still responsible for 

ensuring that all citizens have equal 

access to information about the 

programs. Among other things, this 

means that each grantee must ensure 

that program information is available in 

the appropriate languages for the 

geographic area served by the 

jurisdiction. This will be a particular 

issue for those states that this notice is 

allowing to make grants throughout the 

state, including into regular CDBG 

entitlement areas. Because regular State 

CDBG funds are not used in entitlement 

areas, State CDBG staffs may not be 

aware of limited English proficient 

(LEP) speaking populations in those 

metropolitan jurisdictions. 

HUD will review each grantee 

submission for completeness and 

consistency with the requirements of 

this notice and will disapprove 

incomplete and inconsistent action plan 

amendments. HUD will allow revision 

and resubmission of a disapproved 

action plan in accordance with 24 CFR 

91.500 so long as any such resubmission 

is received by HUD 45 days or less 

following the date of first disapproval 

and in no case later than the close of 

business February 13, 2009. 

In combination, the notice alternative 

requirements provide the following 

expedited steps for NSP grants: 

• Proposed action plan amendment 

published via the usual methods and on 

the Internet for no less than 15 calendar 

days of public comment; 

• Final action plan amendment 

posted on the Internet and submitted to 

HUD by December 1, 2008 (grant 

application includes Standard Form 424 

(SF–424) and certifications); 

• HUD expedites review, 

• HUD accepts the plan and prepares 

a cover letter, grant agreement, and 

grant conditions; 

• Grant agreement signed by HUD 

and immediately transmitted to the 

grantee; 

• Grantee signs and returns the grant 

agreements; 

• HUD establishes the line of credit 

and the grantee requests and receives 

voice response system (VRS) access; 

• After completing the environmental 

review(s) pursuant to 24 CFR part 58 

and, as applicable, receiving from HUD 

or the state an approved Request for 

Release of Funds and certification, the 

grantee may draw-down funds from the 

line of credit. 

The action plan substantial 

amendment and citizen participation 

alternative requirement will permit an 

expedited grant-making process, but one 

that still provides for public notice, 

appraisal, examination, and comment 

on the activities proposed for the use of 

NSP grant funds. 

Requirement 

1. General note. Except as described 

in this notice, statutory and regulatory 

provisions governing the CDBG program 

for states and entitlement communities, 

as applicable, shall apply to the use of 

these funds. 

2. Contents of an NSP Action Plan 

substantial amendment. The elements in 

the NSP substantial amendment to the 

Annual Action Plan required for the 

CDBG program under part 91 are: 

a. General information about needs, 

distribution, use of funds, and 

definitions: 

i. Summary needs data identifying the 

geographic areas of greatest need in the 

grantee’s jurisdiction. (A state must 

include the needs of the entire state and 

not just the areas not receiving an NSP 

allocation. To include the needs of an 

entitlement community, the state may 

either incorporate an entitlement 

jurisdiction’s consolidated plan and 

NSP needs by reference and hyperlink 

on the Internet, or state the needs for 

that jurisdiction in the state’s own plan); 

ii. A narrative describing how the 

distribution and uses of the grantee’s 

NSP funds will meet the requirements 

of Section 2301(c)(2) of HERA that 

funds be distributed to the areas of 

greatest need, including those with the 

greatest percentage of home 

foreclosures, with the highest 

percentage of homes financed by a 

subprime mortgage related loan, and 

identified by the grantee as likely to face 

a significant rise in the rate of home 

foreclosures. The grantee’s narrative 

must address the three need categories 

in the NSP statute, but the grantee may 

also consider other need categories; 

iii. For the purposes of the NSP, the 

narratives will include: 

(A) A definition of ‘‘blighted 

structure’’ in the context of state or local 

law; 

(B) A definition of ‘‘affordable rents;’’ 

(C) A description of how the grantee 

will ensure continued affordability for 

NSP-assisted housing; and 

(D) A description of housing 

rehabilitation standards that will apply 

to NSP-assisted activities. 

b. Information by activity describing 

how the grantee will use the funds, 

identifying: 

i. The eligible use of funds under 

NSP; 

ii. The eligible CDBG activity or 

activities; 

iii. The areas of greatest need 

addressed by the activity or activities; 

iv. The expected benefit to incomequalified persons or households or 

areas; 

v. Appropriate performance measures 

for the activity (e.g., units of housing to 

be acquired, rehabilitated, or 

demolished for the income levels 

represented in DRGR, which are 

currently 50 percent of area median 

income and below, 51 to 80 percent, and 

81 to 120 percent); 

vi. Amount of funds budgeted for the 

activity; 

vii. The name and location of the 

entity that will carry out the activity; 

and 

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viii. The expected start and end dates 

of the activity. 

c. A Description of the general terms 

under which assistance will be 

provided, including: 

i. If the activity includes acquisition 

of real property, the discount required 

for acquisition of foreclosed-upon 

properties; 

ii. Range of interest rates (if any); 

iii. Duration or term of assistance; 

iv. Tenure of beneficiaries (e.g., rental 

or homeownership); and 

v. If the activity produces housing, 

how the design of the activity will 

ensure continued affordability; and 

vi. If the funds used for the activity 

are to count toward the requirement at 

section 2301(f)(3)(A)(ii) to provide 

benefit to low-income persons (earning 

50 percent or less of area median 

income). 

d. Information on how to contact 

grantee program administrators, so that 

citizens and other interested parties 

know who to contact for additional 

information. 

3. Continued affordability. Grantees 

shall ensure, to the maximum extent 

practicable and for the longest feasible 

term, that the sale, rental, or 

redevelopment of abandoned and 

foreclosed-upon homes and residential 

properties under this section remain 

affordable to individuals or families 

whose incomes do not exceed 120 

percent of area median income or, for 

units originally assisted with funds 

under the requirements of section 

2301(f)(3)(A)(ii), remain affordable to 

individuals and families whose incomes 

do not exceed 50 percent of area median 

income. 

a. In its NSP action plan substantial 

amendment, a grantee will define 

‘‘affordable rents’’ and the continued 

affordability standards and enforcement 

mechanisms that it will apply for each 

(or all) of its NSP activities. HUD will 

consider any grantee adopting the 

HOME program standards at 24 CFR 

92.252(a), (c), (e), and (f), and 92.254 to 

be in minimal compliance with this 

standard and expects any other 

standards proposed and applied by a 

grantee to be enforceable and longer in 

duration. (Note that HERA’s continued 

affordability standard is longer than that 

required of subrecipients and 

participating units of general local 

government under 24 CFR 570.503 and 

570.501(b).) 

b. The grantee must require each NSPassisted homebuyer to receive and 

complete at least 8 hours of homebuyer 

counseling from a HUD-approved 

housing counseling agency before 

obtaining a mortgage loan. The grantee 

must ensure that the homebuyer obtains 

a mortgage loan from a lender who 

agrees to comply with the bank 

regulators’ guidance for non-traditional 

mortgages (see, Statement on Subprime 

Mortgage Lending issued by the Office 

of the Comptroller of the Currency, 

Board of Governors of the Federal 

Reserve System, Federal Deposit 

Insurance Corporation, Department of 

the Treasury, and National Credit Union 

Administration, available at http:// 

www.fdic.gov/regulations/laws/rules/ 

5000–5160.html). Grantees must design 

NSP programs to comply with this 

requirement and must document 

compliance in the records, for each 

homebuyer. Grantees are cautioned 

against providing or permitting 

homebuyers to obtain subprime 

mortgages for whom such mortgages are 

inappropriate, including homebuyers 

who qualify for traditional mortgage 

loans. 

c. If NSP funds assist a property that 

was previously assisted with HOME 

funds, but on which the affordability 

restrictions were terminated through 

foreclosure or transfer in lieu of 

foreclosure pursuant to 24 CFR part 92, 

the grantee must revive the HOME 

affordability restrictions for the greater 

of the remaining period of HOME 

affordability or the continuing 

affordability requirements of this notice. 

4. Citizen participation alternative 

requirement. HUD is providing an 

alternative requirement to 42 U.S.C. 

5304(a)(2) and (3), to expedite 

distribution of grant funds and to 

provide for expedited citizen 

participation for the NSP substantial 

amendment. Provisions of 24 CFR 

570.302 and 570.486 and those of 24 

CFR 91.105(k) and 91.115(i), with 

respect to following the citizen 

participation plan, are waived to the 

extent necessary to allow 

implementation of the requirements 

below. 

a. To receive its grant allocation, a 

grantee must submit to HUD for 

approval an NSP application by 

December 1, 2008. This submission will 

include a signed standard federal form 

SF–424, signed certifications, and a 

substantial action plan amendment 

meeting the requirements of paragraph b 

below. (24 CFR 91.505 is waived to the 

extent necessary to require submission 

of the substantial amendment to HUD 

for approval in accordance with this 

notice.) 

b. Each grantee must prepare and 

submit its annual Action Plan 

amendment to HUD in accordance with 

the consolidated plan procedures for a 

substantial amendment under the 

annual CDBG program as modified by 

this notice or HUD will reallocate the 

funds allocated for that grantee. HUD is 

providing alternative requirements to 42 

U.S.C. 5304(a)(2) and waiving 91.105(k) 

and 91.115(i) to the extent necessary to 

allow the grantee to provide no fewer 

than 15 calendar days for citizen 

comment (rather than 30 days) for its 

initial NSP submission, and to require 

that, at the time of submission to HUD, 

each grantee post its approved action 

plan amendment and any subsequent 

NSP amendments on its official website 

along with a summary of citizen 

comments received within the 15-day 

comment period. After HUD processes 

and approves the plan amendment and 

both HUD and the grantee have signed 

the grant agreement, HUD will establish 

the grantee’s line of credit in the amount 

of funds included in the Action Plan 

amendment, up to the allocation 

amount. 

5. Joint requests. To expedite the use 

of funds, HUD is providing an 

alternative requirement to 42 U.S.C. 

5304(i) and is waiving 24 CFR 570.308 

to the extent necessary to allow for 

additional joint programs described 

below. 

a. Entitlement Community Joint 

Agreements. Two or more contiguous 

entitlement communities (metropolitan 

cities or urban counties) that are eligible 

to receive a NSP allocation and are 

located in the same metropolitan area 

may enter into joint agreements. All 

members to the joint agreement must be 

eligible to receive NSP funds, and one 

unit of general local government must 

be designated as the lead entity. The 

lead entity must execute the NSP grant 

agreement with HUD. Consistent with 

24 CFR 570.308, the lead entity must 

assume responsibility for administering 

the NSP grant on behalf of all members, 

in compliance with applicable program 

requirements. The substantial 

amendment to the lead entity’s action 

plan will include all participating 

entitlement communities. 

b. Joint agreements with a state. Any 

entitlement community that is eligible 

to receive an NSP allocation may enter 

into a joint agreement with its state. The 

state shall be the lead entity and must 

assume responsibility for administering 

the NSP grant on behalf of the 

entitlement community, in compliance 

with applicable program requirements. 

The substantial amendment to the 

state’s action plan will include any 

participating entitlement community. 

6. Effect of existing cooperation 

agreements governing joint programs 

and urban counties. Any cooperation 

agreement between a unit of general 

local government and a county, 

concerning either a joint program or 

participation in an urban county under 

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24 CFR 570.307 or 570.308, and 

governing CDBG funds appropriated for 

federal FY 2008, will be considered to 

incorporate and apply to NSP funding. 

Any such cooperation agreements will 

continue to apply to the use of NSP 

funds until the NSP funds are expended 

and the NSP grant is closed out. 

Grantees should note that certain 

provisions in existing cooperation 

agreements that govern FY2008 CDBG 

funding may be inconsistent with parts 

of HERA and this notice. For instance, 

set minimum and/or maximum 

allocation amounts may conflict with 

priority distributions to areas of greatest 

need identified in the grantee’s action 

plan substantial amendment. 

Conforming amendments should be 

made to existing cooperation 

agreements, as necessary, to comply 

with HERA and this notice. 

C. Reimbursement for Pre-Award Costs 

Background 

NSP allocatees will need to move 

forward rapidly to prepare the NSP 

substantial amendment and to 

undertake other administrative actions, 

including environmental reviews, as 

soon as allocations are known. 

Therefore, HUD is granting permission 

to states and entitlement jurisdictions 

receiving a direct allocation of NSP 

funds (see Attachment A) to incur preaward costs as if each was a new grantee 

preparing to receive its first allocation of 

CDBG funds. 

Requirement 

24 CFR 570.200(h) is waived to the 

extent necessary to grant permission to 

entitlement jurisdictions receiving a 

direct NSP allocation under this notice 

to incur pre-award costs as if each was 

a new grantee preparing to receive its 

first allocation of CDBG funds. 

