# Common Application, Waivers, and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees: The Universal Notice

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2024-31621

## Record

- **Collection:** Federal Register
- **Document type:** Notice
- **Published:** January 8, 2025
- **Citation:** 90 FR 1754

## Text

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6489-N-01]
Common Application, Waivers, and Alternative Requirements for Community Development Block Grant Disaster Recovery Grantees: The Universal Notice

AGENCY:

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

ACTION:

Notice.

SUMMARY:

This notice contains a preamble and the
Community Development Block Grant Disaster Recovery Universal Notice: Waivers and Alternative Requirements
(the “Universal Notice”). The Universal Notice describes the processes, procedures, timelines, waivers, and alternative requirements that U.S. Department of Housing and Urban Development (HUD) intends to implement with each allocation of Community Development Block Grant Disaster Recovery (CDBG-DR) funding after a qualifying presidential disaster declaration. Specifically, following the appropriation of CDBG-DR funds for qualifying disasters, HUD will publish an Allocation Announcement Notice in the
Federal Register
that incorporates, via cross-reference, the waivers and alternative requirements provided in the Universal Notice, as appropriate, along with any other new requirements imposed by the specific appropriation. This notice also describes the grant award process, pre-award certification submissions, criteria for Action Plan approval, and eligible disaster recovery activities to streamline post-disaster processes for future grantees. By publishing the Universal Notice, HUD intends to provide grantees and the public with increased transparency, consistency, and more timely access to CDBG-DR funds, helping to minimize program delays and accelerate recovery.

DATES:

Applicability Date:
January 13, 2025.

FOR FURTHER INFORMATION CONTACT:

Tennille Parker, Director, Office of Disaster Recovery (ODR), HUD, 451 7th Street SW, Room 7282, Washington, DC 20410, telephone number 202-708-3587 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit:
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
Email inquiries may be sent to
Disaster_Recovery@hud.gov.

Table of Contents

Preamble

Community Development Block Grant Disaster Recovery Universal Notice: Waivers and Alternative Requirements (the “Universal Notice”)

I. Phase One: The Action Plan

I.A. CDBG-DR Action Plans Defined

I.B. Admin Action Plan

I.C. Action Plan

II. Phase Two: Financial Certification and Oversight of Funds

II.A. Certification of Adequate Financial Controls and Procurement Processes, and Procedures for Proper Grant Management

II.B. Relying on Prior Financial Certification Submissions

II.C. Obligation and Expenditure of Funds

III. Phase Three: Implementation of Universal Notice Requirements

III.A. Policies and Procedures—Universal Notice Requirements

III.B. Grant Administration

III.C. State Grantee Only Requirements

III.D. Waivers and Alternative Requirements Related to Eligible Activities

III.E. Ineligible Activities in CDBG-DR

III.F. Performance Reviews

III.G. Grantee Reporting Requirements in the Disaster Recovery Grant Reporting (DRGR) System

IV. Assistance Listing Numbers

V. Finding of No Significant Impact

Appendix A. Certifications Waiver and Alternative Requirement for Admin Action Plan Submission

Appendix B. Certifications Waiver and Alternative Requirement for Action Plan Submission

Appendix C. Duplication of Benefits (DOB)

Appendix D. Detailed Table of Contents to the Universal Notice

SUPPLEMENTARY INFORMATION:

Preamble

Purpose and Policy Objectives

HUD has developed this preamble and the Universal Notice, to assist States, local governments, Indian Tribes, CDBG-DR subrecipients, and the public in planning for the award of CDBG-DR funds. Because not all the requirements in the Universal Notice are appropriate or applicable to Indian Tribes, HUD will publish an Addendum to the Universal Notice at a later date to establish requirements that will apply when Indian Tribes receive a CDBG-DR grant directly from HUD. This process will allow HUD to ensure that the requirements imposed are fair and consistent with the Indian Community Development Block Grant (ICDBG) Program.

In December 2022, HUD published a Request for Information (RFI) for HUD's Community Development Block Grant Disaster Recovery (CDBG-DR) Rules, Waivers, and Alternative Requirements (FR-6336-N-01)
1

seeking public input to strengthen and improve CDBG-DR requirements. Based on the feedback received through the RFI,
2

HUD is establishing a revised process for CDBG-DR grants for qualifying disasters whereby HUD will incorporate applicable provisions of the Universal Notice, to the extent they are consistent with future appropriations acts, in a
Federal Register
notice that announces allocations of the appropriated CDBG-DR funds (the “Allocation Announcement Notice”). The Allocation Announcement Notice (AAN) will impose the waivers and alternative requirements of the Universal Notice for the subject CDBG-DR grants. The AAN will also add or modify requirements of the Universal Notice as necessary to comply with statutory provisions.

1
View the request for information notice (FR-6336-N-01) here:
https://www.govinfo.gov/content/pkg/FR-2022-12-20/pdf/2022-27547.pdf.

2
View a summary of the comments received, and HUD's responses here:
https://www.hud.gov/program_offices/comm_planning/cdbg-dr/universal_notice_grantees.

The Universal Notice has no legal effect on a CDBG-DR grant until funds are appropriated by Congress and the appropriation authorizes the HUD Secretary to waive or specify alternative requirements for the assistance, and the AAN that incorporates appropriate provisions of the Universal Notice is published by the Department and goes into effect. HUD will make the required findings in support of the waivers and alternative requirements incorporated into and made effective through AANs contemporaneously with the publication of each AAN. Because the Universal Notice has no legal effect on its own but rather requires authority provided by Congress through enacting special disaster appropriations and contemporaneous publication of an AAN by HUD, this is being published as a notice and is not a rulemaking.

The Universal Notice is designed to inform potential CDBG-DR grantees and other stakeholders about each phase of the CDBG-DR grant process, including but not limited to, pre-award grantee submissions; grantee steps and timelines; and Action Plan development, submittal, and implementation.

Through the Universal Notice, HUD seeks to:

• Outline a comprehensive and uniform set of waivers and alternative requirements that HUD intends to apply to govern future allocations of CDBG-DR funds, including all timelines, documentation, and other requirements

for pre-award grantee submission to reduce the administrative burden for future CDBG-DR grantees and assigned HUD Community Planning and Development (CPD) staff member (
e.g.,
CPD Representative, CPD Specialist, etc. . . .);

• Encourage intentional and early coordination between CDBG-DR grantees; other agencies/departments at the Federal, State, or local level; and other regional or local planning efforts to better align disaster recovery assistance and projects with the goals of regional redevelopment plans, resilience plans, long-term recovery plans, and State and local Hazard Mitigation Plans (HMP);

• Increase awareness of the availability of disaster recovery assistance and advance fair disaster recovery outcomes, including community engagement efforts and pre-disaster planning for targeted assistance to historically marginalized groups that can be adversely affected by disasters that often exacerbate inequalities for residents of underserved communities, members of protected classes under fair housing and civil rights laws, and vulnerable populations; and

• Improve long-term community resilience by fully integrating resilience planning and hazard mitigation activities into disaster recovery to reduce the impacts of a changing climate and future disasters, encourage green recovery efforts (focusing on healthier water and air, and effective debris and waste management), address environmental justice concerns associated with disaster recovery efforts, and address recovery needs for accessible, resilient, and affordable housing for low- and moderate-income persons.

