81 FR 7567 - Additional Clarifying Guidance, Waivers and Alternative Requirements for Grantees in Receipt of Community Development Block Grant Disaster Recovery Funds Under Public Law 113-2 for the Submission of Expenditure Deadline Extension Requests and Urgent Need Certification Extensions and for the Provision of Interim Mortgage Assistance by the State of New York

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 81, Issue 29 (February 12, 2016)

This notice provides additional clarifying guidance for all Community Development Block Grant Disaster Recovery (CDBG-DR) grantees in receipt of funds under the Disaster Relief Appropriations Act, 2013 (the Appropriations Act), with regard to the submission of requests for an extension of the 2-year expenditure deadline established for funds provided under the Appropriations Act and the continued use of the alternative urgent need national objective. This notice also provides an alternative requirement for New York State as a grantee in receipt of CDBG-DR funds under the Appropriations Act. This alternative requirement addresses the period of time in which interim mortgage assistance may be provided to beneficiaries in the State's housing recovery programs.

[Federal Register Volume 81, Number 29 (Friday, February 12, 2016)]
[Notices]
[Pages 7567-7569]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02913]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5696-N-18]


Additional Clarifying Guidance, Waivers and Alternative 
Requirements for Grantees in Receipt of Community Development Block 
Grant Disaster Recovery Funds Under Public Law 113-2 for the Submission 
of Expenditure Deadline Extension Requests and Urgent Need 
Certification Extensions and for the Provision of Interim Mortgage 
Assistance by the State of New York

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice.

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SUMMARY: This notice provides additional clarifying guidance for all 
Community Development Block Grant Disaster Recovery (CDBG-DR) grantees 
in receipt of funds under the Disaster Relief Appropriations Act, 2013 
(the Appropriations Act), with regard to the submission of requests for 
an extension of the 2-year expenditure deadline established for funds 
provided under the Appropriations Act and the continued use of the 
alternative urgent need national objective. This notice also provides 
an alternative requirement for New York State as a grantee in receipt 
of CDBG-DR funds under the Appropriations Act. This alternative 
requirement addresses the period of time in which interim mortgage 
assistance may be provided to beneficiaries in the State's housing 
recovery programs.

DATES: Effective Date: February 17, 2016.

FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, Office of 
Block Grant Assistance, Department of Housing and Urban Development, 
451 7th 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 Relay Service at 800-877-
8339. Facsimile inquiries may be sent to Mr. Gimont at 202-401-2044. 
(Except for the ``800'' number, these telephone numbers are not toll-
free.) Email inquiries may be sent to [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
III. Catalog of Federal Domestic Assistance
IV. Finding of No Significant Impact

I. Background

    The Appropriations Act (Pub. L. 113-2, approved January 29, 2013) 
made available $16 billion in CDBG-DR funds for necessary expenses 
related to disaster relief, long-term recovery, restoration of 
infrastructure and housing, and economic revitalization in the most 
impacted and distressed areas, resulting from a major disaster declared 
pursuant to the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act of 1974 (42 U.S.C. 5121 et. seq.) (Stafford Act) due to 
Hurricane Sandy and other eligible events in calendar years 2011, 2012, 
and 2013. On March 1, 2013, the President issued a sequestration order 
pursuant to section 251A of the Balanced Budget and Emergency Deficit 
Control Act, as amended (2 U.S.C. 901a), and reduced the amount of 
funding for CDBG-DR grants under the Appropriations Act to $15.18 
billion. To date, a total of $15.18 billion has been allocated or set 
aside: $13 billion in response to Hurricane Sandy, $514 million in 
response to disasters occurring in 2011 or 2012, $655 million in 
response to 2013 disasters, and $1 billion set aside for the National 
Disaster Resilience Competition.
    This notice applies to all CDBG-DR grantees in receipt of 
allocations under the Appropriations Act, which are described within 
the Federal Register notices published by the Department on March 5, 
2013 (78 FR 14329), April 19, 2013 (78 FR 23578), May 29, 2013 (78 FR 
32262), August 2, 2013 (78 FR 46999), November 18, 2013 (78 FR 69104), 
December 16, 2013 (78 FR 76154), March 27, 2014 (79 FR 17173), June 3, 
2014 (79 FR 31964), July 11, 2014 (79 FR 40133), October 7, 2014 (79 FR 
60490), October 16, 2014 (79 FR 62182), January 8, 2015 (80 FR 1039), 
April 2, 2015 (80 FR 17772), May 11, 2015 (80 FR 26942), August 25, 
2015 (80 FR 51589), and November 18, 2015 (80 FR 72102), referred to 
collectively in this notice as the ``prior notices.'' The requirements 
of the prior notices continue to apply, except as modified by this 
notice.\1\
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    \1\ Links to the prior notices, the text of the Appropriations 
Act, and additional guidance prepared by the Department for CDBG-DR 
grants, are available on the HUD Exchange Web site: https://www.hudexchange.info/cdbg-dr/cdbg-dr-laws-regulations-and-federal-register-notices/.
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II. Applicable Rules (Including Clarifying Guidance), Statutes, 
Waivers, and Alternative Requirements