Similarly, in accordance with OMB 

Circular A–87, Attachment B, paragraph 

31, HUD is allowing states to incur preaward costs as if each was a new grantee 

preparing to receive its first allocation of 

CDBG funds. As a new grantee, an NSP 

allocatee will be allowed to incur costs 

necessary to develop the NSP 

substantial action plan amendment and 

undertake other administrative actions 

necessary to receive its first grant, prior 

to the costs being included in the final 

plan, provided that the other conditions 

of 24 CFR 570.200(h) are met. (For units 

of general local government (including 

entitlements not receiving a direct NSP 

allocation under this notice) applying to 

the state, 24 CFR 570.489(b) applies 

unmodified.) 

D. Grant Conditions 

For NSP grantees that HUD 

determines are high risk in accordance 

with 24 CFR 85.12(a), HUD will apply 

additional grant conditions in 

accordance with 24 CFR 85.12(b). 

E. Income Eligibility Requirement 

Changes 

Background 

The NSP program includes two lowand moderate-income requirements at 

section 2301(f)(3)(A) that supersede 

existing CDBG income qualification 

requirements. Under the heading ‘‘Low 

and Moderate Income Requirement,’’ 

HERA states that: ‘‘All of the funds 

appropriated or otherwise made 

available under this section shall be 

used with respect to individuals and 

families whose income does not exceed 

120 percent of area median income.’’ 

This provision does two main things. 

First, for the purposes of the NSP, it 

effectively supersedes the overall 

benefit provisions of the HCD Act and 

the CDBG regulations, which allow up 

to 30 percent of a grant to be used for 

activities that meet a national objective 

other than the low- and moderateincome one. Thus, NSP allows the use 

of only the low- and moderate-income 

national objective. Activities may not 

qualify under NSP using the ‘‘prevent or 

eliminate slums and blight’’ or ‘‘address 

urgent community development needs’’ 

objectives. 

Second, this provision also redefines 

and supersedes the definition of ‘‘lowand moderate-income,’’ effectively 

allowing households whose incomes 

exceed 80 percent of area median 

income but do not exceed 120 percent 

of area median income to qualify as if 

their incomes did not exceed the 

published low- and moderate-income 

levels of the regular CDBG program. To 

prevent confusion, HUD will refer to 

this new income group as ‘‘middle 

income,’’ and keep the regular CDBG 

definitions of ‘‘low-income’’ and 

‘‘moderate income’’ in use. Further, 

HUD will characterize aggregated 

households whose incomes do not 

exceed 120 percent of median income as 

‘‘low-, moderate-, and middle-income 

households,’’ abbreviated as LMMH. For 

the purposes of NSP CDBG only, an 

activity may meet the HERA low- and 

moderate-income national objective if 

the assisted activity: 

• Provides or improves permanent 

residential structures that will be 

occupied by a household whose income 

is at or below 120 percent of area 

median income (abbreviated as LMMH); 

• Serves an area in which at least 51 

percent of the residents have incomes at 

or below 120 percent of area median 

income (LMMA); 

• Creates or retains jobs for persons 

whose household incomes are at or 

below 120 percent of median income 

(LMMJ); or 

• Serves a limited clientele whose 

incomes are at or below 120 percent of 

area median income (LMMC). 

HUD will use the parenthetical terms 

above to refer to NSP national objectives 

in program implementation, to avoid 

confusion with the regular HCD Act 

definitions. 

Land banks are not allowed in the 

regular CDBG program because of the 

very high risk that the delay between 

acquiring property and meeting a 

national objective can be excessively 

long, attenuating the intended CDBG 

program benefits by delaying benefit far 

beyond the annual or even the 5-year 

consolidated plan cycles. In the regular 

CDBG program (and in the NSP other 

than in an eligible land-bank use), a 

property acquisition activity is 

dependent on the national objective met 

by the subsequent reuse of the property 

in order to demonstrate program 

compliance. Given this, the HERA 

direction that assistance to land banks is 

an eligible use of NSP funds requires an 

alternative requirement and policy 

clarification. 

For grantees choosing to assist land 

banks or demolition of structures with 

NSP funds, the change to the income 

qualification level for low-, moderate-, 

and middle-income areas will likely 

include most of the neighborhoods 

where property stabilization is required. 

If an assisted land bank is not merely 

acquiring properties, but is also carrying 

out other activities intended to arrest 

neighborhood decline, such as 

maintenance, demolition, and 

facilitating redevelopment of the 

properties, HUD will, for NSP-assisted 

activities only, accept that the 

acquisition and management activities 

of the land bank may provide sufficient 

benefit to an area generally (as described 

in 24 CFR 570.208(a)(1) and 

570.483(b)(1)) to meet a national 

objective (LMMA) prior to final 

disposition of the banked property. 

HUD notes that the grantee must 

determine the actual service area 

benefiting from a land bank’s activities, 

in accordance with the regulations. 

However, HUD does not believe the 

benefits of just holding property are 

sufficient to stabilize most 

neighborhoods or that this is the best 

use of limited NSP funds absent a re-use 

plan. Therefore, HUD is requiring that a 

land bank may not hold a property for 

more than 10 years without obligating 

the property for a specific, eligible 

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redevelopment of that property in 

accordance with NSP requirements. 

Note that if a state provides funds to 

an entitlement community, the 

entitlement community must apply the 

area median income levels applicable to 

its regular CDBG program geography 

and not the ‘‘balance of state’’ levels. 

Other than the change in the 

applicable low- and moderate-income 

qualification level from 80 percent to 

120 percent, the area benefit, housing, 

jobs, and limited clientele benefit 

requirements at 570.208(a) and 

570.483(b) remain unchanged, as does 

the required documentation. 

The other NSP low- and moderateincome related provision states that: 

‘‘not less than 25 percent of the funds 

appropriated or otherwise made 

available under this section shall be 

used for the purchase and 

redevelopment of abandoned or 

foreclosed homes or residential 

properties that will be used to house 

individuals or families whose incomes 

do not exceed 50 percent of area median 

income.’’ 

HUD advises grantees to take note of 

this new threshold as they design NSP 

activities. This provision does not have 

a parallel in the regular CDBG program. 

Grantees must document that an amount 

equal to at least 25 percent of a grantee’s 

NSP grant (initial allocation plus any 

reallocations) has been budgeted in the 

initial approved action plan substantial 

amendment for activities that will 

provide housing for income-qualified 

individuals or families. Prior to and at 

grant closeout, HUD will review 

grantees for compliance with this 

provision by determining whether at 

least 25 percent of grant funds have 

been expended for housing for 

individual households whose incomes 

do not exceed 50 percent of area median 

income. 

Requirements 

1. Overall benefit supersession and 

alternative requirement. The 

requirements at 42 U.S.C. 5301(c), 42 

U.S.C. 5304(b)(3)(A), 24 CFR 570.484 

(for states), and 24 CFR 570.200(a)(3) 

that 70 percent of funds are for activities 

that benefit low- and moderate-income 

persons are superseded and replaced by 

section 2301(f)(3)(A) of HERA. One 

hundred percent of NSP funds must be 

used to benefit individuals and 

households whose income does not 

exceed 120 percent of area median 

income. NSP shall refer to such 

households as ‘‘low-, moderate-, and 

middle-income.’’ 

2. National objectives supersession 

and alternative requirements. The 

requirements at 42 U.S.C 5301(c) are 

superseded and 24 CFR 570.208(a) and 

570.483 are waived to the extent 

necessary to allow the following 

alternative requirements: 

a. For purposes of NSP only, the term 

‘‘low- and moderate-income person’’ as 

it appears throughout the CDBG 

regulations at 24 CFR part 570 shall be 

defined as a member of a low-, 

moderate-, and middle-income 

household, and the term ‘‘low- and 

moderate-income household’’ as it 

appears throughout the CDBG 

regulations shall be defined as a 

household having an income equal to or 

less than 120 percent of area median 

income, measured as 2.4 times the 

current Section 8 income limit for 

households below 50 percent of median 

income, adjusted for family size. A state 

choosing to carry out an activity directly 

must apply the requirements of 24 CFR 

570.208(a) to determine whether the 

activity has met the low-, moderate-, 

and middle-income (LMMI) national 

objective and must maintain the 

documentation required at 24 CFR 

570.506 to demonstrate compliance to 

HUD. 

b. The national objectives related to 

prevention and elimination of slums 

and blight and addressing urgent 

community development needs (24 CFR 

570.208(b) and (c) and 570.483(c) and 

(d)) are not applicable to NSP-assisted 

activities. 

c. Each grantee whose plan includes 

assisting rental housing shall develop 

and make public its definition of 

affordable rents for NSP-assisted rental 

projects. 

d. An NSP-assisted property may not 

be held in a land bank for more than 10 

years without obligating the property for 

a specific, eligible redevelopment of that 

property in accordance with NSP 

requirements. 

F. State Distribution to Entitlement 

Communities and Indian Tribes 

Background 

This notice includes an alternative 

requirement to the HCD Act and a 

regulatory waiver allowing distribution 

of funds by a state to CDBG regular 

entitlement communities and Tribes. 

This is consistent with the provision of 

HERA that specifically sets distribution 

priorities for areas with the greatest 

need, including ‘‘metropolitan areas, 

metropolitan cities, urban areas, rural 

areas, low- and moderate-income areas 

* * *’’ Therefore, states receiving 

allocations under this notice may 

distribute funds to or within any 

jurisdiction within the state that is 

among those with the greatest need, 

even if the jurisdiction is among those 

receiving a direct formula allocation of 

funds from HUD under the regular 

CDBG program or this notice. 

Requirement 

Alternative requirement for 

distribution to CDBG metropolitan 

cities, urban counties, and Tribes. In 

accordance with the direction of HERA 

that grantees distribute funds to the 

areas of greatest need, HUD is providing 

an alternative requirement to 42 U.S.C. 

5302(a)(7) (definition of 

‘‘nonentitlement area’’) and waiving 

provisions of 24 CFR part 570, including 

24 CFR 570.480(a), that would prohibit 

states electing to receive CDBG funds 

from distributing such funds to units of 

general local government in entitlement 

communities or to Tribes. The 

appropriations law supersedes the 

statutory distribution prohibition at 42 

U.S.C. 5306(d)(1) and (2)(A). 

Alternatively, the state is required to 

distribute funds without regard to a 

local government status under any other 

CDBG program and must use funds in 

entitlement jurisdictions if they are 

identified as areas of greatest need, 

regardless of whether the entitlement 

receives its own NSP allocation. 

G. State’s Direct Action 

Background 

In the State CDBG program, states 

receiving CDBG funds may not directly 

use the funds for activities, but must 

distribute them to units of general local 

government, which then use the funds 

for program activities. States may still 

use this ‘‘method of distribution’’ 

program model under NSP, but HUD 

reminds the states of the 18-month 

‘‘use’’ requirement. HUD also notes the 

language of section 2301(c) that says, in 

part, that: 

Any State * * * that receives amounts 

pursuant to this section shall * * * use such 

amounts to purchase and redevelop * * *. 

This clearly speaks to the states using 

funds directly for projects and 

supersedes the HCD Act direction for 

states to only distribute funds to 

nonentitlement areas. Direct use of 

funds by a state may also result in more 

expeditious use of NSP funds. 

Therefore, a state receiving NSP funds 

may carry out NSP activities directly for 

some or all of its assisted grant 

activities, just as CDBG entitlement 

communities do under 24 CFR 

570.200(f), including, but not limited to, 

carrying out activities using its own 

employees, procuring contractors, 

private developers, and providing loans 

and grants through nonprofit 

subrecipients (including local 

governments and other public 

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nonprofits such as regional or local 

planning or development authorities 

and public housing authorities). 

For those activities a state chooses to 

carry out directly, HUD strongly advises 

the state to adopt the recordkeeping 

required for an entitlement community 

at 570.506 and the subrecipient 

agreement provisions at 570.503. Also, 

in such cases, as an alternative 

requirement to 42 U.S.C. 5304(i), the 

state may retain and re-use program 

income as if it were an entitlement 

community. 

HUD is granting regulatory waivers of 

State CDBG regulations to conform the 

applicable management, real property 

change of use, and recordkeeping rules 

when a state chooses to carry out 

activities as if it were an entitlement 

community. 

Requirements 

1. Responsibility for state review and 

handling of noncompliance. This 

change conforms NSP requirements 

with the waiver allowing the state to 

carry out activities directly. 24 CFR 

570.492 is waived and the following 

alternative requirement applies: The 

state shall make reviews and audits, 

including on-site reviews of any 

subrecipients, designated public 

agencies, and units of general local 

government as may be necessary or 

appropriate to meet the requirements of 

42 U.S.C. 5304(e)(2), as amended, as 

modified by this 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 designated public agencies or 

units of general local governments and 

for its subrecipients. 