Management and Oversight

Prior to accessing CDBG-DR funding, grantees must demonstrate that they have the capacity to administer funds in a compliant manner as described by the Universal Notice. Consistent with 2 CFR 200.206(b) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Requirements), HUD will evaluate each CDBG-DR grantee's capacity to effectively manage its funds through a review of its pre-award submissions as provided in section II. of the Universal Notice, which includes the grantee's submissions in response to the Financial Management and Grant Compliance Certification Requirements in section II.A.1. of the Universal Notice.

Authority To Grant Waivers

CDBG-DR grants are generally subject to CDBG regulations outlined in 24 CFR part 570.
3

The appropriations acts (
i.e.,
public laws) that provide CDBG-DR funds typically allow the Secretary to waive requirements or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with the obligation by the Secretary or the use by the grantee of CDBG-DR funds. Generally, the appropriations acts specify that there are four types of requirements that the Secretary cannot waive under that authority, these include fair housing, nondiscrimination, labor standards, and the environment. However, HUD may also exercise its regulatory waiver authority under 24 CFR 5.110, 91.600, and 570.5.
4

3
View 24 CFR part 570—Community Development Block Grants Regulations here:
https://www.ecfr.gov/current/title-24/subtitle-B/chapter-V/subchapter-C/part-570.

4
View HUD's policy concerning the procedures that govern the waiver of regulations and directives issued by HUD here:
https://www.govinfo.gov/content/pkg/FR-2024-08-06/pdf/2024-17034.pdf.

The waivers and alternative requirements in the Universal Notice draw from HUD's knowledge of the needs of grantees, public feedback, and HUD's previously established waivers and alternative requirements and the determinations by the Secretary regarding good cause and consistency with the overall purposes of title I of the HCDA that supported the waivers and alternative requirements. Historically, HUD has established waivers and alternative requirements based on findings of good cause that they provided additional flexibility to grantees in program design and implementation, supported a full and swift recovery from the most devasting disasters, and streamlined administrative requirements that would otherwise increase the time it takes for disaster funds to reach those most in need.

Unless otherwise provided, HUD intends to make these same findings of good cause when the waivers and alternative requirements in the Universal Notice are incorporated into and made effective through later AANs. HUD will provide a statement regarding the Secretary's finding of good cause and consistency with the purpose of title I of the HCDA, or such other applicable standard, in each AAN. If HUD's findings of good cause differ on certain waivers or alternative requirements from the findings identified in this Universal Notice, HUD will include the updated findings in support of those waivers and alternative requirements in the AAN. CDBG-DR activities will be governed by the regulations cited in the requirements of this notice, as incorporated in the applicable AAN, as may be amended.

Grantees who have received previous allocations of CDBG-DR funds must follow the requirements outlined in their applicable
Federal Register
notice(s). However, any CDBG-DR grantee may request waivers and alternative requirements to better align requirements across grants, as long as good cause is provided. In addition, the waivers and alternative requirements herein do not apply to funds provided under the annual State or Entitlement CDBG programs or those provided under any other component of the CDBG program, such as the Section 108 Loan Guarantee Program.

After Congress appropriates CDBG-DR funds and HUD announces the allocations, grantees may request that HUD grant additional waivers and alternative requirements to address specific needs related to their recovery activities. Waiver requests must be accompanied by supporting data and must be submitted to the assigned HUD CPD staff member and to the ODR mailbox at
Disaster_Recovery@hud.gov.
HUD will aim to publish grantee-specific waivers and alternative requirements at least quarterly in the
Federal Register
or on HUD's website. Grantees may consult with their assigned HUD CPD staff member for anticipated
Federal Register
publication timelines ahead of any waiver request submittal.

Overview of Grant Life Cycle

To begin expending CDBG-DR funds, the following expedited steps are necessary as broken out by each phase:

(1)
Phase One:
The Action Plan

a. Grantee follows its citizen participation plan for disaster recovery (I.C.2.).

i. Grantee consults with stakeholders, including all required consultations (I.C.2.a.).

ii. Grantee publishes its Action Plan on its website for no less than 30 calendar days to solicit public comment (I.C.2.b.).

iii. Grantee responds to public comments and incorporates feedback into its Action Plan.

b. Grantee submits its Action Plan (including the SF-424, SF-424B and SF-424D, as applicable) within 90 calendar days from the applicability date of the AAN (I.C.3.).

c. Grantee requests and receives Disaster Recovery Grant Reporting (DRGR) system access (if the grantee

does not already have DRGR access) and may enter activities into the DRGR system before or after submission of the Action Plan to HUD.

d. HUD reviews the Action Plan (allotted 45 calendar days from date of receipt) and approves the Action Plan according to criteria identified in this notice (I.C.5.).

e. HUD sends an Action Plan approval letter to the grantee. If the Action Plan is not approved, HUD will notify the grantee of the deficiencies. The grantee must then resubmit the Action Plan within 45 calendar days of the written notification. HUD will respond to approve or disapprove the Action Plan within 30 calendar days of receiving the revisions or resubmission.

(2)
Phase Two:
Financial Certification and Oversight of Funds.

a. Within 135 calendar days of the applicability date of the AAN, the grantee submits documentation for the certification of financial controls and procurement processes, and adequate procedures for grant management (II.A.).

b. HUD will review the grantee's documentation for the certification of financial controls and procurement processes, and adequate procedures for grant management or any provided updates if the grantee is relying on a prior certification (allotted 45 calendar days from date of receipt).

c. The Secretary will certify to the proficiency of the grantee's financial controls and procurement processes, and adequate procedures for grant management in accordance with the requirements and HUD will send the grantee the grant agreement.

d. Grantee signs and returns the grant agreement to HUD.

e. HUD signs and returns a fully executed grant agreement to the grantee with a period of performance identified.

f. Grantee publishes the final HUD-approved Action Plan on its official disaster recovery website.

g. HUD establishes the grantee's line of credit.

h. Grantee enters the activities from its approved Action Plan into the DRGR system if it has not previously done so and submits its DRGR action plan to HUD (funds can be drawn from the line of credit only for activities that are in an approved DRGR Action Plan).

i. The grantee may draw down funds from the line of credit for an activity after the Responsible Entity (1) completes an environmental review(s) pursuant to 24 CFR part 58 and receives from HUD or the State, as outlined in 24 CFR 58.18, an approved Request for Release of Funds (RROF) and certification (as applicable), or (2) adopts another Federal agency's environmental review and receives from HUD or the State an approved RROF and certification (as applicable).

(3)
Phase Three:
Implementation of Universal Notice Requirements.

a. Within one year from the applicability date of the AAN, the grantee must create and finalize policies and procedures for its housing programs. If the grantee is not funding housing programs, see section III.A. for more details.

b. Within eighteen months from the applicability date of the AAN, the grantee must create and finalize policies and procedures governing the rest of its CDBG-DR funded programs (
e.g.,
economic revitalization, public service, infrastructure programs, etc.).

c. Within two years from the applicability date of the AAN, these policies and procedures will be subject to HUD review.

d. The grantee should begin to draw down funds from DRGR no later than 180 calendar days after HUD executes a grant agreement with the grantee (II.C.) or HUD approves the Action Plan and financial certification and oversight of funds, whichever is later. Additionally, all funds must be expended within six years of the date of obligation (III.F.1.).

HUD provides additional flexibility to streamline access to CDBG-DR funds, through the following options:

(1) Grantees may submit an Optional Action Plan for Program Administrative Costs (“Admin Action Plan”) to access administrative funds prior to the grantee's submission of its Action Plan (I.B.).