    The Appropriations Act authorizes the Secretary to waive, or 
specify alternative requirements for, any provision of any statute or 
regulation that the Secretary administers in connection with HUD's 
obligation, or use by the recipient, of these funds (except for 
requirements related to fair housing, nondiscrimination, labor 
standards, and the environment). Waivers and alternative requirements 
are based upon a determination by the Secretary that good cause exists 
and that the waiver or alternative requirement is not inconsistent with 
the overall purposes of title I of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5301 et seq.) (HCD Act). Regulatory 
waiver authority is also provided by 24 CFR 5.110, 91.600, and 570.5.
    For the waivers and alternative requirements described in this 
notice, the Secretary has determined that good cause exists and that 
the waiver and alternative requirements are not inconsistent with the 
overall purpose of the HCD Act. Grantees may request waivers and 
alternative requirements from the Department as needed to address 
specific needs related to their recovery activities. Under the 
requirements of the Appropriations Act, waivers must be published in 
the Federal Register at least 5 days before the effective date of such 
waiver.
    1. Timeline for the submission of expenditure deadline extension 
requests. The Appropriations Act requires the Department to obligate 
all funds provided under the Appropriations Act by September 30, 2017, 
and requires grantees to expend funds within 24-months of the date on 
which the Department obligates funds to a grantee. The Appropriations 
Act also authorizes the Office of Management and Budget (OMB) to grant 
waivers of the 24-month expenditure deadline.

[[Page 7568]]