2. Change of use of real property for 

state grantees acting directly. This 

waiver conforms the change of use of 

real property rule to the waiver allowing 

a state to carry out activities directly. 

For purposes of this program, in 24 CFR 

570.489(j), (j)(1), and the last sentence of 

(j)(2), ‘‘unit of general local 

government’’ shall be read as ‘‘unit of 

general local government or state.’’ 

3. Recordkeeping for a state grantee 

acting directly. Recognizing that the 

state may carry out activities directly, 24 

CFR 570.490(b) is waived in such a case 

and the following alternative provision 

shall apply: State records. The state 

shall establish and maintain such 

records as may be necessary to facilitate 

review and audit by HUD of the state’s 

administration of NSP funds under 24 

CFR 570.493. 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: (1) Enable HUD to make 

the applicable determinations described 

at 24 CFR 570.493; (2) make compliance 

determinations for activities carried out 

directly by the state; and (3) show how 

activities funded are consistent with the 

descriptions of activities proposed for 

funding in the action plan. For fair 

housing and equal opportunity 

purposes, and as applicable, such 

records shall include data on the racial, 

ethnic, and gender characteristics of 

persons who are applicants for, 

participants in, or beneficiaries of the 

program. 

4. State compliance with certifications 

for state grantees acting directly. This is 

a conforming change related to the 

waiver to allow a state to act directly. 

Because a state grantee under this 

appropriation may carry out activities 

directly, HUD is applying the 

regulations at 24 CFR 570.480(c) with 

respect to the basis for HUD 

determining whether the state has failed 

to carry out its certifications, so that 

such basis shall be that the state has 

failed to carry out its certifications in 

compliance with applicable program 

requirements. 

5. Clarifying note on the process for 

environmental release of funds when a 

State carries out activities directly. 

Usually, a state distributes CDBG funds 

to units of local government and takes 

on HUD’s role in receiving 

environmental certifications from the 

grant recipients and approving releases 

of funds. For this grant, HUD will allow 

a state grantee to also carry out activities 

directly instead of distributing them to 

other governments. According to the 

environmental regulations at 24 CFR 

58.4, when a state carries out activities 

directly, the state must submit the 

certification and request for release of 

funds to HUD for approval. 

H. Eligibility and Allowable Costs 

Background 

Most of the activities eligible under 

NSP represent a subset of the eligible 

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

to limitations in the reporting system, 

DRGR, the NSP-eligible uses must be 

correlated with CDBG-eligible activities. 

The alternative to this approach, using 

a paper-based action plan and reporting 

process using NSP-eligible uses only 

would be much slower to implement. 

This correlation also reduces 

implementation risks, because it will 

ensure that the NSP grants are 

administered largely in accordance with 

long-established CDBG rules and 

controls. The table in the requirements 

paragraph below shows the eligible uses 

under NSP and the corresponding 

eligible activities from the regulations 

for the regular CDBG entitlement 

program that HUD has determined best 

correspond to those uses. If a grantee 

creates a program design that includes 

a CDBG-eligible activity that is not 

shown in the table to support an NSPeligible use, the Department is 

providing an alternative requirement to 

42 U.S.C. 5305(a) that HUD may allow 

a grantee an additional eligible-activity 

category if HUD finds the activity to be 

in compliance with the NSP statute. As 

under the regular CDBG program, 

grantees may fund costs, such as 

reasonable developer’s fees, related to 

NSP-assisted housing rehabilitation or 

construction activities. NSP funds may 

be used to redevelop acquired property 

for nonresidential uses, such as a public 

park, commercial use, or mixed 

residential and commercial use. 

The annual entitlement CDBG 

program allows up to 20 percent of any 

grant amount plus program income may 

be used for general administration and 

planning costs. The State CDBG 

program is also subject to the 20 percent 

limitation, but within that cap up to 3 

percent may be used by the state for 

state administrative cost and technical 

assistance to potential local government 

program grant recipients, with the 

remainder available to be granted to 

local government recipients for their 

administrative costs. Because some of 

the costs usually allocated under these 

caps are not applicable to NSP grants 

(for example, the costs of completing the 

entire consolidated plan process), these 

amounts seem excessive to HUD in the 

context of the NSP program. On the 

other hand, HUD wants to encourage 

and support expeditious, appropriate, 

and compliant use of grant funds, and 

to prevent fraud, waste, and abuse of 

funds. Therefore, HUD is providing an 

alternative requirement that an amount 

of up to 10 percent of an NSP grant 

provided to a jurisdiction and of up to 

10 percent of program income earned 

may be used for general administration 

and planning activities as those are 

defined at 24 CFR 570.205 and 206. For 

all grantees, including states, the 10 

percent limitation applies to the grant as 

a whole. 

The regulatory and statutory 

requirements for state match for 

program administration at 24 CFR 

570.489 (a)(i) are superseded by the 

statutory direction at section 2301(e)(2) 

that no matching funds shall be required 

for a state or unit of general local 

government to receive a grant. 

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Requirements 

1. Use of grant funds must constitute 

an eligible use under HERA. 

2. In addition to being an eligible NSP 

use of funds, each activity funded under 

this notice must also be CDBG-eligible 

under 42 U.S.C. 5305(a) and meet a 

CDBG national objective. 

3.a. Certain CDBG-eligible activities 

correlate to specific NSP-eligible uses 

and vice versa. 42 U.S.C. 5305(a) and 24 

CFR 570.201–207 and 482(a) through (d) 

are superseded to the extent necessary 

to allow the eligible uses described 

under section 2301(c)(3) of HERA in 

accordance with this paragraph 

(including the table and subparagraphs 

below) or with permission granted, in 

writing, by HUD upon a written request 

by the grantee that demonstrates that the 

proposed activity constitutes an eligible 

use under NSP. All NSP grantees, 

including states, will use the NSP 

categories and CDBG entitlement 

regulations listed below. 

NSP-eligible uses Correlated eligible activities from the CDBG entitlement regulations 

(A) Establish financing mechanisms for purchase and redevelopment of 

foreclosed upon homes and residential properties, including such 

mechanisms as soft-seconds, loan loss reserves, and shared-equity 

loans for low- and moderate-income homebuyers.

• As part of an activity delivery cost for an eligible activity as defined in 

24 CFR 570.206. 

• Also, the eligible activities listed below to the extent financing mechanisms are used to carry them out. 

(B) Purchase and rehabilitate homes and residential properties that 

have been abandoned or foreclosed upon, in order to sell, rent, or 

redevelop such homes and properties.

• 24 CFR 570.201(a) Acquisition 

(b) Disposition, 

(i) Relocation, and 

(n) Direct homeownership assistance (as modified below); 

• 570.202 eligible rehabilitation and preservation activities for homes 

and other residential properties (HUD notes that rehabilitation may 

include counseling for those seeking to take part in the activity). 

(C) Establish land banks for homes that have been foreclosed upon .... 24 CFR 570.201(a) Acquisition and (b) Disposition. 

(D) Demolish blighted structures .............................................................. • 24 CFR 570.201(d) Clearance for blighted structures only. 

(E) Redevelop demolished or vacant properties ...................................... • 24 CFR 570.201(a) Acquisition, 

(b) Disposition, 

(c) Public facilities and improvements, 

(e) Public services for housing counseling, but only to the extent that 

counseling beneficiaries are limited to prospective purchasers or tenants of the redeveloped properties, 

(i) Relocation, and 

(n) Direct homeownership assistance (as modified below). 

• 204 Community based development organizations. 

b. HUD will not consider requests to 

allow foreclosure prevention activities, 

or to allow demolition of structures that 

are not blighted, or to allow purchase of 

residential properties and homes that 

have not been abandoned or foreclosed 

upon as provided in HERA and defined 

in this notice. HUD does not have the 

authority to permit uses or activities not 

authorized by HERA. 

c. New construction of housing is 

eligible as part of eligible-use (E) to 

redevelop demolished or vacant 

properties. 

d. 24 CFR 570.201(n) is waived and 

an alternative requirement provided for 

42 U.S.C. 5305(a) to the extent necessary 

to allow provision of NSP-assisted 

homeownership assistance to persons 

whose income does not exceed 120 

percent of median income. 

4. Alternative requirement for the 

limitation on planning and 

administrative costs. 24 CFR 570.200(g) 

and 570.489(a)(3) are waived to the 

extent necessary to allow each grantee 

under this notice to expend no more 

than 10 percent of its grant amount, plus 

10 percent of the amount of program 

income received by the grantee, for 

activities eligible under 24 CFR 570.205 

or 206. The requirements at 24 CFR 

570.489 are waived to the extent that 

they require a state match for general 

administrative costs. (States may use 

NSP funds under this 10 percent 

limitation to provide technical 

assistance to local governments and 

nonprofit program participants.) 

I. Rehabilitation Standards 

Background 

HERA provides that any NSP-assisted 

rehabilitation of a foreclosed-upon 

home or residential property shall be to 

the extent necessary to comply with 

applicable laws, codes, and other 

requirements relating to housing safety, 

quality, and habitability, in order to sell, 

rent, or redevelop such homes and 

properties. This imposes a requirement 

that does not exist in the CDBG 

program. This means that each grantee 

must describe or reference in its NSP 

action plan amendment what 

rehabilitation standards it will apply for 

NSP-assisted rehabilitation. HUD will 

monitor to ensure the standards are 

implemented. 

HERA defines rehabilitation to 

include improvements to increase the 

energy efficiency or conservation of 

such homes and properties or to provide 

a renewable energy source or sources for 

such homes and properties. Such 

improvements are also eligible under 

the regular CDBG program. HUD 

strongly encourages grantees to use NSP 

funds not only to stabilize 

neighborhoods in the short-term, but to 

strategically incorporate modern, green 

building and energy-efficiency 

improvements in all NSP activities to 

provide for long-term affordability and 

increased sustainability and 

attractiveness of housing and 

neighborhoods. 

J. Sale of Homes 

Background 

Section 2301(d)(2) of HERA directs 

that, if an abandoned or foreclosed-upon 

home or residential property is 

purchased, redeveloped, or otherwise 

sold to an individual as a primary 

residence, then such sale shall be in an 

amount equal to or less than the cost to 

acquire and redevelop or rehabilitate 

such home or property up to a decent, 

safe, and habitable condition. (Sales and 

closing costs are eligible NSP 

redevelopment or rehabilitation costs.) 

Note that the maximum sales price for 

a property is determined by aggregating 

all costs of acquisition, rehabilitation, 

and redevelopment (including related 

activity delivery costs, which generally 

may include, among other items, costs 

related to the sale of the property). 

Requirements 

1. In its records, each grantee must 

maintain sufficient documentation 

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about the purchase and sale amounts of 

each property and the sources and uses 

of funds for each activity so that HUD 

can determine whether the grantee is in 

compliance with this requirement. A 

grantee will be expected to provide this 

documentation individually for each 

activity. 

2. In determining the sales price 

limitation, HUD will not consider the 

costs of boarding up, lawn mowing, 

simply maintaining the property in a 

static condition, or, in the absence of 

NSP-assisted rehabilitation or 

redevelopment of the property, the costs 

of completing a sales transaction or 

other disposition to be redevelopment 

or rehabilitation costs. These costs may 

not be included by the grantee in the 

determination of the sales price for an 

NSP-assisted property. 

3. For reporting purposes only, for a 

housing program involving multiple 

single-family structures under the 

management of a single entity, HUD will 

permit reporting the aggregation of 

activity delivery costs across the total 

portfolio of projects until completion of 

the program or closeout of the grant 

with HUD, whichever comes earlier. 

K. Acquisition and Relocation 

Background 

Acquisition of Foreclosed-Upon 

Properties. HUD notes that section 

2301(d)(1) of HERA conflicts with 

section 301(3) of the URA (42 U.S.C. 

4651) and related regulatory 

requirements at 49 CFR 24.102(d). As 

discussed further, section 2301(d)(1) of 

HERA requires that any acquisition of a 

foreclosed-upon home or residential 

property under NSP be at a discount 

from the current market-appraised value 

of the home or property and that such 

discount shall ensure that purchasers 

are paying below-market value for the 

home or property. Section 301(3) of the 

URA, as implemented at 49 CFR 

24.102(d), provides that an offer of just 

compensation shall not be less than the 

agency’s approved appraisal of the fair 

market value of such property. These 

URA acquisition policies apply to any 

acquisition of real property for a 

federally funded project, except for 

acquisitions described in 49 CFR 

24.101(b)(1) through (5) (commonly 

referred to as ‘‘voluntary acquisitions’’). 

