NACCED Annual MeetingOrlando, Florida

September 30, 2012

CPD Policy Update

CPD Today

• Assistant Secretary Marquez departed May 2012• Mark Johnston, DAS for Special Needs, appointed as

Acting Assistant Secretary for remainder of term• Cliff Taffet remains as General Deputy Assistant

Secretary• Yolanda Chavez remains as DAS for Grant Programs• Ann Oliva now Acting DAS for Special Needs

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FY 2012 Operations

• FY 2012 formula allocations announced in January 2012 consistent with 60 day provision of law

• Field offices are fully caught up on reviews of action plans, making grants in timely manner

• CPD has maintained monitoring schedule at field office level despite tight budgetary constraints

• Funding constraints having impact on ability of field offices to hire staff and travel

CDBG

• FY 12 formula funding level - $2.948 billion• Represents 26% reduction in comparison to FY 10 • $300 million from CDF account for disaster recovery

purposes (additional $100 million outside budget cap)

• $400 million in CDBG DR allocated in January 2012 to 17 grantees (8 states and 9 local governments)

CDBG in FY 13

• House & Senate passed 6 month continuing resolution for FY 2013 (H. Res. 117)

• Provides funding based on FY 2012 level BEFORE deduction of $300 million in CDBG DR funding

• Projected amount to be available for CDBG formula allocation is $3.248 billion

• House and Senate Appropriations Committees, respectively, provided $3.34 billion and $3.1 billion for CDBG formula in their FY13 appropriation bills

Congressional Interest in CDBG

• FY 12 appropriation called for two reviews:• GAO to review best practices in formula programs• HUD to report to committees on data systems

improvements• House Appropriations Surveys and Investigations on

administrative/planning costs• GAO also reviewing admin/planning costs• House Appropriations staff questions on activity

delivery costs, grandfathered communities, public service cap, American Community Survey

CDBG Policy Considerations

• Guidance issued on CDBG-R and NSP 1 closeouts, addressing open activities cited by OIG audit, voluntary grant reductions

• Preparing guidance on mixed use economic development, activities jointly funded by entitlements and states, use of ACS data for low-mod area benefit, Activity Delivery Costs vs. General Administrative Costs, technical corrections to regs.

• Evaluating changes to IDIS performance measurement structure

• Other IDIS upgrades: eConPlan suite/mapping tool; enhancements in response to OIG audit

CDBG Issues – IG Audit

• Formally issued October 31, 2011• “HUD did not adequately use its System (IDIS) to

provide oversight of activities under the Block Grant program.”

• Unaware of how grantees used $67 million to fund more than 1,300 cancelled activities with draws

• Lacked oversight of almost $3 billion funding more than 20,000 long-standing open activities

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CDBG Issues – IG Audit

• Some seriously bad actors• 46 grantees accounted for 11,647 open activities• 64 grantees accounted for $2 billion in open

activities • Have reduced open activities to 2,288 or 11.2% of

original 20,000, representing 16.09% of funds• Have reduced canceled/drawn activities to 238,

representing 27.83% of funds • Guidance to field offices to help on tough issues

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CDBG Issues – ACS Data

• FY 2012 allocations used American Community Survey (ACS) data for 2005-2009 in place of 2000 Census data (plus 2010 population count)

• Significant funding changes for many grantees due to new data and reduced appropriation

• Path of appeal on data is to Census Bureau• Next update of OMB Metro Area/City designations

sometime in 2013• Plan to update Low/Moderate Income Summary Data

Section 108

• $240 million in guarantee authority in FY 2012• FY 2013 Continuing Resolution would effectively

provide same authority level • FY 2013 Administration request was $500 million with

switch to fee-based approach• At committee level, Senate adopted Administration

proposal while House provided credit subsidy• HUD’s Policy Development and Research Office to

issue report on Section 108 program shortly

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CDBG-R

• Deadline for expending funds = 9/30/12• If you haven’t expended it, it’s too late now! • After today, access to CDBG-R grants in IDIS will be

blocked for several days – one re-opened you can enter accomplishments/complete activities

• Any funds remaining unexpended will be recaptured from your line of credit

• As of 9/26, 97.0% drawn down nationally; $29 million not drawn

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CDBG-R

• Closeout: see CPD Notice 12-004• All activities must meet a national objective before

you can close out• If you’re at that point, no need to wait to closeout• Final Federalreporting.gov final quarterly reports

in October 2012 or January 2013• HUD expects all activities to meet a national

objective & be ready for closeout by 03/31/13

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NSP Status – September 10, 2012

• NSP 1 = $3.92 billion• 95.00% expended (112.42% obligated) • Grant amount must be expended by March 2013

• NSP2 = $1.93 billion• 75.51% expended • 54 of 56 Grantees met 50% expenditure mark• Grantees must expend 100% of grant amount by

February 11, 2013

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NSP Status

• NSP3 = $970 million• 18.8% expended • 50% of grant amount to be expended by March

2013, 100% by March 2014• Working on policies for transition after NSP • Still have technical assistance available, especially for

NSP3

Project Rebuild

• President Obama included $15 billion for Project Rebuild as part of American Jobs Act

• Request repeated as part of FY 2013 budget submission• Introduced in both House and Senate• Would improve upon and expand NSP • $10 billion formula allocation to states and local

governments• $5 billion competition to include governmental partners

but also non-profits and for-profits

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OneCPD TA

• OneCPD replaces previous CPD approach to technical assistance

• Borrows from and expands upon SNAPS and NSP TA efforts

• Almost $70 million available across FY10-12 appropriations

• Have already initiated several dozen engagements from highly targeted to comprehensive

• New website coming soon• CPD field offices are the access point

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• FY 2012 Appropriation - $1 Billion • Same as FY 1993 funding level

• FY 2013 Continuing Resolution provides $1 billion

• FY 2013 Administration Request - $1 Billion• House mark: $1.2 billion• Senate mark: $1.0 billion• $500,000 minimum qualification threshold to

minimize new PJs qualifying at lower $335,000 threshold

HOME Appropriations

FY12 HOME Appropriation

Imposed 4 provisions on 2012 HOME projects• Evaluation of Developer Capacity, Underwriting

and Market Demand before committing funds;• Homebuyer Units remaining unsold 6 months

after construction must be converted to rental;• Projects not completed 4 years after commitment

must be terminated and funds repaid;• PJ must certify that CHDO receiving ‘12 funds has

staff with demonstrated development capacity;

FY12 HOME Appropriation

• CPD Notice 12-07, Operating Guidance for Implementing FY 2012 Appropriation Requirements explains what the law requires

• HUD held 8 webinars on FY 2012 HOME provisions • Archived webinars can be found at http:\hometa.info

IDIS System Improvements

HOME PROGRAM CHANGES:Went Live on May 4thSystem flags for Projects:• In final draw for > 120 days• With an initial disbursement but no subsequent

disbursement for > 180 days• Committed more than 4 years ago, but not

completed

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IDIS System Improvements

Required Certifications at Project Set-up:• CHDO Capacity• Assessment of Underwriting, Developer Capacity

and Neighborhood Market Conditions

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HOME Rulemaking

• Proposed Rule Published: December 16, 2011• Public comments were due on February 14, 2012 –

HUD received 320 comments• Final rule has completed Departmental clearance and

been sent to OMB• Publication expected later this year• HUD preparing to deliver classroom training and

webinars subsequent to publication of final rule

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