OMB authorized the Department to provide CDBG-DR grantees with 
expenditure deadline extensions for activities that are inherently 
long-term and where it would be impracticable to expend funds within 
the 24-month period and still achieve program missions, up to amounts 
approved by OMB. In the Federal Register notice published on May 11, 
2015, (80 FR 26942), the Department established the process and 
criteria for the submission of expenditure deadline extension requests 
for CDBG-DR grantees in receipt of funds under the Appropriations Act. 
The May 11, 2015, notice requires these grantees to submit requests for 
the extension of an expenditure deadline at least 120 calendar days in 
advance of the expenditure deadline (80 FR 26944). Since the May 11, 
2015, notice was published, the Department subsequently received, 
reviewed, and acted upon expenditure deadline extension requests from a 
number of CDBG-DR grantees in receipt of funds under the Appropriations 
Act. In some instances, the Department observed that events and 
circumstances beyond the control of the grantee may require grantees to 
request an extension of an expenditure deadline after the 120-calendar-
day deadline has passed. The Department is therefore amending this 
requirement of the May 11, 2015, notice to provide that a grantee 
``submits the completed CDBG-DR Expenditure Deadline Extension Request 
template and any attachments to HUD in order to request consideration 
of the extension request at least 120 calendar days in advance of the 
expenditure deadline on the funds (or 60 days for funds expiring in 
calendar year 2015). HUD may, however, also accept requests from CDBG-
DR grantees for the extension of an expenditure deadline less than 120 
calendar days in advance of the deadline upon receipt of a letter from 
the chief executive officer of the grantee requesting the extension and 
a demonstration by the grantee that the request is required in order to 
achieve program missions. Grantees are advised however, that time 
constraints may not permit HUD to act upon requests that are received 
in close proximity to an expenditure deadline.''
    2. Urgent need national objective certification requirements. The 
March 5, 2013, notice (78 FR 14329) provided grantees receiving funds 
under the Appropriations Act with a waiver of the certification 
requirements for the documentation of the urgent need national 
objective, located at Sec. Sec.  570.208(c) and 570.483(d), until 2 
years after the date the Department obligates funds to a grantee. The 
May 11, 2015, notice allowed grantees seeking a waiver of an 
expenditure deadline to simultaneously seek an extension of the urgent 
need certification waiver. The extension of the urgent need 
certification waiver, however, is currently only effective after its 
publication in the Federal Register. This approach presents challenges 
for CDBG-DR grantees who receive an extension of an expenditure 
deadline for an activity associated with the urgent need certification, 
with the extended expenditure deadline in effect but with the urgent 
need certification waiver still requiring publication in the Federal 
Register.
    To accommodate the timely expenditure of funds, HUD is modifying 
the temporary, streamlined urgent need waiver and alternative 
requirement in paragraph VI.A.1.f. of the March 5, 2013, notice (78 FR 
14336). This waiver and alternative requirement supersedes the 
information published in the May 11, 2015, notice and will allow 
grantees to more effectively implement urgent recovery activities by 
aligning the applicable urgent need national objective criteria with 
the expenditure deadline on the use of funds. The March 5, 2013, notice 
is modified to add the following alternative requirement for grantees 
that receive an extension of the expenditure deadline: For activities 
designed to respond to a disaster-related impact that poses a serious 
and immediate threat to the health or welfare of the community, the 
grantee may continue to use the urgent need national objective until 
the end of the new expenditure deadline if the grantee meets the 
following requirements from the March 5, 2013, notice: (1) Before 
seeking the expenditure deadline extension, the grantee must reference 
in its Action Plan the type, scale, and location of the disaster-
related impacts addressed by each program and/or activity that will 
meet the urgent need national objective; (2) before seeking the 
expenditure deadline extension, the grantee must identify these 
disaster related impacts in its Action Plan needs assessment; (3) the 
needs assessment must be updated as new or more detailed/accurate 
disaster-related impacts are known; and (4) the grantee must document 
how all programs and/or activities funded under the urgent need 
national objective respond to a disaster-related impact identified by 
the grantee.
    3. Alternative requirement to permit extended time for the 
provision of interim mortgage assistance (State of New York only). In 
the Federal Register notice published on March 5, 2013, the Department 
established an alternative requirement to 42 U.S.C. 5305(a)(8) to 
extend the authority of grantees under the Appropriations Act to 
provide interim mortgage assistance to qualified individuals from 3 
months to up to 20 months (78 FR 14345). A grantee using this 
alternative requirement is required to document in its policies and 
procedures how it will determine the amount of assistance to be 
provided is necessary and reasonable. The State of New York has 
requested a modification of the 20-month limitation on the provision of 
interim mortgage assistance to authorize the assistance for a period of 
up to 36 months.
    Under the State's existing Interim Mortgage Assistance (IMA) 
program, financial assistance is available to eligible applicants to 
the NY Rising Housing Recovery Program who demonstrate financial 
difficulty in paying their mortgage due to additional housing expenses 
incurred as a result of their primary residence no longer being 
habitable. Interim mortgage assistance may be provided for past, 
current, and future debt obligations of the mortgage, capped at $3,000 
per month for a maximum of 20 months or $60,000.
    On November 15, 2013, the Department approved Amendment 4 to the 
State's disaster recovery Action Plan to allocate $80,000,000 to the 
initial State IMA program. On May 27, 2014, the Department approved 
Amendment 6 to the State's disaster recovery Action Plan to modify the 
calculation of the IMA grant award based on a participant's monthly 
mortgage amount for their primary residence and proof of an additional 
housing payment. On April 13, 2014, the Department approved Amendment 8 
to the State's disaster recovery Action Plan to enable the State to 
calculate partial IMA grant awards that reflect rental housing expenses 
incurred by participants while displaced, less any rental assistance 
received from insurance or government agencies.
    At the time the State submitted a request for a modification of the 
alternative requirement, 454 program participants were receiving IMA 
assistance and approximately 25 percent of those participants were low- 
and moderate-income households. In its request for a modification of 
the alternative requirement, the State indicated that in the absence of 
additional time to provide assistance, 287 IMA recipients would no 
longer qualify for IMA funds within the succeeding 12 months and that 
26 percent of those recipients were low- and moderate-income 
households. In its