(2) Previous grantees covered by the Universal Notice or other prior notices may rely on their previous financial certification submissions as described in section II.B.

There may be times when appropriations acts allow additional flexibilities for timing of financial certification and action plan submissions, signing of grant agreements, and the availability of administrative funds. HUD will adapt this grant life cycle to be in compliance with any additional flexibilities provided in the appropriations acts.

Community Development Block Grant Disaster Recovery Universal Notice: Waivers and Alternative Requirements (the “Universal Notice”)

The Universal Notice outlines the waivers and alternative requirements that grantees are required to demonstrate compliance with over the course of three phases of the grant life cycle which include: (1) Phase One: The Action Plan, (2) Phase Two: Financial Certification and Oversight of Funds, and (3) Phase Three: Implementation of Universal Notice Requirements. Any references to the “Universal Notice” or “this notice” in this document refer to sections I. through V. and the attached appendices.

CDBG-DR grantees that are subject to the Universal Notice, must comply with all waivers and alternative requirements, unless expressly made inapplicable (
e.g.,
a State only waiver does not apply to local governments). Except as described in applicable waivers and alternative requirements, the statutory and regulatory provisions governing the CDBG program shall apply to grantees receiving a CDBG-DR allocation. Statutory provisions (title I of the HCDA) that apply to all grantees can be found at 42 U.S.C. 5301
et seq.
and regulatory requirements, which differ for each type of grantee, are described in each of the paragraphs below.

Except as modified, the State CDBG program rules shall apply to State grantees receiving a CDBG-DR allocation. Applicable State CDBG program regulations are found at 24 CFR part 570, subpart I.

For insular areas (as defined under 42 U.S.C. 5302(a)(24)), HUD waives the provisions of 24 CFR 570, subpart F and imposes the following alternative requirement: Insular areas shall administer their CDBG-DR allocations in accordance with the regulatory and statutory provisions governing the State CDBG program, as modified by the Universal Notice.

Except as modified, statutory and regulatory provisions governing the Entitlement CDBG program shall apply to local government grantees (often referred to as units of local government in appropriations acts). Applicable Entitlement CDBG program regulations are found at 24 CFR 570, as described in § 570.1(a).

Each grantee shall administer its award in compliance with all applicable laws and regulations and shall be financially accountable for the use of all awarded funds. CDBG-DR grantees must comply with the recordkeeping requirements of 24 CFR 570.506 or 24 CFR 570.490, as amended by the Universal Notice waivers and alternative requirements. All grantees must follow all cross-cutting requirements, as applicable, for all CDBG-DR funded activities including but not limited to the environmental requirements outlined in the Universal Notice,
5

the Davis Bacon Act, Civil Rights Requirements, the Lead Safe Housing Rule, and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (“URA”) and its implementing regulations.

5
View HUD's guidance on addressing Radon in the Environmental Review process published in CPD Notice 23-103 here:
https://www.hud.gov/sites/dfiles/CPD/documents/CPD_Notice_on_Addressing_Radon_in_the_Environmental_Review_Process.pdf.

All grantees must maintain records of performance in DRGR, as described elsewhere in the Universal Notice. Additionally, grantees must comply with the requirements in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR part 200, as amended (Uniform Requirements).

Any references to “subrecipient” in this notice refer to the term as defined in 24 CFR 570.500(c). Subrecipients include, but are not limited to, nonprofit organizations, units of general local government, partner agencies, subgrantees, and Indian Tribes.

I. Phase One: The Action Plan

I.A. CDBG-DR Action Plans Defined

The action plan is a key mechanism for grantees to inform the public and HUD of the intended use of the funds within their community and how this plan connects to the community's remaining unmet needs and mitigation needs associated with the qualifying disaster(s). It is important that grantees understand the difference between the two action plans associated with CDBG-DR funds.

•
Admin Action Plan (Optional Action Plan for Program Administrative Costs):
This is an optional submission that allows a grantee to access their funds for program administrative costs prior to the award of the full grant (
e.g.,
to increase staffing and capacity to develop the required Action Plan). The Admin Action Plan has streamlined requirements, including no public comment period or deadline for submission, and is sent to HUD for review (as described in the applicable AAN).

•
Action Plan:
The Action Plan is a required plan that a grantee must develop to have access to grant funds. The Action Plan must identify the use of all CDBG-DR funds—including criteria for eligibility and how the uses address long-term recovery needs, restoration of infrastructure and housing, economic revitalization, and mitigation in the most impacted and distressed (MID) areas. The Action Plan has a required 30-day public comment period, must be submitted within 90 days of a grantee's AAN, and is sent to HUD for review (the submission process will be described in the applicable AAN). References to the “Action Plan” shall mean the Action Plan required by the Universal Notice and not the consolidated plan or action plan required by 24 CFR part 91.

I.B. Admin Action Plan

Typically, CDBG-DR awards are all subject to a five percent administrative cap as specified by the appropriations acts and outlined in section III.B.3. of this notice. Recent appropriations acts have allowed the special treatment of administrative funds (as described in section III.B.3.a.) and allowed grantees to access funding for program administrative costs prior to the Secretary's certification as described in section II.A. Note, the appropriations acts typically require that all CDBG-DR funds be used pursuant to an action plan. Grantees will follow the process described in this section, which includes the submission of the Admin Action Plan, to access funds for program administrative costs prior to the Secretary's certification.

I.B.1.
Developing the Admin Action Plan.
The grantee shall describe the use of all grant funds for administrative costs in the Admin Action Plan, including for any eligible pre-award program administrative costs the grantee plans to reimburse itself or its subrecipients as described in section III.B.14.a. The Admin Action Plan must include the criteria for eligibility of administrative activities and the amount to be budgeted for administrative activities. If a grantee submits the Admin Action Plan, the grantee must consider the need to cover program administrative costs over the life of the grant, which is six years from HUD's signature on the initial grant agreement as described in section III.F.1. of this notice. Therefore, grantees are strongly encouraged to budget for these costs early in the grant lifecycle.

I.B.2.
Submission and publication of the Admin Action Plan.
Normally, a grantee must publish any proposed action plan and substantial amendments to the plan for public comment. However, because the Admin Action Plan will only include program administrative costs, and to allow for a more streamlined process and timely awarding of grants, no public comment period is required.

Therefore, for Admin Action Plans and substantial amendments to these plans
only,
the provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR 570.486, 24 CFR 1003.604, 24 CFR 91.105(b) through (d), and 24 CFR 91.115(b) through (d), with respect to citizen participation requirements, are waived and replaced by the alternative requirements in this section. Additionally, for Admin Action Plans only, grantees are not subject to the action plan requirements in section I.C.

Grantees must publish the Admin Action Plan online when it is submitted to HUD (as described in the applicable AAN). The manner of publication of the Admin Action Plan must include prominent posting on the grantee's official disaster recovery website and include any substantial amendments to the Admin Action Plan. When the grantee submits its Admin Action Plan or substantial amendment to the Admin Action Plan to HUD for approval, it must include the Standard Form 424 (SF-424). There is no due date for the Admin Action Plan as it is optional and may be submitted any time prior to the grantee's Action Plan. HUD will review the Admin Action Plan or substantial amendment to the Admin Action Plan within 15 calendar days from the date of receipt and determine whether to approve the Admin Action Plan per the criteria identified here in section I.B. of the Universal Notice.