As the more recent and specific 

statutory provision, section 2301(d)(1) 

of HERA prevails over section 301 of the 

URA for purposes of NSP-assisted 

acquisitions of foreclosed-upon homes 

or residential properties. 

NSP Appraisal Requirements. As 

noted above, section 301 of the URA 

does not apply to voluntary 

acquisitions. While the URA and its 

regulations do not require appraisals for 

such acquisitions, the URA acquisition 

policies do not prohibit acquiring 

agencies from obtaining appraisals. 

Appendix A, 49 CFR 24.101(b)(2) 

acknowledges that acquiring agencies 

may still obtain an appraisal to support 

their determination of fair market value. 

Section 2301(d)(1) of HERA requires an 

appraisal for purposes of determining 

the statutory purchase discount. This 

appraisal requirement applies to any 

NSP-assisted acquisition of a foreclosedupon home or residential property 

(including voluntary acquisitions). 

One-for-One Replacement. HUD is 

providing an alternative requirement to 

the one-for-one replacement 

requirements set forth in 42 U.S.C. 

5304(d)(2), as implemented at 24 CFR 

42.375. The Department anticipates a 

large number of requests from grantees 

for whom the requirements will be 

onerous given the pressing rush to 

implement NSP, and several of the 

major housing markets affected by the 

foreclosure crisis have a surplus of 

abandoned and foreclosed-upon 

residential properties. The additional 

workload of reviewing requests under 

42 U.S.C. 5304(d)(3) and 24 CFR 

42.375(d) could cause a substantial 

backlog at HUD and delay NSP program 

operations. Therefore, the alternative 

requirement is that an NSP grantee will 

not be required to meet the 

requirements of 42 U.S.C. 5304(d), as 

implemented at 24 CFR 42.375, to 

provide one-for-one replacement of lowand moderate-income dwelling units 

demolished or converted in connection 

with activities assisted with NSP funds. 

Alternatively, each grantee must submit 

the information described below 

relating to its demolition and 

conversion activities in its action plan 

substantial amendment. The grantee 

will report to HUD and citizens (via 

prominent posting of the DRGR reports 

on the grantee’s official Internet site) on 

progress related to these measures until 

the closeout of its grant with HUD. 

As noted earlier, HUD does not have 

the authority to waive or specify 

alternative requirements to the URA’s 

acquisition policies or relocation 

provisions. Those requirements that do 

not conflict with HERA continue to 

apply. HUD is not specifying alternative 

requirements to the relocation 

assistance provisions at 42 U.S.C. 

5304(d). Guidance on meeting these 

requirements is available on the HUD 

Web site and through local HUD field 

offices. HUD urges grantees to consider 

URA requirements in designing their 

programs and to remember that there are 

URA obligations related to voluntary 

and involuntary property acquisition 

activities, even for vacant and 

abandoned property. HUD reminds 

grantees to be aware of the requirement 

to have and follow a residential 

antidisplacement and relocation plan 

for the CDBG and HOME programs. This 

requirement is not waived for those 

programs and continues to apply to 

activities assisted with regular CDBG 

and HOME funds. 

Requirements 

1. The one-for-one replacement 

requirements at 24 CFR 570.488, 

570.606(c), and 42.375 are waived for 

low- and moderate-income dwelling 

units demolished or converted in 

connection with an activity assisted 

with NSP funds. As an alternative 

requirement to 42 U.S.C. 

5304(d)(2)(A)(i) and (ii), each grantee 

planning to demolish or convert any 

low- and moderate-income dwelling 

units as a result of NSP-assisted 

activities must identify all of the 

following information in its NSP 

substantial amendment: 

(a) The number of low- and moderateincome dwelling units reasonably expected 

to be demolished or converted as a direct 

result of NSP-assisted activities; 

(b) The number of NSP affordable housing 

units (made available to low-, moderate-, and 

middle-income households) reasonably 

expected to be produced, by activity and 

income level as provided for in DRGR, by 

each NSP activity providing such housing 

(including a proposed time schedule for 

commencement and completion); and 

(c) The number of dwelling units 

reasonably expected to be made available for 

households whose income does not exceed 

50 percent of area median income. 

The grantee must also report on actual 

performance for demolitions and 

production, as required elsewhere in 

this notice. 

L. Note on Eminent Domain 

Although section 2303 of HERA 

appears to allow some use of eminent 

domain for public purposes, HUD 

cautions grantees that section 2301(d)(1) 

may effectively ensure that all NSPassisted property acquisitions must be 

voluntary acquisitions as the term is 

defined by the URA and its 

implementing regulations. Section 

2301(d)(1) directs that any purchase of 

a foreclosed-upon home or residential 

property under NSP be at a discount 

from the current market appraised value 

of the home or property and that such 

discount shall ensure that purchasers 

are paying below-market value for the 

home or property. However, the Fifth 

Amendment to the U.S. Constitution 

provides that private property shall not 

be taken for public use without just 

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compensation. The Supreme Court has 

ruled that a jurisdiction must pay fair 

market value for the purchase of 

property through eminent domain. A 

grantee contemplating using NSP funds 

to assist an acquisition involving an 

eminent domain action is advised to 

consult appropriate legal counsel before 

taking action. 

M. Timeliness of Use and Expenditure 

of NSP Funds 

Background 

One of the most critical NSP 

provisions is the HERA requirement at 

section 2301(c)(1) that any grantee 

receiving a grant: 

* * * shall, not later than 18 months after 

the receipt of such amounts, use such 

amounts to purchase and redevelop 

abandoned and foreclosed homes and 

residential properties. 

HUD has defined the term ‘‘use’’ in 

this notice to include obligation of 

funds. 

A further complication is that HERA 

clearly expects grantees to earn program 

income under this grant program. As 

provided under 24 CFR 85.21 for 

entitlements, grantees and subrecipients 

shall disburse program income before 

requesting additional cash withdrawals 

from the U.S. Treasury. States are 

governed similarly by 24 CFR 489(e)(3) 

and 31 CFR part 205. This requirement 

is reflected in the regulations governing 

use of program income by States and 

units of general local government under 

the CDBG program. This means that a 

grantee that successfully and quickly 

deploys its program and generates 

program income may obligate, draw 

down, and expend an amount equal to 

its NSP allocation amount, and still 

have funds remaining in its line of 

credit, possibly subject to recapture at 

the 18-month deadline. 

On consideration, the Department 

chose to implement the use test based 

on whether the state or unit of general 

local government has expended or 

obligated the NSP grant funds and 

program income in an aggregate amount 

at least equal to the NSP allocation. 

HUD is also imposing a deadline for 

expending NSP grant funds because the 

intent of these grants clearly is to 

quickly address an emergency situation 

in areas of the greatest need. 

Requirements 

1. Timely use of NSP funds. At the 

end of the statutory 18-month use 

period, which begins when the NSP 

grantee receives its funds from HUD, the 

state or unit of general local government 

NSP grantee’s accounting records and 

DRGR information must reflect outlays 

(expenditures) and unliquidated 

obligations for approved activities that, 

in the aggregate, are at least equal to the 

NSP allocation. (The DRGR system 

collects information on expenditures 

and obligations.) 

2. Timely expenditure of NSP funds. 

The timely distribution or expenditure 

requirements of sections 24 CFR 

570.494 and 570.902 are waived to the 

extent necessary to allow the following 

alternative requirement: All NSP 

grantees must expend on eligible NSP 

activities an amount equal to or greater 

than the initial allocation of NSP funds 

within 4 years of receipt of those funds 

or HUD will recapture and reallocate the 

amount of funds not expended. 

N. Alternative Requirement for Program 

Income (Revenue) Generated by 

Activities Assisted With Grant Funds 

Requirement 

Revenue received by a state, unit of 

general local government, or 

subrecipient (as defined at 24 CFR 

570.500(c)) that is directly generated 

from the use of CDBG funds (which 

term includes NSP grant funds) 

constitutes CDBG program income. To 

ensure consistency of treatment of such 

revenue, the definition of program 

income at 24 CFR 570.500(a) shall be 

applied to amounts received by states, 

units of general local government, and 

subrecipients. However, Section 

2301(d)(4) imposes certain limitations 

and requirements that necessitate an 

alternative requirement to govern the 

use of program income generated by 

activities carried out pursuant to 

Section 2301(c). The limitations and 

requirements are based on the NSP 

activity that generated the program 

income and on the date the income is 

received. In addition, Section 2301(d)(4) 

requires any revenue from the sale, 

rental, redevelopment, rehabilitation or 

any other eligible use of NSP funds to 

be provided to and used by the state or 

unit of local general government. This 

includes revenue received by a private 

individual or other entity that is not a 

subrecipient. 

1. Program income generated by 

activities carried out pursuant to 

Section 2301(c)(3)(B) and (E). 

a. Program income received before 

July 30, 2013, may be retained by the 

state or unit of general local government 

if it is treated as additional CDBG funds 

and used in accordance with the 

requirements of Section 2301. 

b. Program income received on or 

after July 30, 2013—Return to the 

Treasury. 

Any program income received by a 

state, unit of general local government, 

or subrecipient on or after July 30, 2013, 

that is generated by activities carried out 

pursuant to Section 2301(c)(3)(B) and 

(E) (e.g., proceeds from the sale of rental 

housing by a state, unit of general local 

government, or subrecipient) and is not 

authorized to be retained as described 

below must be remitted to HUD for 

deposit in the Treasury. Any program 

income received by a state, unit of 

general local government, or 

subrecipient on or after July 30, 2013, 

that is generated by activities carried out 

pursuant to Section 2301(c)(3)(B) and 

(E) and that is in excess of the cost to 

acquire and redevelop or rehabilitate an 

abandoned or foreclosed-upon home or 

residential property may be retained if 

HUD approves a request to use the 

funds for other NSP purposes. Note that 

no profit can be earned on the sale of 

an abandoned or foreclosed-upon home 

or residential property to an individual 

as a primary residence; as provided 

under Section 2301(c)(3), the sale must 

be in an amount equal to or less than the 

cost to acquire and redevelop or 

rehabilitate the home or property up to 

a decent, safe, and habitable condition. 

Example: A unit of general local 

government acquires a foreclosed-upon 

multi-family residential property for 

$100,000, spends $100,000 to redevelop the 

property, and sells the property for $225,000. 

If the sale occurs on or after July 30, 2013, 

the amount to be remitted to HUD by the 

state or unit of general government is 

$200,000 if HUD authorizes the profit of 

$25,000 to be used for other NSP purposes, 

or $225,000 if HUD does not authorize such 

use. 

c. Revenue received by a private 

individual or other entity that is not a 

subrecipient. 

i. Any revenue generated by activities 

carried out pursuant to Section 

2301(c)(3)(B) and (E) that is in excess of 

the cost to acquire and redevelop 

(including reasonable development fees) 

or rehabilitate an abandoned or 

foreclosed-upon home or residential 

property must be provided to the state 

or unit of general local government and 

treated as program income. The 

disposition of the program income by 

the state or unit of general local 

government is governed by a. and b. 

above. 

ii. Any revenue that is generated by 

activities carried out pursuant to 

Section 2301(c)(3)(B) and (E) and is 

received on or after July 30, 2013, shall 

be provided to the State or unit of 

general local government and treated as 

program income. The disposition of the 

program income by the state or unit of 

general local government is governed by 

b. above. 

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Example: A unit of general local 

government uses NSP funds to make a loan 

(or grant) to a developer to finance the 

acquisition and rehabilitation of a foreclosedupon multi-family residential property. The 

developer uses $200,000 in NSP funds (loan 

or grant) from the unit of general local 

government to pay the total costs of 

acquisition and rehabilitation (including 

reasonable development fees) and 

subsequently sells the property for $225,000. 

The developer is required to provide 

$225,000 to the unit of general local 

government. (If the NSP funding was a loan, 

the sale proceeds would be used to repay the 

NSP loan.) If the sale occurs on or after July 

30, 2013, the unit of general local 

government must remit $225,000 to HUD for 

deposit in the United States Treasury, unless 

HUD approves a request to use $25,000 of 

that amount for other NSP purposes. If in this 

same example, the developer received 

$100,000 of NSP funding and used $100,000 

of its own funds for eligible costs, the 

revenue to be provided to the local 

government would be $125,000. 

2. Program income generated by 

activities carried out pursuant to 

Section 2301(c)(3)(A), (C) and (E). 

Program income received may be 

retained by the State or unit of general 

local government if it is treated as 

additional CDBG funds and used in 

accordance with the requirements of 

Section 2301. Revenue received by a 

private individual or other entity that is 

not a subrecipient must be returned to 

the State or unit of general local 

government. 