[[Page 7569]]

request to provide IMA payments for a period of up to 36 months, the 
State cited a number of unanticipated developments that contributed to 
delays in the completion of assisted housing projects. Most notably, 
the State pointed to the prospect of increased National Flood Insurance 
Program (NFIP) claim payments to NY Rising program participants as a 
result of fraudulent damage assessments conducted on behalf of the NFIP 
in the immediate aftermath of the disaster. The State indicated that 
uncertainty surrounding these payments, and the potential impact of the 
payments on the amount of CDBG-DR funds ultimately available to the 
homeowner, contributed to delays and supports an extended period of 
availability for IMA. Other factors cited by the State as contributing 
to the need for extended IMA are the limited pool of contractors 
experienced in undertaking the elevation of homes and the shorter 
Northeastern United States construction season. The State further noted 
that its own clarification process, through which applicants may appeal 
the ultimate amount of their CDBG-DR award, can also slow progress in 
completing repairs and contribute to the need for additional IMA.
    The State proposed to implement the extended period for IMA by 
initially maintaining the current 20 months of assistance for IMA 
participants. At the end of the 20-month period of assistance, the 
State may subsequently determine a need for an additional 16 months of 
IMA, for a total not to exceed 36 months of assistance. When a need for 
an extension of IMA is identified, the State will conduct an inspection 
of the property to determine if substantial construction progress has 
been made. If substantial construction progress has been made, the 
State may provide IMA for the additional authorized period of time, for 
a total period of assistance up to 36 months. If the inspection 
indicates that substantial progress has not been made, the extension of 
IMA will be provided only when the recipient agrees to participate in 
the newly established construction program within the NY Rising Housing 
Recovery Program. Under the construction program, the State will 
contract for and manage, on behalf of the IMA recipient, the 
rehabilitation of the IMA recipient's home. Prior to its initial 
implementation of the construction program, the State will determine 
the need for the IMA extension in those instances where substantial 
construction progress has not occurred and will give priority to the 
rehabilitation of homes for those IMA recipients receiving a total up 
to 36 months of IMA.
    After reviewing the State's request, and for the State of New 
York's IMA program only, the Department is modifying the provision of 
the March 5, 2013, Federal Register notice that limits the provision of 
interim mortgage assistance to a period of 20 months and establishing 
an alternative requirement that allows for the payment of assistance 
for a period of up to 36 months if the State meets the other 
requirements described in the above paragraph. The goal of this 
alternative requirement is to provide an extended period of IMA in 
order to minimize the risk of foreclosure of storm damaged homes while 
they are being rehabilitated with CDBG-DR funds and to return IMA 
recipients to their rehabilitated homes as quickly as possible. The 
State must implement this alternative requirement consistent with the 
approach outlined in its request and as described herein. This waiver 
and alternative requirement shall remain in effect until December 31, 
2017, after which the State shall be authorized to offer interim 
mortgage assistance for a period no more than 20 months. Interim 
mortgage assistance is an authorized eligible public service activity 
and the State is reminded that IMA expenditures are subject to the 15 
percent cap on public services established pursuant to 42 U.S.C. 
5305(a)(8).
    Within 30 days of the effective date of this notice, the State must 
begin to implement its construction program for IMA recipients 
receiving an extended period of assistance and without substantial 
construction progress in the rehabilitation of their home. The State 
must have fully implemented the construction program for all IMA 
recipients within 6 months of the effective date of this notice. In 
addition, the State's policies and procedures must:
    (1) Document how the State will determine that ``substantial 
progress'' has or has not been made in the rehabilitation of an IMA 
recipient's home;
    (2) Document how the State will determine that the amount and 
period of assistance to be provided under this alternative requirement 
is necessary and reasonable;
    (3) Document how the State will prioritize the rehabilitation of 
homes of IMA recipients receiving a total up to 36 months of IMA;
    (4) Include internal controls designed to ensure that IMA provided 
to recipients is being used for its authorized purpose; and
    (5) Include a plan for assisting recipients that exhaust their IMA 
after 36 months but continue to have a need for assistance because the 
rehabilitation of their home has not been completed.

III. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number for the disaster 
recovery grants under this notice is 14.269.

IV. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available for public inspection between 8 a.m. and 5 p.m. weekdays in 
the Regulations Division, Office of General Counsel, Department of 
Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500. Due to security measures at the HUD 
Headquarters building, an advance appointment to review the docket file 
must be scheduled by calling the Regulations Division at 202-708-3055 
(this is not a toll-free number). Hearing- or speech-impaired 
individuals may access this number through TTY by calling the Federal 
Relay Service at 800-877-8339 (this is a toll-free number).

    Dated: February 8, 2016.
Nani A. Coloretti,
Deputy Secretary.
[FR Doc. 2016-02913 Filed 2-11-16; 8:45 am]
 BILLING CODE 4210-67-P