I.B.3.
Entering administrative activities into DRGR.
After HUD's approval of the Admin Action Plan, the grantee enters the administrative activities from its approved Admin Action Plan (or substantial amendment to that plan) into the DRGR system, as described in section III.G. Grantees are required to populate their DRGR Action Plan since grant funds can only be drawn from the line of credit through projects and activities that are established in the DRGR system. This process will allow a grantee to access funds for program administrative costs while the grantee begins developing its Action Plan.

I.B.4.
Applicability of the Admin Action Plan.
A grantee's use of grant funds for program administrative costs before approval of the Action Plan must

be consistent with the Admin Action Plan. Once the Action Plan is approved, the use of all grant funds must be consistent with the Action Plan. Upon HUD's approval of the Action Plan, the optional Admin Action Plan shall only be relevant to administrative costs charged to the grant
before
the date of approval of the Action Plan.

I.B.5.
Admin Action Plan certifications waiver and alternative requirement.
Sections 104(b)(4), (c), and (m) of the HCDA (42 U.S.C. 5304(b)(4), (c), and (m)), sections 106(d)(2)(C) and (D) of the HCDA (42 U.S.C. 5306(d)(2)(C) and (D)), and section 106 of the Cranston-Gonzalez National Affordable Housing Act of 1990, as amended (42 U.S.C. 12706), and regulations at 24 CFR 91.225 and 91.325 are waived and replaced with the following alternative requirement. Each grantee choosing to submit an Admin Action Plan must also complete the certifications in Appendix A and submit them with the Admin Action Plan.

Additionally, HUD is waiving section 104(a)-(c) and (d)(1) of the HCDA (42 U.S.C. 5304), section 106(c)(1) and (d) of the HCDA (42 U.S.C. 5306), section 210 of the URA (42 U.S.C. 4630), section 305 of the URA (42 U.S.C. 4655), and regulations at 24 CFR 91.225(a)(2), (6), and (7), 91.225(b)(7), 91.325(a)(2), (6), and (7), 49 CFR 24.4(a), and 24 CFR 42.325 only to the extent necessary to allow grantees to receive a portion of their allocation for program administrative costs before submitting other statutorily required certifications.

I.C. Action Plan

Requirements for CDBG actions plans, located at 42 U.S.C. 5304(a)(1), 42 U.S.C. 5304(m), 42 U.S.C. 5306(a)(1), 42 U.S.C. 5306(d)(2)(C)(iii), 42 U.S.C. 12705(a)(2), and 24 CFR 91.220 and 91.320, are waived for CDBG-DR grants. Instead, grantees must submit to HUD an action plan for disaster recovery which will describe programs and activities that conform to applicable requirements as specified in the Universal Notice and the applicable AAN. HUD will return all Action Plans that are substantially incomplete as described in section I.C.5. The Action Plan is substantially incomplete if the plan does not satisfy all the required elements identified in the Universal Notice and the applicable AAN. Grantees receiving an allocation are required to submit an Action Plan within 90 calendar days of the applicability date of the AAN, unless the grantee has requested, and HUD has approved an extension of the submission deadline. HUD will monitor the grantee's actions and use of funds for consistency with the Action Plan, as well as meeting the performance and timeliness objectives therein.

I.C.1.
Developing the Action Plan.
The Action Plan must identify the use of all CDBG-DR funding, including eligibility criteria for accessing the funds and how the proposed uses will address long-term recovery needs. At a minimum, the Action Plan must cover the impacts of the qualifying disaster, restoration of housing, infrastructure, economic revitalization, and mitigation in the MID areas. The CDBG-DR allocations are based on the unmet needs of specific communities, which are the least likely to fully recover without additional assistance. Therefore, it is critical that the Action Plan demonstrates the following, as described in the referenced sections:

1. An unmet needs assessment (review section I.C.1.a.).

2. A mitigation needs assessment (review section I.C.1.b.).

3. A fair housing and civil rights data assessment (review section I.C.1.c.).

4. Connection between proposed programs and projects and unmet needs, mitigation needs, and fair housing and civil rights assessments (review section I.C.1.d.).

5. Set allocation and award caps (review section I.C.1.e.).

6. Establish funding criteria (review section I.C.1.f.).

7. Establish protocols for substantial amendments (review section I.C.1.g.).

As grantees develop their Action Plan, they must consult with various stakeholders, including the public (
i.e.,
citizen participation) and inform residents about their funding decisions prior to submitting the Action Plan to HUD for review. Grantees will receive specific instructions for Action Plan submittal in the applicable AAN. Note, the citizen participation requirements to develop the action plan are described in section I.C.2.

I.C.1.a.
Unmet needs assessment.
Each grantee must develop an unmet needs assessment to strategically inform the use of the grant funds. The unmet needs assessment will help a grantee evaluate community needs across its jurisdiction by assessing the remaining effects of the qualifying disaster as they relate to housing, infrastructure, and the economy. Note, HUD can assist grantees in obtaining FEMA data to support the development of the Action Plan and implementation of recovery programs.
6

6
View more information about how to access this data on HUD's website here:
https://www.hud.gov/program_offices/comm_planning/cdbg-dr/data-sharing.

I.C.1.a.(i).
Unmet needs in the MID areas.
A grantee must describe the unmet need in the MID areas (see section III.D.2.), as the allocations are based on the unmet needs of these specific communities, which are the least likely to fully recover without additional assistance. Grantees are required to use at least 80 percent of the CDBG-DR award to benefit the HUD-identified MID areas. Local government grantees whose HUD-identified MID areas include their entire jurisdiction, must use 100 percent of the CDBG-DR award to benefit the HUD-identified MID area. However, HUD encourages all grantees to consider using 100 percent of its award to benefit HUD-identified MID areas since the data from these areas were used to determine the amount of the award. If allowed, and the grantee does choose to spend a portion (
i.e.,
up to 20 percent) of its award outside of the HUD-identified MID area, it will determine and identify in the Action Plan where the grantee will use that amount (“grantee-identified MID areas”), and that portion of the allocation may only be used to address those areas that the grantee determines are most impacted and distressed, meaning the areas that have the greatest amount of damage and unmet need outside of the HUD-identified MID areas. Additionally, any grantee-identified MID areas must have received a presidential major disaster declaration identified by the disaster numbers listed in the applicable AAN. The grantee must use quantifiable and verifiable data in its analysis, and reference it in its Action Plan, to identify the grantee-identified MID areas and indicate how the proposed use of funds will prioritize the remaining unmet needs for low- and moderate-income (LMI) individuals and areas. The addition of a grantee-identified MID area after the submittal of the initial Action Plan would result in a substantial amendment to the grantee's Action Plan (see section I.C.1.g.).

I.C.1.a.(ii).
Unmet needs assessment requirements.
At a minimum, the unmet needs assessment must include the following, as they relate to the HUD-identified and grantee-identified MID areas, and cite the appropriate data sources:

1. Description of the effects of the qualifying disaster(s) and the greatest remaining recovery needs that have not been addressed by other sources of funds, including insurance proceeds, other Federal assistance, or any other funding source; and

2. Evaluation of the three core aspects of recovery—housing, infrastructure, and the economy (
e.g.,
estimated job losses), which considers the pre-disaster needs (
e.g.,
a lack of affordable housing)

that have been exacerbated by the disaster. The assessment of housing needs must address: (1) emergency shelters; (2) interim and permanent housing; (3) rental and owner-occupied single family and multifamily housing; (4) public housing (including HUD-assisted housing) and other types of affordable housing, including housing for vulnerable populations (including those who were unhoused prior to the disaster).