3. Cash management. Substantially all 

program income must be disbursed for 

eligible NSP activities before additional 

cash withdrawals are made from the 

U.S. Treasury. 

4. Agreements with subrecipients and 

other entities. States and units of 

general local governments must 

incorporate in subrecipient agreements 

such provisions as are necessary to 

ensure compliance with the 

requirements of this paragraph, 

including the requirement that program 

income described in N.1.(b) be remitted 

to HUD for deposit in the Treasury. 

States, units of general local 

government, and subrecipients must 

incorporate in agreements with private 

individuals and other entities that are 

not subrecipients such provisions as are 

necessary to ensure compliance with the 

requirements governing disposition of 

revenue generated by activities carried 

out pursuant to Section 2301(c). 

O. Reporting 

Background 

HUD is requiring regular reporting on 

each NSP grant in the DRGR system to 

ensure the Department gets sufficient 

management information to follow-up 

promptly if a grantee lags in 

implementation and risks recapture of 

its grant funds. For NSP only, HUD is 

waiving the annual reporting 

requirements of the consolidated plan to 

allow HUD to collect more regular 

information on various aspects of the 

uses of funds and of the activities 

funded with these grants. HUD will use 

the reports to exercise oversight for 

compliance with the requirements of 

this notice and for prevention of fraud, 

waste, and abuse of funds. 

The regular CDBG performance 

measurement requirements will not 

apply to the NSP funds. To the extent 

feasible, HUD will configure DRGR 

performance measures to fit the NSP 

activities and will provide additional 

guidance on NSP performance 

measures. 

To collect these data elements and to 

meet its reporting requirements, HUD is 

requiring each grantee to report on its 

NSP funds to HUD using the online 

DRGR system, which uses a 

streamlined, Internet-based format. HUD 

will use grantee reports to monitor for 

anomalies or performance problems that 

suggest fraud, waste, and abuse of 

funds; to reconcile budgets, obligations, 

fund draws, and expenditures; to 

calculate applicable administrative and 

public service limitations and the 

overall percent of benefit to LMMI 

persons; and as a basis for risk analysis 

in determining a monitoring plan. 

The grantee must post the NSP report 

on a Web site for its citizens when it 

submits the report to HUD (DRGR 

generates a version of the report that the 

grantee can download, save, and post). 

Requirements 

1. Performance report alternative 

requirement. The Secretary may specify 

the form and timing of reports provided 

by the grantee under both 42 U.S.C. 

5304(e) (the HCD Act) and 42 U.S.C. 

12708 (NAHA). Therefore, the 

consolidated plan regulation at 24 CFR 

91.520 is waived and the alternative 

reporting form and timing for the NSP 

funds is that: 

a. Each grantee must enter its NSP 

Action Plan amendment into HUD’s 

web-based DRGR system in sufficient 

detail to meet the NSP action plan 

content requirements of this notice and 

to serve as the basis for acceptable 

performance reports. (Because DRGR 

was not specifically redesigned for the 

NSP, HUD field staff will provide 

grantees with specific technical 

assistance on where in DRGR the 

required NSP narrative and data 

elements must be placed.) 

b.i. Each grantee must submit a 

quarterly performance report, as HUD 

prescribes, no later than 30 days 

following the end of each quarter, 

beginning 30 days after the completion 

of the first full calendar quarter after 

grant award and continuing until the 

end of the 15th month after initial 

receipt of grant funds. In addition to this 

quarterly performance reporting, each 

grantee will report monthly on its NSP 

obligations and expenditures beginning 

30 days after the end of the 15th month 

following receipt of funds, and 

continuing until reported total 

obligations are equal to or greater than 

the total NSP grant. After HUD has 

accepted a report from a grantee 

showing such obligation of funds, the 

monthly reporting requirement will end 

and quarterly reports will continue until 

all NSP funds (including program 

income) have been expended and those 

expenditures are included in a report to 

HUD, or until HUD issues other 

instructions pursuant to paragraph b.ii. 

below. Each report will include 

information about the uses of funds, 

including, but not limited to, the project 

name, activity, location, national 

objective, funds budgeted and 

expended, the funding source and total 

amount of any non-NSP funds, numbers 

of properties and housing units, 

beginning and ending dates of activities, 

and numbers of low- and moderateincome persons or households 

benefiting. Reports must be submitted 

using HUD’s web-based DRGR system 

and, at the time of submission, be 

posted prominently on the grantee’s 

official Web site. 

ii. During the winter of 2008–2009, 

HUD is undertaking a major 

enhancement of DRGR, initiated as part 

of a series of improvements designed to 

prevent fraud, waste, and abuse of funds 

in the Gulf Coast CDBG disaster 

recovery programs, whose grantees are 

reporting on the uses of more than $19 

billion of CDBG disaster recovery funds 

through DRGR. Prior to roll-out of the 

enhancement, NSP grantees will use the 

Voice Response System (VRS) to access 

the line of credit and will prepare and 

submit action plans and performance 

reports through DRGR. After this 

enhancement is complete, grantees also 

will be able to access their lines of 

credit through DRGR. At that time, HUD 

will issue updated guidance on all 

DRGR reporting and require most 

activity data to be updated on a 

transactional basis. 

P. Note That FHA Properties Are 

Eligible for NSP Acquisition and 

Redevelopment 

The Department notes that it is an 

eligible use of CDBG grant funds to 

acquire and redevelop FHA foreclosed 

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properties. The Department strongly 

urges every community to consider and 

include such properties under their NSP 

programs because the nature and 

location of many of these homes will 

make them very compatible with the 

eligible uses of grant funds, the areas of 

greatest need, and the income eligibility 

thresholds and limits. Furthermore, in 

many areas, FHA foreclosed properties 

will be available for purchase at belowmarket value to meet HERA 

requirements. FHA provides quick 

access to location, condition, and sales 

price information; FHA may also offer 

expedited closing time frames. These 

factors may help expedite NSP fund use. 

HUD will provide technical assistance 

on its Web site regarding how these 

programs can effectively interact. 

Grantees may also contact their local 

HUD FHA field office for further 

information. 

Q. Purchase Discount 

Background 

Section 2301(d)(1) limits the purchase 

price of a foreclosed home, as follows: 

Any purchase of a foreclosed upon home 

or residential property under this section 

shall be at a discount from the current market 

appraised value of the home or property, 

taking into account its current condition, and 

such discount shall ensure that purchasers 

are paying below-market value for the home 

or property. 

To ensure that uncertainty over the 

meaning of this section does not delay 

program implementation, HUD is 

defining ‘‘current market appraised 

value’’ in this notice. For mortgagee 

foreclosed properties, HUD is requiring 

that grantees seek to obtain the 

‘‘maximum reasonable discount’’ from 

the mortgagee, taking into consideration 

likely ‘‘carrying costs’’ of the mortgagee 

if it were to not sell the property to the 

grantee or subrecipient. These likely 

carrying costs are different from market 

to market, and the ‘‘maximum 

reasonable discount’’ is likely to be 

higher in markets where homes are 

taking many months to more than a year 

to sell as compared to markets with 

shorter average time to sell a property. 

In recognition of the need for flexibility 

in administering the purchase discount 

requirement, HUD has adopted an 

approach that requires a minimum 

discount of 5 percent for each 

residential property purchased with 

NSP funds and a minimum average 

discount for all properties acquired with 

NSP funds over the 18-month HERA use 

period. The minimum average discount 

for the ‘‘portfolio’’ of properties 

acquired with NSP funds depends upon 

how the purchase discount for an 

individual property is determined. If the 

state, unit of general local government, 

or subrecipient determines the discount 

through use of a methodology that 

incorporates the factors discussed above 

(keeping in mind that the discount must 

be at least 5 percent), then the minimum 

average discount for the NSP portfolio is 

10 percent. If not, the minimum average 

discount is 15 percent. Recipients and 

subrecipients are cautioned that a 

purchase discount negotiated with the 

seller on an individual property that is 

below the minimum average discount 

requirement must be offset by a 

purchase discount that is above the 

minimum average discount. 

Requirements 

1.a. Individual purchase transaction. 

Each foreclosed-upon home or 

residential property shall be purchased 

at a discount of at least 5 percent from 

the current market-appraised value of 

the home or property. 

b. Purchase transactions in the 

aggregate. Except as set forth below, the 

average purchase discount for all 

properties purchased with NSP funds 

during the 18-month use period shall be 

at least 15 percent. The average 

purchase discount shall be at least 10 

percent if the state, unit of general local 

government, or subrecipient determines 

the maximum reasonable discount for 

each purchase transaction through use 

of a methodology that results in a 

discount equivalent to the total carrying 

costs that would be incurred by the 

seller if the property were not 

purchased with NSP funds (provided 

the discount is at least 5 percent). Such 

methodology shall provide for an 

analysis of the estimated holding period 

for the property and the nature and 

amount of the carrying costs of holding 

the property for this period. Such 

carrying costs shall include, but not be 

limited to: Taxes, insurance, 

maintenance, marketing, overhead, and 

interest. The procedures to implement 

such methodology shall be in writing 

and applied consistently to all 

purchases. The analysis for each 

purchase transaction shall be 

documented in the grantee’s program 

records. 

2. An NSP recipient may not provide 

NSP funds to another party to finance 

an acquisition of tax foreclosed (or any 

other) properties from itself, other than 

to pay necessary and reasonable costs 

related to the appraisal and transfer of 

title. A property conveyed in this 

manner to a subrecipient, homebuyer, 

developer, or jurisdiction will be NSPassisted and subject to all program 

requirements, such as requirements for 

NSP-eligible use and benefit to incomequalified persons. 

3. The address, appraised value, 

purchase offer amount, and discount 

amount of each property purchase must 

be documented in the grantee’s program 

records. 

R. Removal of Annual Requirements 

Requirement 

Throughout 24 CFR parts 91 and 570, 

all references to ‘‘annual’’ requirements 

such as submission of plans and reports 

are waived to the extent necessary to 

allow the provisions of this notice to 

apply to NSP funds, with no recurring 

annual requirements other than those 

related to civil rights and fair housing 

certifications and requirements. 

S. Affirmatively Furthering Fair Housing 

Nothing in this notice may be 

construed as affecting each grantee’s 

responsibility to carry out its 

certification to affirmatively further fair 

housing. HUD encourages each grantee 

to review its analysis of impediments to 

fair housing choice to determine 

whether an update is necessary because 

of current market conditions or other 

factors. 

T. Certifications 

Background 

HUD is substituting alternative 

certifications. The alternative 

certifications are tailored to NSP grants 

and remove certifications and references 

that are appropriate only to the annual 

CDBG formula program. 

Requirements 

Certifications for states and for 

entitlement communities, alternative 

requirement. Although the NSP is being 

implemented as a substantial 

amendment to the current annual action 

plan, HUD is requiring submission of 

this alternative set of certifications as a 

conforming change, reflecting 

alternative requirements and waivers 

under this notice. Each jurisdiction will 

submit the following certifications: 

1. Affirmatively furthering fair 

housing. The jurisdiction certifies that it 

will affirmatively further fair housing, 

which means that it will conduct an 

analysis to identify impediments to fair 

housing choice within the jurisdiction, 

take appropriate actions to overcome the 

effects of any impediments identified 

through that analysis, and maintain 

records reflecting the analysis and 

actions in this regard. 

2. Anti-lobbying. The jurisdiction 

must submit a certification with regard 

to compliance with restrictions on 

lobbying required by 24 CFR part 87, 

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together with disclosure forms, if 

required by that part. 

3. Authority of jurisdiction. The 

jurisdiction certifies that the 

consolidated plan is authorized under 

state and local law (as applicable) and 

that the jurisdiction possesses the legal 

authority to carry out the programs for 

which it is seeking funding, in 

accordance with applicable HUD 

regulations and other program 

requirements. 

4. Consistency with plan. The 

jurisdiction certifies that the housing 

activities to be undertaken with NSP 

funds are consistent with its 

consolidated plan. 

5. Acquisition and relocation. The 

jurisdiction certifies that it will comply 

with the acquisition and relocation 

requirements of the Uniform Relocation 

Assistance and Real Property 

Acquisition Policies Act of 1970, as 

amended (42 U.S.C. 4601), and 

implementing regulations at 49 CFR part 

24, except as those provisions are 

modified by the notice for the NSP 

program published by HUD. 

6. Section 3. The jurisdiction 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 

135. 

7. Citizen participation. The 

jurisdiction certifies that it is in full 

compliance and following a detailed 

citizen participation plan that satisfies 

the requirements of Sections 24 CFR 

91.105 or 91.115, as modified by NSP 

requirements. 