Disaster recovery needs evolve over time and grantees must amend the Action Plan, including the unmet needs assessment, as additional needs are identified, and/or additional resources become available. At a minimum, grantees must revisit and update the unmet needs assessment when reallocating funds from one program to another through a substantial amendment (as described in section I.C.1.g.).

I.C.1.b.
Mitigation needs assessment.
While the purpose of CDBG-DR funds is to recover from a Presidentially declared disaster, integrating hazard mitigation and resilience planning with recovery efforts will promote a more resilient long-term recovery. Mitigation solutions designed to be resilient only for threats and hazards related to a prior disaster can leave a community vulnerable to negative effects from future extreme events related to other threats or hazards. For purposes of grants subject to the Universal Notice, mitigation activities are defined as those activities that increase resilience and reduce or eliminate the long-term risk of loss of life, injury, damage to and loss of property, and suffering and hardship, by lessening the impact of future disasters.

At a minimum, the mitigation needs assessment must include a risk-based assessment to identify current and future hazards (
e.g.,
sea level rise, strong winds, tornados, storm surge, flooding, volcanic activity, earthquakes, extreme heat, drought, and wildfire risk, where appropriate). The assessment must describe how the hazards do or can impact the HUD-identified and grantee-identified MID areas and cite the appropriate data sources. Grantees must explain how the risk-based assessment will inform the use of the CDBG-DR funds and identify if other sources of funding are available to address its identified mitigation needs.

At a minimum, grantees must use the risks identified in the current FEMA-approved State or local HMP, Community Wildfire Protection Plan (CWPP), or other resilience or long-term recovery plans to inform the assessment. If a jurisdiction is currently updating an expired HMP, the grantee's agency administering the CDBG-DR funds must consult with the agency administering the HMP update to identify the risks that will be included in the assessment.

A grantee may choose to simply cite the current FEMA-approved HMP, CWPP, or other resilience or long-term recovery plan to address the mitigation needs assessment, if there is a clear connection of programs and projects to the mitigation needs. If a grantee chooses this option, the grantee must make the HMP, CWPP, or other resilience or long-term recovery plan available on the grantee's official disaster recovery website and provide a direct link to the selected plan in the mitigation needs assessment section of the Action Plan.

Mitigation needs evolve over time and grantees must amend the mitigation needs assessment and Action Plan as conditions change, as additional mitigation needs are identified, and additional resources become available. At a minimum, grantees must revisit and update the mitigation needs assessment when reallocating funds from one program to another through a substantial amendment (as described in section I.C.1.g.).

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

I.C.1.c.(i).
Fair housing and civil rights laws and terminology defined.
The grantee must use its CDBG-DR funds in a manner that complies with its fair housing and nondiscrimination obligations,
7

which include:

7
Visit HUD's Office of Fair Housing and Equal Opportunity's website for more information about fair housing and civil rights obligations here:
https://www.hud.gov/fairhousing.

• Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d
et seq.;

• Title VIII of the Civil Rights Act of 1968 (The Fair Housing Act), 42 U.S.C. 3601-19;

• Section 504 and 508 of the Rehabilitation Act of 1973, 29 U.S.C. 794;

• The Americans with Disabilities Act of 1990,42 U.S.C. 12131
et seq.;
and

• Section 109 of the HCDA, 42 U.S.C. 5309.

For purposes of the Universal Notice, HUD defines the following terms as they relate to the requirements set forth in the Universal Notice:

•
Protected Classes:
Race, color, national origin, religion, sex (including sexual orientation and gender identity), familial status, and disability.

•
Vulnerable Populations:
Groups or communities whose circumstances present barriers to obtaining or understanding information or accessing resources which may include: (1) persons at risk of or experiencing homelessness; (2) older adults; (3) persons with disabilities (mental, physical, developmental); (4) survivors of domestic violence, dating violence, sexual assault, or stalking; (5) persons with alcohol or other substance-use disorder; (6) persons with HIV/AIDS and their families; or (7) public housing residents.

•
Underserved Communities:
Populations or geographic communities, often comprised of protected classes, sharing a particular characteristic that have been systematically denied a full opportunity to participate in aspects of economic, social, and civic life. Underserved communities that were economically distressed before the disaster include, but are not limited to, those areas that were designated as a Promise Zone, Opportunity Zone, a Neighborhood Revitalization Strategy Area, a Tribal area, a Community Disaster Resilience Zone (CDRZ), or those areas that meet at least one of the distress criteria established for the designation of an investment area of a Community Development Financial Institution at 12 CFR 1805.201(b)(3)(ii)(D).

Grantees must take the following actions to comply with affirmatively furthering fair housing (AFFH):
8

8
Visit HUD's Office of Fair Housing and Equal Opportunity's website for more information about requirements for affirmatively furthering fair housing here:
https://www.hud.gov/program_offices/fair_housing_equal_opp/affh.

1. Submit a certification to AFFH in accordance with 24 CFR 91.225 or 325, as applicable and 24 CFR 5.150,
et seq.;

2. Update any policies and procedures to remain in compliance with AFFH requirements, as amended by HUD and reflected in updated HUD guidance and rules; and

3. Use their CDBG-DR funds in a manner that affirmatively furthers fair housing.

I.C.1.c.(ii).
Fair housing and civil rights data collection.
Collecting fair housing and civil rights data will position the grantee to provide a fair and holistic recovery. At a minimum, the grantee must collect the following data in terms of number and percentage for each identified group, as defined above, and as they relate to the HUD-identified and grantee-identified MID areas and cite the appropriate data sources:

1. Populations with Limited English Proficiency (LEP) by language spoken;

2. Persons belonging to protected classes;

3. Persons belonging to protected classes by housing tenure (
i.e.,
homeowner vs renter);

4. Persons belonging to vulnerable populations;

5. Persons belonging to historically distressed and underserved communities;

6. Indigenous populations and Tribal communities; and

7. Racially or ethnically concentrated areas of poverty (R/ECAPs).

Grantees are encouraged to consider housing tenure as it relates to these data sets when available.

I.C.1.d.
Connection of proposed programs and projects to unmet needs, mitigation needs, and fair housing and civil rights assessments.
The grantee must describe the connection between identified unmet needs, mitigation needs, fair housing and civil rights data, and the allocation of CDBG-DR resources within its Action Plan. At a minimum, the Action Plan must:

1. Provide a clear connection between a grantee's assessments and its proposed programs and projects in the MID areas (or outside in connection to the MID areas as described in section III.D.2.). Such description must demonstrate a reasonably proportionate allocation of resources relative to areas and categories (
i.e.,
housing, economic revitalization, and infrastructure) of greatest needs identified in the grantee's unmet needs and mitigation needs assessments or provide an acceptable justification for a disproportional allocation.

2. Describe how the grantee is incorporating hazard mitigation measures to reduce the impacts of future disasters and considering all hazard risks, as identified in its mitigation needs assessment.

3. Based on the fair housing and civil rights data collected, the grantee must:

• Describe how protected classes will benefit from CDBG-DR funds in proportion to their communities' needs.