8. Following a plan. The jurisdiction 

certifies it is following a current 

consolidated plan (or Comprehensive 

Housing Affordability Strategy) that has 

been approved by HUD. 

9. Use of funds. The jurisdiction 

certifies that it will comply with Title III 

of Division B of the Housing and 

Economic Recovery Act of 2008 by 

using all of its grant funds within 18 

months of receipt of the grant. 

10. The jurisdiction certifies: 

a. that all of the NSP funds made 

available to it will be used with respect 

to individuals and families whose 

incomes do not exceed 120 percent of 

area median income; and 

b. The jurisdiction will not attempt to 

recover any capital costs of public 

improvements assisted with CDBG 

funds, including Section 108 loan 

guaranteed 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. However, if NSP 

funds are used to pay the proportion of 

a fee or assessment attributable to the 

capital costs of public improvements 

(assisted in part with NSP funds) 

financed from other revenue sources, an 

assessment or charge may be made 

against the property with respect to the 

public improvements financed by a 

source other than CDBG funds. In 

addition, with respect to properties 

owned and occupied by moderateincome (but not low-income) families, 

an assessment or charge may be made 

against the property with respect to the 

public improvements financed by a 

source other than NSP funds if the 

jurisdiction certifies that it lacks NSP or 

CDBG funds to cover the assessment. 

11. Excessive force. The jurisdiction 

certifies that it has adopted and is 

enforcing: 

a. 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 

b. 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. 

12. Compliance with antidiscrimination laws. The jurisdiction 

certifies that the NSP 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. 

13. Compliance with lead-based paint 

procedures. The jurisdiction certifies 

that its activities concerning lead-based 

paint will comply with the requirements 

of part 35, subparts A, B, J, K, and R of 

this title. 

14. Compliance with laws. The 

jurisdiction certifies that it will comply 

with applicable laws. 

U. Note on Statutory Limitation on 

Distribution of Funds 

Section 2304 of HERA states that none 

of the funds made available under this 

Title or title IV shall be distributed to an 

organization that has been indicted for 

a violation under federal law relating to 

an election for federal office; or an 

organization that employs applicable 

individuals. Section 2304 defines 

applicable individuals. 

V. Information Collection Approval 

Note 

HUD has approval from the Office of 

Management and Budget (OMB) for 

information collection requirements in 

accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520). OMB approval is under OMB 

control number 2506–0165. In 

accordance with the Paperwork 

Reduction Act, HUD may not conduct or 

sponsor and a person is not required to 

respond to, a collection of information, 

unless the collection displays a valid 

control number. 

W. Duration of Funding 

The appropriation accounting 

provisions in 31 U.S.C. 1551–1557, 

added by section 1405 of the National 

Defense Authorization Act for Fiscal 

Year 1991 (Pub. L. 101–510), limit the 

availability of certain appropriations for 

expenditure. Such a limitation may not 

be waived. The appropriations acts for 

NSP grants direct that these funds be 

available until expended. However, the 

Department is imposing a shorter 

deadline on the expenditure of NSP 

funds in this notice. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance numbers for grants made 

under NSP are as follows: 14.218; 

14.225; and 14.228. 

Finding of No Significant Impact 

A Finding of No Significant Impact 

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(C)(2)). The 

Finding of No Significant Impact is 

available for public inspection between 

8 a.m. and 5 p.m. weekdays in the 

Office of the Rules Docket Clerk, Office 

of General Counsel, Department of 

Housing and Urban Development, 451 

Seventh Street, SW., Room 10276, 

Washington, DC 20410–0500. 

Establishment of Formula 

I hereby establish the funding formula 

set out in Attachment A to this notice. 

Dated: September 29, 2008. 

Steven C. Preston, 

Secretary. 

Attachment A 

HERA calls for allocating funds ‘‘to 

States and units of general local 

government with the greatest need, as 

such need is determined in the 

discretion of the Secretary based on— 

(A) The number and percentage of 

home foreclosures in each State or unit 

of general local government; 

(B) The number and percentage of 

homes financed by a subprime mortgage 

related loan in each State or unit of 

general local government; and 

(C) The number and percentage of 

homes in default or delinquency in each 

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58344 Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices 

State or unit of general local 

government.’’ 

It further directs that ‘‘each State shall 

receive not less than 0.5 percent of 

funds’’. The allocation formula operates 

as follows. In this formula, the primary 

data on foreclosure rates, subprime loan 

rates, and rates of loans delinquent or in 

default come from the Mortgage Bankers 

Association National Delinquency 

Survey (MBA–NDS). Because the MBA– 

NDS may have uneven coverage from 

state-to-state in respect to the total 

number of mortgages reported, the total 

count of mortgages is calculated as the 

number of owner-occupied mortgages 

from the 2006 American Community 

Survey increased with data from the 

Home Mortgage Disclosure Act to 

capture the proportion of total 

mortgages made within a state made to 

investors between 2004 and 2006. The 

first step of the allocation is to make a 

‘‘statewide’’ allocation using the 

following formula: 

Statewide Allocation = $3.92 billion*

(State’s numbe {[ . * 0 70 r of foreclosure starts in last 6 quarters)*

National number of foreclosure starts in last 6 quarters

( l Percent of all loans in state to enter foreclosure last 6 quarters)

Percent of all loans in nation to enter foreclosure last 6 quarters

State’s number of subprime loans)*

National 

+

0 15 . * (

number of subprime loans

(Percent of all loans in state subprime)

Percent of all loans in nation subprime

(Stat

+

0 10 . * e’s number of loans in default (90+ days delinquent)*

National number of loans in default

(Percent of all loans in state in default)

Percent of all loans in nation in default +

0 05 . * (State’s number of loans 60 to 89 days delinquent)*

National number of loans 60 to 89 days delinquent

(Percent of all loans in state 60 to 89 days delinquent) *

Nationa

]

l percent of all loans 60 to 89 days delinquent

( l Pct of all addresses in state vacant in Census Tracts where more than 40% of the 2004 to 2006 loans were high costs) }

Pct of all addresses in nation vacant in Census Tracts where more than 40% of the 2004 to 2006 loans were high cost

This formula allocates 70 percent of 

the funds based on the number and 

percent of foreclosures, 15 percent for 

subprime loans, 10 percent for loans in 

default (delinquent 90 days or longer), 

and 5 percent for loans delinquent 60 to 

90 days. The higher weight on 

foreclosures is based on the emphasis 

the statute places on targeting foreclosed 

homes. The percentage adjustments, the 

rate of a problem in a state relative to 

the national rate of a problem, are 

restricted such that a state’s allocation 

based on its proportional share of a 

problem cannot be increased or 

decreased by more than 30 percent. 

Because HERA specifically indicates 

that the funds are needed for the 

‘‘redevelopment of abandoned and 

foreclosed upon homes and residential 

properties’’, HUD has included a 

variable to proxy where abandonment of 

homes due to foreclosure is more likely, 

specifically each state’s rate of vacant 

residential addresses in neighborhoods 

with a high proportion (more than 40 

percent) of loans in 2004 to 2006 that 

were high cost. Information on vacant 

addresses is based on United States 

Postal Service data as of June 30, 2008 

aggregated by HUD to the Census Tract 

level. The residential vacancy 

adjustment factor reflects a state’s 

vacancy rate relative to the national 

average and cannot increase or decrease 

a state’s proportional share of the 

allocation based on foreclosures, 

subprime loans, and delinquencies and 

defaults by more than 10 percent. 

Finally, if a statewide allocation is 

less than $19.6 million, the statewide 

grant is increased to $19.6 million. 

Because this approach will result in a 

total allocation in excess of 

appropriation, all grant amounts above 

$19.6 million are reduced pro-rata to 

make the total allocation equal to the 

total appropriation. 

From each statewide allocation, a 

substate allocation is made as follows: 

• Each state government is allocated 

$19.6 million. 

• If the statewide allocation is more 

than $19.6 million, the remaining funds 

are allocated to FY 2008 CDBG 

entitlement cities, urban counties, and 

non-entitlement balance of state 

proportional to relative need. 

• If a local government receives less 

than $2 million under this suballocation, their grant is rolled up into 

the state government grant. 

Note that HUD has determined that 

HERA’s direction that a minimum of 

$19.6 million be allocated to the state 

means that a minimum grant must be 

provided to each state government of 

$19.6 million. As a result, this approach 

provides state governments with 

proportionally more funding than their 

estimated need. As such, state 

governments should use their best 

judgment to serve both those areas not 

receiving a direct grant and those areas 

that do receive a direct grant, making 

sure that the total of all funds in the 

state are going proportionally more to 

those places (as prescribed by HERA): 

• ‘‘With the greatest percentage of 

home foreclosures; 

• With the highest percentage of 

homes financed by a subprime mortgage 

related loan; and 

• Identified by the State or unit of 

general local government as likely to 

face a significant rise in the rate of home 

foreclosures.’’ 

For the amount of funds above each 

state’s $19.6 million, the remaining 

funds are allocated among the 

entitlement communities and nonVerDate Aug<31>2005 18:13 Oct 03, 2008 Jkt 217001 PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 E:\FR\FM\06OCN2.SGM 06OCN2

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entitlement balances using the following 

formula: 

Local Allocation = (Statewide allocation $19,600,000)*

[(

−

Local estimate number of foreclosure starts in last 6 quarters)*

State total number of foreclosure starts in last 6 quarters

(Local vacancy rate in Census Tracts with more than 40% of the loans High-cost)]

State vacancy rate in Census Tracts with more than 40% of the loans High-cost

Where the residential vacancy rate 

adjustment cannot increase or reduced a 

local jurisdiction’s allocation by more 

than 30 percent and the estimated 

number of foreclosures is calculated 

based on a predicted foreclosure rate 

times the estimated number of 

mortgages in a community. HUD 

analysis shows that 75 percent of the 

variance between states on foreclosure 

rates can be explained by three variables 

available from public data: 

• Office of Federal Housing 

Enterprise Oversight (OFHEO) data on 

change in home values as of June 2008 

compared to peak home value since 

2000. 

• Percent of all loans made between 

2004 and 2006 that are high cost as 

reported in the Home Mortgage 

Disclosure Act (HMDA). 

• Unemployment rate as of June 2008 

(from Bureau of Labor Statistics). 

Because these three variables are 

publicly available for all CDBG eligible 

communities and they are good 

predictors of foreclosure risk, they are 

used in a model to calculate the 

estimated number of foreclosures in 

each jurisdiction within a state. The 

formula used is as follows: 

Predicted Foreclosure Rate = ¥2.211 

¥(0.131* Percent change in MSA 

OFHEO current price relative to the 

maximum in past 8 years) 

+(0.152* Percent of total loans made 

between 2004 and 2006 that are 

high cost) 

+(0.392*Percent unemployed in the 

place our county in June 2008). 

This predicted foreclosure rate is then 

multiplied times the estimated number 

of mortgages within a jurisdiction 

(number of HMDA loans made between 

2004 and 2006 times the ratio of ACS 

2006 data on total mortgages in state / 

HMDA loans in state). This ‘‘estimated 

number of mortgages in the 

jurisdiction’’ is further adjusted such 

that the estimated number of 

foreclosures from the model will equal 

the total foreclosure starts in the state 

from the Mortgage Bankers Association 

National Delinquency Survey. 

As noted above, for entitlement cities 

and urban counties that would receive 

an NSP allocation of less than $2 

million, the funds are allocated to the 

state grantee. The District of Columbia 

and the four Insular Areas receive direct 

allocations and are not subject to the 

minimum grant threshold. 

Because this funding is one-time 

funding and the eligible activities under 

the program are different enough from 

the regular program, HUD believes that 

a grantee must receive a minimum 

amount of $2 million to have adequate 

staffing to properly administer the 

program effectively. In addition, fewer 

grants will allow HUD staff to more 

effectively monitor grantees to ensure 

proper implementation of the program 

and reduce the risk for fraud, waste, and 

abuse. 

State Grantee name NSP grant 

amount 

AK ............ ALASKA STATE PROGRAM .................................................................................................................................... $19,600,000 

AL ............. ALABAMA STATE PROGRAM ................................................................................................................................. 37,033,031 

AL ............. BIRMINGHAM ........................................................................................................................................................... 2,580,214 

AL ............. JEFFERSON COUNTY ............................................................................................................................................. 2,237,876 

AR ............ ARKANSAS STATE PROGRAM .............................................................................................................................. 19,600,000 

AZ ............. PHOENIX .................................................................................................................................................................. 39,478,096 

AZ ............. ARIZONA STATE PROGRAM .................................................................................................................................. 38,370,206 

AZ ............. MARICOPA COUNTY ............................................................................................................................................... 9,974,267 

AZ ............. MESA ........................................................................................................................................................................ 9,659,665 

AZ ............. TUCSON ................................................................................................................................................................... 7,286,911 

AZ ............. GLENDALE ............................................................................................................................................................... 6,184,112 

AZ ............. PIMA COUNTY ......................................................................................................................................................... 3,086,867 

AZ ............. AVONDALE CITY ..................................................................................................................................................... 2,466,039 

AZ ............. CHANDLER ............................................................................................................................................................... 2,415,100 

AZ ............. SURPRISE TOWN .................................................................................................................................................... 2,197,786 

CA ............ CALIFORNIA STATE PROGRAM ............................................................................................................................ 145,071,506 

CA ............ RIVERSIDE COUNTY ............................................................................................................................................... 48,567,786 

CA ............ LOS ANGELES ......................................................................................................................................................... 32,860,870 

CA ............ SAN BERNARDINO COUNTY ................................................................................................................................. 22,758,188 

CA ............ SACRAMENTO COUNTY ......................................................................................................................................... 18,605,460 

CA ............ LOS ANGELES COUNTY ......................................................................................................................................... 16,847,672 

CA ............ SACRAMENTO ......................................................................................................................................................... 13,264,829 

CA ............ STOCKTON .............................................................................................................................................................. 12,146,038 

CA ............ MORENO VALLEY ................................................................................................................................................... 11,390,116 

CA ............ KERN COUNTY ........................................................................................................................................................ 11,211,385 

CA ............ FRESNO ................................................................................................................................................................... 10,969,169 


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State Grantee name NSP grant 

amount 

CA ............ STANISLAUS COUNTY ............................................................................................................................................ 9,744,482 

CA ............ SAN DIEGO .............................................................................................................................................................. 9,442,370 

CA ............ SAN JOAQUIN COUNTY ......................................................................................................................................... 9,030,385 

CA ............ BAKERSFIELD .......................................................................................................................................................... 8,982,836 

CA ............ SAN BERNARDINO .................................................................................................................................................. 8,408,558 

CA ............ OAKLAND ................................................................................................................................................................. 8,250,668 

CA ............ MODESTO ................................................................................................................................................................ 8,109,274 

CA ............ PALMDALE ............................................................................................................................................................... 7,434,301 

CA ............ FRESNO COUNTY ................................................................................................................................................... 7,037,465 

CA ............ LANCASTER ............................................................................................................................................................. 6,983,533 

CA ............ RIVERSIDE ............................................................................................................................................................... 6,581,916 

CA ............ CONTRA COSTA COUNTY ..................................................................................................................................... 6,019,051 

CA ............ FONTANA ................................................................................................................................................................. 5,953,309 

CA ............ SANTA ANA .............................................................................................................................................................. 5,795,151 

CA ............ SAN JOSE ................................................................................................................................................................ 5,628,283 

CA ............ RIALTO ..................................................................................................................................................................... 5,461,574 

CA ............ VICTORVILLE ........................................................................................................................................................... 5,311,363 

CA ............ SAN DIEGO COUNTY .............................................................................................................................................. 5,144,152 

CA ............ LONG BEACH ........................................................................................................................................................... 5,070,310 

CA ............ HESPERIA ................................................................................................................................................................ 4,590,719 

CA ............ ANTIOCH .................................................................................................................................................................. 4,049,228 

CA ............ CORONA ................................................................................................................................................................... 3,602,842 

CA ............ POMONA .................................................................................................................................................................. 3,530,825 

CA ............ RICHMOND ............................................................................................................................................................... 3,346,105 

CA ............ ORANGE COUNTY .................................................................................................................................................. 3,285,926 

CA ............ COMPTON ................................................................................................................................................................ 3,242,817 

CA ............ APPLE VALLEY ........................................................................................................................................................ 3,064,836 

CA ............ HEMET ...................................................................................................................................................................... 2,888,473 

CA ............ CHULA VISTA ........................................................................................................................................................... 2,830,072 

CA ............ ONTARIO .................................................................................................................................................................. 2,738,309 

CA ............ VALLEJO ................................................................................................................................................................... 2,657,861 

CA ............ ANAHEIM .................................................................................................................................................................. 2,653,455 

CA ............ ELK GROVE ............................................................................................................................................................. 2,389,651 

CA ............ VISALIA ..................................................................................................................................................................... 2,388,331 

CA ............ RANCHO CUCAMONGA .......................................................................................................................................... 2,133,397 

CA ............ ALAMEDA COUNTY ................................................................................................................................................. 2,126,927 

CO ............ COLORADO STATE PROGRAM ............................................................................................................................. 34,013,566 

CO ............ DENVER ................................................................................................................................................................... 6,060,170 

CO ............ ADAMS COUNTY ..................................................................................................................................................... 4,600,211 

CO ............ AURORA ................................................................................................................................................................... 4,474,097 

CO ............ COLORADO SPRINGS ............................................................................................................................................ 3,904,989 

CT ............ CONNECTICUT STATE PROG ................................................................................................................................ 25,043,385 

DC ............ WASHINGTON .......................................................................................................................................................... 2,836,384 

DE ............ DELAWARE STATE PROGRAM .............................................................................................................................. 19,600,000 

FL ............. FLORIDA STATE PROGRAM .................................................................................................................................. 91,141,478 

FL ............. MIAMI-DADE COUNTY ............................................................................................................................................ 62,207,200 

FL ............. ORANGE COUNTY .................................................................................................................................................. 27,901,773 

FL ............. PALM BEACH COUNTY ........................................................................................................................................... 27,700,340 

FL ............. JACKSONVILLE-DUVAL .......................................................................................................................................... 26,175,317 

FL ............. PASCO COUNTY ..................................................................................................................................................... 19,495,805 

FL ............. HILLSBOROUGH COUNTY ..................................................................................................................................... 19,132,978 

FL ............. LEE COUNTY ........................................................................................................................................................... 18,243,867 

FL ............. BROWARD COUNTY ............................................................................................................................................... 17,767,589 

FL ............. POLK COUNTY ........................................................................................................................................................ 14,586,258 

FL ............. TAMPA ...................................................................................................................................................................... 13,600,915 

FL ............. PORT ST LUCIE ....................................................................................................................................................... 13,523,132 

FL ............. MIAMI ........................................................................................................................................................................ 12,063,702 

FL ............. ST PETERSBURG .................................................................................................................................................... 9,498,962 

FL ............. MIRAMAR ................................................................................................................................................................. 9,312,658 

FL ............. PINELLAS COUNTY ................................................................................................................................................. 8,063,759 

FL ............. HOLLYWOOD ........................................................................................................................................................... 7,534,603 

FL ............. COLLIER COUNTY ................................................................................................................................................... 7,306,755 

FL ............. SARASOTA COUNTY .............................................................................................................................................. 7,140,861 

FL ............. CAPE CORAL ........................................................................................................................................................... 7,065,484 

FL ............. SEMINOLE COUNTY ............................................................................................................................................... 7,019,514 

FL ............. MIAMI GARDENS CITY ............................................................................................................................................ 6,866,119 

FL ............. ORLANDO ................................................................................................................................................................. 6,730,263 

FL ............. DELTONA ................................................................................................................................................................. 6,635,909 

FL ............. MARION COUNTY .................................................................................................................................................... 6,324,055 

FL ............. HIALEAH ................................................................................................................................................................... 5,385,046 

FL ............. MANATEE COUNTY ................................................................................................................................................. 5,283,122 

FL ............. BREVARD COUNTY ................................................................................................................................................. 5,269,667 

FL ............. VOLUSIA COUNTY .................................................................................................................................................. 5,222,831 

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State Grantee name NSP grant 

amount 

FL ............. PALM BAY ................................................................................................................................................................ 5,208,104 

FL ............. TAMARAC ................................................................................................................................................................. 4,772,218 

FL ............. ESCAMBIA COUNTY ............................................................................................................................................... 4,565,918 

FL ............. PEMBROKE PINES .................................................................................................................................................. 4,398,575 

FL ............. POMPANO BEACH .................................................................................................................................................. 4,366,157 

FL ............. WEST PALM BEACH ............................................................................................................................................... 4,349,546 

FL ............. LAUDERHILL ............................................................................................................................................................ 4,293,288 

FL ............. FT LAUDERDALE ..................................................................................................................................................... 3,700,096 

FL ............. SUNRISE .................................................................................................................................................................. 3,494,986 

FL ............. CORAL SPRINGS ..................................................................................................................................................... 3,378,142 

FL ............. LAKE COUNTY ......................................................................................................................................................... 3,136,967 

FL ............. BOYNTON BEACH ................................................................................................................................................... 2,963,311 

FL ............. HOMESTEAD CITY .................................................................................................................................................. 2,887,010 

FL ............. NORTH MIAMI .......................................................................................................................................................... 2,847,089 

FL ............. KISSIMMEE .............................................................................................................................................................. 2,371,749 

FL ............. FT MYERS ................................................................................................................................................................ 2,297,318 

FL ............. MARGATE ................................................................................................................................................................. 2,106,555 

FL ............. PLANTATION ............................................................................................................................................................ 2,016,309 

FL ............. LAKELAND ................................................................................................................................................................ 2,005,781 

FL ............. DEERFIELD BEACH ................................................................................................................................................. 2,005,699 

GA ............ GEORGIA STATE PROGRAM ................................................................................................................................. 77,085,125 

GA ............ DE KALB COUNTY ................................................................................................................................................... 18,545,013 

GA ............ ATLANTA .................................................................................................................................................................. 12,316,082 

GA ............ GWINNETT COUNTY ............................................................................................................................................... 10,507,827 

GA ............ FULTON COUNTY .................................................................................................................................................... 10,333,410 

GA ............ CLAYTON COUNTY ................................................................................................................................................. 9,732,126 

GA ............ COBB COUNTY ........................................................................................................................................................ 6,889,134 

GA ............ COLUMBUS-MUSCOGEE ........................................................................................................................................ 3,117,039 

GA ............ AUGUSTA ................................................................................................................................................................. 2,473,064 

GA ............ SAVANNAH ............................................................................................................................................................... 2,038,631 

HI .............. HAWAII STATE PROGRAM ..................................................................................................................................... 19,600,000 

IA .............. IOWA STATE PROGRAM ........................................................................................................................................ 21,607,197 

ID .............. IDAHO STATE PROGRAM ...................................................................................................................................... 19,600,000 

IL .............. CHICAGO .................................................................................................................................................................. 55,238,017 

IL .............. ILLINOIS STATE PROGRAM ................................................................................................................................... 53,113,044 

IL .............. COOK COUNTY ....................................................................................................................................................... 28,156,321 

IL .............. DU PAGE COUNTY .................................................................................................................................................. 5,176,438 

IL .............. WILL COUNTY .......................................................................................................................................................... 5,160,424 

IL .............. LAKE COUNTY ......................................................................................................................................................... 4,600,800 

IL .............. JOLIET ...................................................................................................................................................................... 3,531,810 

IL .............. MCCHENRY COUNTY ............................................................................................................................................. 3,085,695 

IL .............. AURORA ................................................................................................................................................................... 3,083,568 

IL .............. KANE COUNTY ........................................................................................................................................................ 2,576,369 

IL .............. ROCKFORD .............................................................................................................................................................. 2,287,004 

IL .............. ST CLAIR COUNTY .................................................................................................................................................. 2,262,015 

IL .............. ELGIN ........................................................................................................................................................................ 2,159,623 

IL .............. CICERO .................................................................................................................................................................... 2,078,351 

IN .............. INDIANA STATE PROGRAM ................................................................................................................................... 83,757,048 

IN .............. INDIANAPOLIS ......................................................................................................................................................... 29,051,059 

IN .............. FORT WAYNE .......................................................................................................................................................... 7,063,956 

IN .............. LAKE COUNTY ......................................................................................................................................................... 5,738,024 

IN .............. SOUTH BEND ........................................................................................................................................................... 4,098,521 

IN .............. HAMMOND ............................................................................................................................................................... 3,860,473 

IN .............. GARY ........................................................................................................................................................................ 3,836,758 

IN .............. EVANSVILLE ............................................................................................................................................................ 3,605,204 

IN .............. HAMILTON COUNTY ............................................................................................................................................... 2,343,868 

IN .............. ELKHART .................................................................................................................................................................. 2,251,346 

IN .............. KOKOMO .................................................................................................................................................................. 2,181,088 

IN .............. ANDERSON .............................................................................................................................................................. 2,141,795 

IN .............. MUNCIE .................................................................................................................................................................... 2,007,356 