• Assess the impact of its planned use of CDBG-DR funds on identified vulnerable populations and other identified historically underserved communities. If programs are aimed at these groups, the Action Plan should clearly define those populations.

4. Describe all reasonable efforts the grantee will take to minimize displacement of persons or entities, assist any persons or entities displaced, and ensure accessibility needs of displaced persons with disabilities.

I.C.1.e.
Allocation and award caps.
It is critical for grantees to demonstrate their planned use of funds through their Action Plan so the public can understand what types of assistance disaster survivors can apply for and what limits there are on possible awards.

Therefore, grantees must create a high-level budget for the full amount of the CDBG-DR allocation so the public can understand how funds will be split among program administration (subject to the five percent cap, plus five percent of program income generated, as described in section III.B.3.), planning (subject to the 15 percent cap, as described in section III.B.4.), housing, infrastructure, and economic revitalization (
e.g.,
by program, subrecipient, grantee-administered activity, or other category).

Grantees are also encouraged to budget for any planned public service activities. The grantee's budget should also be consistent with the requirements to integrate hazard mitigation into all its programs and projects that involve construction, as described in section III.D.3. Finally, grantees must develop an executive summary describing the contents of the Action Plan and its proposed use of funds so that interested parties will be able to understand and comment on the Action Plan.

For each program it intends to fund, the grantee must include the following in its Action Plan:

1. Provide a description of the disaster recovery program to be funded;

2. Identify the CDBG-DR eligible activity and national objective, including only those allowed under title I of the HCDA or otherwise eligible pursuant to a waiver or alternative requirement;

3. Identify the responsible entity assuming the authority for the decision making and completion of the environmental review per 24 CFR 58.4. State grantees who exercise HUD's environmental review responsibilities must follow the requirements per 24 CFR 58.4(b)(2) and 24 CFR 58.18;

4. Identify which geographic areas (
i.e.,
HUD-identified and/or grantee-identified MID areas) that may benefit from CDGB-DR funds;

5. Explain how the grantee will identify and then reduce barriers that individuals face or may face to access assistance, including protected classes, vulnerable populations, and other historically underserved communities;

6. If the appropriations act that funded the grantee's award includes additional funds for mitigation, the grantee must also identify how the proposed use of CDBG-DR mitigation set-aside funds will meet the definition of mitigation activities (as described in section I.C.1.b.);

7. Describe (1) the maximum amount of assistance (
i.e.,
award cap) available to a beneficiary under each of the grantee's disaster recovery programs and (2) the maximum income (
i.e.,
income cap) of any beneficiary receiving CDBG-DR assistance for direct-benefit activities. Each grantee must also indicate in its Action Plan that it will make exceptions to the maximum award amounts, when necessary, to comply with Federal accessibility standards or to reasonably accommodate a person with disabilities. If the maximum amount of assistance is unknown for a specific program or project when the grantee is submitting the initial Action Plan to HUD, the grantee must update the Action Plan through a substantial amendment (as described in section I.C.1.g.) once the information is known. The substantial amendment must be submitted and approved before awarding funds to applicants; and

8. Any other known eligibility criteria established by the grantee for assistance (
e.g.,
priority intake).

I.C.1.e.(i).
Prioritization for allocations less than $20 million.
Section I.C.1.d. requires that the Action Plan demonstrates a reasonably proportionate allocation of resources relative to areas and categories (
i.e.,
housing, economic revitalization, and infrastructure) of greatest needs identified in the grantee's unmet needs and mitigation needs assessments or provide an acceptable justification to HUD for a disproportional allocation.

HUD recognizes that grantees receiving an allocation of less than $20 million for a qualifying disaster(s) may most effectively advance recovery by more narrowly targeting these limited recovery and mitigation resources. HUD will consider the small size of the grant and HUD's allocation methodology as an acceptable justification for a grantee to propose a disproportional allocation when the grantee is allocating funds to address: (1) unmet affordable rental housing needs in a MID area caused by or exacerbated by the disaster(s) that incorporates mitigation, or (2) unmet infrastructure needs necessary to build affordable rental housing in a MID area that incorporates mitigation.

I.C.1.f.
Funding criteria.
The Action Plan must describe how the grantee will distribute its grant funds, which can include the following methodologies:

1. Direct implementation (through employees, contractors, or through subrecipients); or

2. A method of distribution to local governments and Indian Tribes (for States, as permitted by III.C.4.); or

3. A combination of a direct implementation model and a method of distribution model.

Because grantees must spend at least 80 percent of the CDBG-DR award to

benefit the HUD-identified MID area (see section III.D.2.), they should consider how they will meet this requirement when developing funding criteria. At a minimum, the grantee must establish the following criteria within its Action Plan so the public can clearly understand its funding criteria for funds sub-granted to eligible entities through a method of distribution or for applications that the grantee solicits for programs to be carried out directly:

1. All criteria used to allocate and award the funds, including the relative importance of each criterion and any priorities;

2. Establish the maximum grant size available;

3. Describe how the distribution and selection criteria will address disaster-related unmet needs or mitigation needs in a manner that does not have an unjustified discriminatory effect on nor a failure to benefit protected classes in proportion to their communities' needs, including in racially and ethnically concentrated areas of poverty; and

4. Describe the steps to be followed to encourage the participation of those belonging to protected classes. Such description must include an assessment of the following: (1) who may be expected to benefit, (2) the timing of who will be prioritized, and (3) the amount or proportion of benefits expected to be received.

If some required information is unknown when the grantee is submitting its initial Action Plan to HUD, the grantee must update the Action Plan through a substantial amendment once the information is known. Historically, appropriations acts require a grantee to submit a plan detailing the proposed use of all funds before HUD can obligate funding to the grantee. Without all the required information in the initial Action Plan, HUD may obligate only a portion of the grant funds until the substantial amendment providing the required information is submitted and approved by HUD.

I.C.1.g.
Protocols for substantial amendments.
In its Action Plan, each grantee must specify criteria for determining what changes in the grantee's Action Plan would constitute a substantial amendment to the Action Plan and thus require public comment. At a minimum, the following modifications will constitute a substantial amendment:

1. A change in program benefit or eligibility criteria (including the expansion of eligible beneficiaries (
e.g.,
establishing a new grantee-identified MID area));

2. The addition or deletion of an activity;

3. A proposed reduction in the overall benefit requirement (as described in section III.B.1.);

4. The allocation or reallocation of a reasonable monetary threshold specified by the grantee in its Action Plan; and

5. An update to the submitted initial Action Plan if the original submission was incomplete as allowed under section I.C.1.e. paragraph 7 and section I.C.1.f.

Once a grantee has set a reasonable monetary threshold in which a reallocation or allocation of funds would constitute a substantial amendment, grantees cannot disregard this threshold by submitting multiple nonsubstantial amendments back-to-back in order to avoid following a substantial amendment process (
e.g.,
submitting two budget reallocations within 30 days of each other that if taken together would require a substantial amendment).

I.C.2.
Citizen participation requirements.
To permit a more streamlined process and ensure disaster recovery grants are awarded in a timely manner, provisions of 42 U.S.C. 5304(a)(2) and (3), 42 U.S.C. 12707, 24 CFR 570.486, 24 CFR 1003.604, 24 CFR 91.105(b) through (d), and 24 CFR 91.115(b) through (d), with respect to citizen participation requirements, are waived and replaced by the alternative requirements in this section. Under the streamlined requirements, the grantee may be required to hold a public hearing(s) on the proposed Action Plan and must provide a reasonable opportunity (
i.e.,
at least 30 calendar days) for public comment.