KS ............ KANSAS STATE PROGRAM ................................................................................................................................... 20,970,242 

KY ............ KENTUCKY STATE PROGRAM .............................................................................................................................. 37,408,788 

KY ............ LOUISVILLE .............................................................................................................................................................. 6,973,721 

LA ............. LOUISIANA STATE PROGRAM ............................................................................................................................... 34,183,994 

LA ............. BATON ROUGE ........................................................................................................................................................ 2,308,848 

LA ............. NEW ORLEANS ........................................................................................................................................................ 2,302,208 

MA ............ MASSACHUSETTS STATE PROG .......................................................................................................................... 43,466,030 

MA ............ BOSTON ................................................................................................................................................................... 4,230,191 

MA ............ SPRINGFIELD .......................................................................................................................................................... 2,566,272 

MA ............ WORCESTER ........................................................................................................................................................... 2,390,858 

MA ............ BROCKTON .............................................................................................................................................................. 2,152,979 

MD ............ MARYLAND STATE PROGRAM .............................................................................................................................. 28,778,469 

MD ............ PRINCE GEORGES COUNTY ................................................................................................................................. 10,883,234 

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State Grantee name NSP grant 

amount 

MD ............ BALTIMORE .............................................................................................................................................................. 4,112,239 

MD ............ BALTIMORE COUNTY ............................................................................................................................................. 2,596,880 

ME ............ MAINE STATE PROGRAM ...................................................................................................................................... 19,600,000 

MI ............. MICHIGAN STATE PROGRAM ................................................................................................................................ 98,653,915 

MI ............. DETROIT ................................................................................................................................................................... 47,137,690 

MI ............. WAYNE COUNTY ..................................................................................................................................................... 25,909,153 

MI ............. OAKLAND COUNTY ................................................................................................................................................. 17,383,776 

MI ............. MACOMB COUNTY .................................................................................................................................................. 9,765,375 

MI ............. GENESEE COUNTY ................................................................................................................................................. 7,506,343 

MI ............. GRAND RAPIDS ....................................................................................................................................................... 6,187,686 

MI ............. LANSING ................................................................................................................................................................... 5,992,160 

MI ............. WARREN .................................................................................................................................................................. 5,829,447 

MI ............. FLINT ........................................................................................................................................................................ 4,224,621 

MI ............. KENT COUNTY ........................................................................................................................................................ 3,912,796 

MI ............. PONTIAC .................................................................................................................................................................. 3,542,002 

MI ............. SOUTHFIELD ............................................................................................................................................................ 3,241,457 

MI ............. REDFORD ................................................................................................................................................................. 3,041,364 

MI ............. WASHTENAW COUNTY .......................................................................................................................................... 3,024,719 

MI ............. TAYLOR .................................................................................................................................................................... 2,495,056 

MI ............. STERLING HEIGHTS ............................................................................................................................................... 2,454,961 

MI ............. DEARBORN .............................................................................................................................................................. 2,436,246 

MI ............. LINCOLN PARK ........................................................................................................................................................ 2,417,688 

MI ............. CANTON TWP .......................................................................................................................................................... 2,182,988 

MI ............. CLINTON TWP ......................................................................................................................................................... 2,147,608 

MI ............. WESTLAND .............................................................................................................................................................. 2,061,722 

MI ............. WATERFORD TOWNSHIP ....................................................................................................................................... 2,014,489 

MN ............ MINNESOTA STATE PROGRAM ............................................................................................................................ 38,849,929 

MN ............ MINNEAPOLIS .......................................................................................................................................................... 5,601,967 

MN ............ ST PAUL ................................................................................................................................................................... 4,302,249 

MN ............ HENNEPIN COUNTY ............................................................................................................................................... 3,885,729 

MN ............ DAKOTA COUNTY ................................................................................................................................................... 2,765,991 

MN ............ ANOKA COUNTY ..................................................................................................................................................... 2,377,310 

MO ........... MISSOURI STATE PROGRAM ................................................................................................................................ 42,664,187 

MO ........... ST LOUIS COUNTY ................................................................................................................................................. 9,338,562 

MO ........... KANSAS CITY .......................................................................................................................................................... 7,323,734 

MO ........... ST LOUIS .................................................................................................................................................................. 5,532,792 

MS ............ MISSISSIPPI STATE PROG .................................................................................................................................... 43,151,914 

MS ............ JACKSON ................................................................................................................................................................. 3,116,049 

MT ............ MONTANA STATE PROGRAM ................................................................................................................................ 19,600,000 

NC ............ NORTH CAROLINA STA PROG .............................................................................................................................. 52,303,004 

NC ............ CHARLOTTE ............................................................................................................................................................. 5,431,777 

ND ............ NORTH DAKOTA STATE PROG ............................................................................................................................. 19,600,000 

NE ............ NEBRASKA STATE PROGRAM .............................................................................................................................. 19,600,000 

NH ............ NEW HAMPSHIRE STATE PROG ........................................................................................................................... 19,600,000 

NJ ............. NEW JERSEY STATE PROGRAM .......................................................................................................................... 51,470,620 

NJ ............. NEWARK ................................................................................................................................................................... 3,406,849 

NJ ............. UNION COUNTY ...................................................................................................................................................... 2,601,755 

NJ ............. PATERSON ............................................................................................................................................................... 2,266,641 

NJ ............. JERSEY CITY ........................................................................................................................................................... 2,153,431 

NJ ............. BERGEN COUNTY ................................................................................................................................................... 2,096,194 

NM ............ NEW MEXICO STATE PROGRAM .......................................................................................................................... 19,600,000 

NV ............ NEVADA STATE PROGRAM ................................................................................................................................... 24,287,240 

NV ............ CLARK COUNTY ...................................................................................................................................................... 22,829,062 

NV ............ LAS VEGAS .............................................................................................................................................................. 14,775,270 

NV ............ NORTH LAS VEGAS ................................................................................................................................................ 6,837,736 

NV ............ HENDERSON ........................................................................................................................................................... 3,205,044 

NY ............ NEW YORK STATE PROGRAM .............................................................................................................................. 54,556,464 

NY ............ NEW YORK CITY ..................................................................................................................................................... 24,257,740 

NY ............ NASSAU COUNTY ................................................................................................................................................... 7,767,916 

NY ............ SUFFOLK COUNTY ................................................................................................................................................. 5,681,443 

NY ............ ISLIP TOWN ............................................................................................................................................................. 3,720,392 

NY ............ BABYLON TOWN ..................................................................................................................................................... 2,170,909 

NY ............ ORANGE COUNTY .................................................................................................................................................. 2,163,744 

OH ............ OHIO STATE PROGRAM ......................................................................................................................................... 116,859,223 

OH ............ COLUMBUS .............................................................................................................................................................. 22,845,495 

OH ............ CLEVELAND ............................................................................................................................................................. 16,143,120 

OH ............ TOLEDO .................................................................................................................................................................... 12,270,706 

OH ............ CUYAHOGA COUNTY ............................................................................................................................................. 11,212,447 

OH ............ AKRON ...................................................................................................................................................................... 8,583,492 

OH ............ CINCINNATI .............................................................................................................................................................. 8,361,592 

OH ............ HAMILTON COUNTY ............................................................................................................................................... 7,970,490 

OH ............ MONTGOMERY COUNTY ....................................................................................................................................... 5,988,000 

OH ............ DAYTON ................................................................................................................................................................... 5,582,902 

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State Grantee name NSP grant 

amount 

OH ............ FRANKLIN COUNTY ................................................................................................................................................ 5,439,664 

OH ............ BUTLER COUNTY .................................................................................................................................................... 4,213,742 

OH ............ STARK COUNTY ...................................................................................................................................................... 4,181,673 

OH ............ SUMMIT COUNTY .................................................................................................................................................... 3,767,144 

OH ............ CANTON ................................................................................................................................................................... 3,678,562 

OH ............ LAKE COUNTY ......................................................................................................................................................... 3,402,859 

OH ............ LORAIN ..................................................................................................................................................................... 3,031,480 

OH ............ YOUNGSTOWN ........................................................................................................................................................ 2,708,206 

OH ............ EUCLID ..................................................................................................................................................................... 2,580,464 

OH ............ ELYRIA ...................................................................................................................................................................... 2,468,215 

OH ............ HAMILTON CITY ...................................................................................................................................................... 2,385,315 

OH ............ SPRINGFIELD .......................................................................................................................................................... 2,270,009 

OH ............ MIDDLETOWN .......................................................................................................................................................... 2,144,379 

OK ............ OKLAHOMA STATE PROGRAM ............................................................................................................................. 29,969,459 

OK ............ OKLAHOMA CITY ..................................................................................................................................................... 2,882,282 

OR ............ OREGON STATE PROGRAM .................................................................................................................................. 19,600,000 

PA ............ PENNSYLVANIA STATE PROG .............................................................................................................................. 59,631,318 

PA ............ PHILADELPHIA ......................................................................................................................................................... 16,832,873 

PA ............ ALLEGHENY COUNTY ............................................................................................................................................ 5,524,950 

PA ............ ALLENTOWN ............................................................................................................................................................ 2,113,456 

PA ............ YORK COUNTY ........................................................................................................................................................ 2,017,253 

PA ............ PITTSBURGH ........................................................................................................................................................... 2,002,958 

PR ............ PUERTO RICO STATE PROG ................................................................................................................................. 19,600,000 

RI .............. RHODE ISLAND STATE PROG ............................................................................................................................... 19,600,000 

SC ............ SOUTH CAROLINA STA PROG .............................................................................................................................. 44,673,692 

SC ............ GREENVILLE COUNTY ........................................................................................................................................... 2,262,856 

SC ............ RICHLAND COUNTY ................................................................................................................................................ 2,221,859 

SD ............ SOUTH DAKOTA STATE PROG ............................................................................................................................. 19,600,000 

TN ............ TENNESSEE STATE PROGRAM ............................................................................................................................ 49,360,421 

TN ............ MEMPHIS .................................................................................................................................................................. 11,506,415 

TN ............ NASHVILLE-DAVIDSON ........................................................................................................................................... 4,051,398 

TN ............ SHELBY COUNTY .................................................................................................................................................... 2,752,708 

TN ............ KNOXVILLE .............................................................................................................................................................. 2,735,980 

TN ............ CHATTANOOGA ....................................................................................................................................................... 2,113,727 

TX ............. TEXAS STATE PROGRAM ...................................................................................................................................... 101,996,848 

TX ............. HARRIS COUNTY .................................................................................................................................................... 14,898,027 

TX ............. HOUSTON ................................................................................................................................................................ 13,542,193 

TX ............. SAN ANTONIO ......................................................................................................................................................... 8,635,899 

TX ............. DALLAS ..................................................................................................................................................................... 7,932,555 

TX ............. FORT WORTH .......................................................................................................................................................... 6,307,433 

TX ............. DALLAS COUNTY .................................................................................................................................................... 4,405,482 

TX ............. TARRANT COUNTY ................................................................................................................................................. 3,293,388 

TX ............. EL PASO ................................................................................................................................................................... 3,032,465 

TX ............. HIDALGO COUNTY .................................................................................................................................................. 2,867,057 

TX ............. FORT BEND COUNTY ............................................................................................................................................. 2,796,177 

TX ............. GRAND PRAIRIE ...................................................................................................................................................... 2,267,290 

TX ............. MESQUITE ................................................................................................................................................................ 2,083,933 

TX ............. ARLINGTON ............................................................................................................................................................. 2,044,254 

TX ............. GARLAND ................................................................................................................................................................. 2,040,196 

UT ............ UTAH STATE PROGRAM ........................................................................................................................................ 19,600,000 

VA ............ VIRGINIA STATE PROGRAM .................................................................................................................................. 38,749,931 

VA ............ PRINCE WILLIAM COUNTY .................................................................................................................................... 4,134,612 

VA ............ FAIRFAX COUNTY ................................................................................................................................................... 2,807,300 

VT ............. VERMONT STATE PROGRAM ................................................................................................................................ 19,600,000 

WA ........... WASHINGTON STATE PROGRAM ......................................................................................................................... 28,159,293 

WI ............. WISCONSIN STATE PROGRAM ............................................................................................................................. 38,779,123 

WI ............. MILWAUKEE ............................................................................................................................................................. 9,197,465 

WV ........... WEST VIRGINIA STATE PROG .............................................................................................................................. 19,600,000 

WY ........... WYOMING STATE PROGRAM ................................................................................................................................ 19,600,000 

XX ............ INSULAR AREAS ..................................................................................................................................................... 1,144,289 

[FR Doc. E8–23476 Filed 10–3–08; 8:45 am] 

BILLING CODE 4210–67–P 

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