The grantee must follow a detailed citizen participation plan that satisfies the requirements of 24 CFR 91.115 or 91.105 (except as provided for in notices providing waivers and alternative requirements). Each local government receiving assistance from a State grantee must follow its citizen participation requirements at 24 CFR 570.486 (except as provided for in notices providing waivers and alternative requirements). The grantee's records must demonstrate that it has notified affected residents through electronic mailings, press releases, statements by public officials, media advertisements, social media, public service announcements, and/or contacts with neighborhood organizations.

In addition to the requirements above, the streamlined citizen participation alternative requirements for CDBG-DR grants are as follows:

• Requirement for consultation during plan preparation (see section I.C.2.a.);

• Publication of the Action Plan and opportunity for public comment (see section I.C.2.b.);

• Consideration of public comments (see section I.C.2.c.).

I.C.2.a.
Consultation during Action Plan preparation.
All grantees must consult with States, Indian Tribes, local governments, Federal partners, nongovernmental organizations, the private sector, and other stakeholders and affected parties in the surrounding geographic area during Action Plan preparation to ensure consistency of the Action Plan with applicable regional development plans. This requirement also includes consulting with organizations that advocate on behalf of members of protected classes, vulnerable populations, and other underserved communities impacted by the disaster to help address requirements defined in section I.C.1.c. for the fair housing and civil rights data collection. A grantee must consult with other relevant government and local agencies, including State and local emergency management agencies that have primary responsibility for the administration of FEMA funds, agencies that manage local Continuum of Care,
9

Public Housing Agencies,
10

and HUD-approved housing counseling agencies,
11

as applicable. Grantees must coordinate with State Housing Finance Agencies to verify that all available funding sources and opportunities for leverage are noted in the Action Plan. Given the extensive coordination that is required to develop a grantee's Action Plan, HUD recommends that grantees give their partners a clear timeline on receiving feedback and create a consistent process for how feedback will be received from these stakeholders.

9
Find your local Continuum of Care here:
https://www.hudexchange.info/grantees/.

10
Find your local Public Housing Agency on HUD's website here:
https://www.hud.gov/program_offices/public_indian_housing/pha/contacts.

11
Find a HUD-approved housing counseling agency on HUD's website here:
https://answers.hud.gov/housingcounseling/s/?language=en_US.

I.C.2.b.
Public comment period and minimum public hearing requirement.
Following the creation of the Action Plan or substantial amendment, the grantee must publish the proposed Action Plan or substantial amendment for public comment. The manner of publication must include prominent posting on the grantee's official disaster recovery website and must afford residents, affected local governments,

and other interested parties a reasonable opportunity to review the Action Plan or substantial amendment (
i.e.,
at least 30 calendar days). Grantees shall identify and redress any potential barriers that may limit or prohibit protected classes, vulnerable populations, or other underserved communities and individuals affected by the disaster from providing public comment on the grantee's Action Plan or substantial amendments. For example, grantees should consider how to address barriers like lack of childcare and/or transportation that can limit certain populations or communities from participating in public hearings, providing comments, or other engagement events or techniques.

HUD anticipates that every community and every grantee will have some identified barriers to address. Based on the specific barriers the grantee identifies, particularly those that may limit or prohibit equitable participation, the grantee must describe the reasonable measures it will take to increase coordination, such as affirmative marketing, targeted outreach, and engagement with underserved communities and individuals, including protected classes such as persons with disabilities and persons with LEP.

HUD strongly encourages grantees to hold as many hearings or convenings as may be necessary to ensure they capture all citizen comments to inform the comprehensive development of their Action Plan. The minimum number of public hearings a grantee must convene on the Action Plan to obtain interested parties' views and to respond to comments and questions shall be determined by the amount of the grantee's CDBG-DR allocation: (1) CDBG-DR grantees with allocations under $20 million are not required to hold a public hearing; (2) CDBG-DR grantees with allocations equal to or greater than $20 million but less than $100 million are required to hold at least one public hearing; (3) CDBG-DR grantees with allocations equal to or greater than $100 million but less than $500 million are required to hold at least two public hearings; and (4) CDBG-DR grantees with allocations equal to or greater than $500 million shall convene at least three public hearings. These are only minimum hearing requirements and the form and structure of the hearings and convenings may vary to effectively solicit meaningful engagement and feedback. Grantees may find they need additional hearings to adequately capture and address all citizen questions, concerns, and comments.

If the grantee is required to hold multiple public hearings, and a grantee holds those hearings in-person, it must hold each hearing in a different location within the HUD-identified MID area. Specifically, the grantee should select locations that will promote a geographic balance and maximize accessibility for stakeholders to actively participate.

Figure One: Minimum Public Hearing Requirement Based on Grant Size

CDBG-DR grant value

Minimum public
hearing requirement

<$20 Million
No public hearing requirement.

≥$20 Million but < $100 Million
One (1) public hearing required.

≥$100 Million but < $500 Million
Two (2) public hearings required.

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

Grantees may convene public hearings virtually (alone, or in concert with an in-person hearing). All in-person hearings must be held within HUD-identified MID areas and in facilities that are physically accessible to persons with disabilities. When conducting a virtual hearing, the grantee must allow questions in real time, with answers coming directly from the grantee representatives to all attendees.

A grantee's citizen participation plan must specify that it will meet the requirements in the previous paragraph and the requirements in section III.B.8.a. of this notice on vital documents. Additionally, for both virtual and in-person hearings, the citizen participation plan must include how the grantee will complete the following: (1) hold hearings at times and locations convenient to potential and actual beneficiaries, (2) provide accommodations for persons with disabilities, and (3) to ensure effective communication for individuals with disabilities, including through the provision of auxiliary aids and services. See 24 CFR 8.6 for HUD's regulations about effective communication.

Grantees must also provide meaningful access for individuals with LEP at both in-person and virtual hearings. Meaningful access may include live translation of attendees' questions and comments. In the citizen participation plan, State and local government grantees shall identify how the needs of non-English-speaking residents will be met in the case of virtual and in-person public hearings where a significant number of non-English-speaking residents live in the MID areas. In addition, for both virtual or in-person hearings, the grantee shall provide reasonable notification and access for residents in accordance with the grantee's certifications at section I.C.4., timely responses to all citizen questions and issues, and public access to all questions and responses.

I.C.2.c.
Consideration of public comments.
The grantee must provide a reasonable time frame (no less than 30 calendar days) and reasonable method(s) (including but not limited to electronic submission) for receiving comments on the Action Plan or substantial amendment. The grantee must consider all oral and written comments on the Action Plan or any substantial amendment. Any updates or changes made to the Action Plan in response to public comments should be clearly identified in the Action Plan. A summary of comments on the Action Plan or amendment, and the grantee's response to each, must be included with the Action Plan or substantial amendment. Grantee responses shall address the substance of the comment rather than merely acknowledge that the comment was received.

I.C.3.
Submission of the Action Plan.
The Action Plan (including the SF-424, SF-424B and SF-424D, as applicable) and the certifications included in Appendix B of the Universal Notice must be submitted to HUD for review and approval. Note, the submission process will be described in the applicable AAN. HUD will review each Action Plan within 45 calendar days from the date of receipt, as described in section I.C.5. By submitting the required standard forms, the grantee is providing assurances that it and its recipients will comply with statutory requirements, including, but not limited to Federal civil rights requirements.

I.C.4.
Action Plan certifications waiver and alternative requirement.
Sections 104(b)(4), (c), and (m) of the HCDA (42 U.S.C. 5304(b)(4), (c) and (m)), sections 106(d)(2)(C) and (D) of the HCDA (42 U.S.C. 5306(d)(2)(C) and (D)), section 106 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12706), and regulations at 24 CFR 91.225 and 91.325 are waived and replaced with the following alternative requirement. Each grantee receiving an allocation under an AAN must make all the certifications included in Appendix B of the Universal Notice.

I.C.5.
HUD Action Plan review process.
HUD may return an Action Plan or substantial amendment to an Action Plan if it is incomplete. HUD will work with grantees to resolve or provide additional information during the review period to avoid having to unnecessarily formally disapprove an

Action Plan or substantial amendments. There may be several issues related to the Action Plan or substantial amendments, as submitted, that can be fully resolved through discussion and revision during the review period, rather than through HUD's formal disapproval of the Action Plan or substantial amendment. Therefore, the Secretary has determined that good cause exists and is waiving 24 CFR 91.500 and providing the alternative requirement described below.

I.C.5.a.
General HUD review of an Action Plan.
HUD will review the Action Plan upon receipt. The Action Plan will be deemed approved 45 calendar days after HUD receives the plan, unless before that date HUD notifies the jurisdiction that the plan is being returned or disapproved (see definitions below). The grantee must publish the final HUD-approved Action Plan on its official disaster recovery website.

I.C.5.b.
Standard of review of an Action Plan.
HUD may disapprove or return an Action Plan or a portion of an Action Plan if it is inconsistent with the purposes of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12703), if it is substantially incomplete, or if the certifications under section I.C.4. of the Universal Notice are not satisfactory to the Secretary in accordance with 24 CFR 570.304 or 570.485(c), as applicable. The following are examples of an Action Plan that is substantially incomplete:

• An Action Plan that fails to satisfy a required element in the Universal Notice or applicable AAN (for example, an Action Plan that was developed without the required citizen participation or the required consultation); or

• An Action Plan that fails to describe how protected classes would benefit from CDBG-DR funds in proportion to their communities' needs.

I.C.5.c.
Written notice of return of an Action Plan.
HUD is establishing an alternative process that offers a grantee the option to voluntarily provide a revised Action Plan if HUD has identified sections of the Action Plan that are substantially incomplete. If HUD finds errors with the Action Plan submission, no later than day twenty in HUD's 45-day review, HUD may return the Action Plan to the grantee to resolve the identified errors. The review timeline will pause while the grantee is updating the Action Plan for resubmission to HUD. Once the grantee has resubmitted the Action Plan, the review timeline will resume. A grantee is not required to revise the Action Plan submission, but if they choose not to after being notified of errors, the Secretary may disapprove the Action Plan as substantially incomplete if HUD determines the Action Plan does not meet the requirements of the Universal Notice and the applicable AAN.

I.C.5.d.
Written notice of disapproval of an Action Plan.
Within 15 calendar days after HUD notifies a grantee that it is disapproving its Action Plan (initial notice should occur via email), it must inform the jurisdiction in writing of the reasons for disapproval and actions that the jurisdiction could take to meet the criteria for approval.

I.C.5.e.
Revisions and resubmission of an Action Plan.
After the first notification of disapproval, the grantee must revise or resubmit an Action Plan within 45 calendar days. HUD must respond to approve or disapprove the Action Plan within 30 calendar days of receiving the revisions or resubmission.

I.C.6.
Amendments to the Action Plan.
The grantee must amend its Action Plan to update its needs assessments, modify or create new activities, or reprogram funds, as necessary. Each amendment must be published on the grantee's official website and describe the changes within the context of the entire Action Plan. A grantee's current version of its entire Action Plan must be accessible for viewing as a single document at any given point in time, rather than require the public or HUD to view and cross reference changes among multiple amendments.

I.C.6.a.
Substantial amendment.
In its Action Plan, each grantee must specify criteria outlined in section I.C.1.g. to clearly define what changes constitute a substantial amendment to the Action Plan. For all substantial amendments, the grantee must follow the same procedures required for the preparation and submission of an Action Plan for disaster recovery, with the exception of the public hearing requirements described in section I.C.2.b. and the consultation requirements described in section I.C.2.a., which are not required for substantial amendments. Every amendment to the Action Plan (substantial and nonsubstantial) must be numbered sequentially and posted on the grantee's website. A substantial amendment shall require a 30-day public comment period and must be posted on the grantee's website.

I.C.6.a.(i).
General HUD review of a substantial amendment to an Action Plan.
HUD will review a substantial amendment to an Action Plan upon receipt. The substantial amendment will be deemed approved 45 calendar days after HUD receives the amendment, unless before that date HUD has notified the jurisdiction that the amendment is disapproved.

I.C.6.a.(ii).
Standard of review of a substantial amendment to an Action Plan.
HUD may disapprove a substantial amendment to an Action Plan if it is substantially incomplete. HUD must notify the grantee in writing that it is disapproving the substantial amendment and must include the reasons for disapproval and actions that the jurisdiction could take to meet the criteria for approval.

I.C.6.a.(iii).
Revisions and resubmission of a substantial amendment to an Action Plan.
After the first notification of disapproval, the grantee must revise or resubmit the substantial amendment to the Action Plan within 45 calendar days. HUD must respond to approve or disapprove the substantial amendment within 30 calendar days of receiving the revisions or resubmission.

I.C.6.b.
Nonsubstantial amendment.
The grantee must notify HUD, but is not required to seek public comment, when it makes any amendment to the Action Plan that is not substantial. HUD must be notified at least five business days before the amendment becomes effective. However, as mentioned above, every amendment to the Action Plan (substantial and nonsubstantial) must be numbered sequentially and posted on the grantee's website. The Department will acknowledge receipt of the notification of nonsubstantial amendments via email within five business days.

II. Phase Two: Financial Certification and Oversight of Funds

II.A. Certification of Adequate Financial Controls and Procurement Processes, and Procedures for Proper Grant Management

Appropriations acts typically require that the Secretary certify that the grantee has proficient financial controls and procurement processes and procedures in place to prevent any duplication of benefits (DOB) as defined by section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1974, as amended (“the Stafford Act”), (42 U.S.C. 5155), to ensure timely expenditure of funds, to maintain a comprehensive website regarding all disaster recovery activities assisted with these funds, and to detect and prevent waste, fraud, and abuse of funds.

II.A.1.
Documentation requirements.
To enable the Secretary to make this certification, each grantee must submit to HUD the certification documentation listed below. This information must be submitted within 135 calendar days of

the applicability date of the AAN. Historically, grant agreements have not been executed until the Secretary has issued a certification for the grantee. For each of the items outlined in sections II.A.1.a. through II.A.1.g. below (collectively referred to as the “Financial Management and Grant Compliance Certification Requirements”), the grantee must certify to the accuracy of its submission when submitting the Financial Management and Grant Compliance Certification Checklist (the “Certification Checklist”). The Certification Checklist is a document that incorporates all of the Financial Management and Grant Compliance Certification Requirements. HUD will review the grantee's certification documentation within 45 calendar days from the date of receipt.

II.A.1.a.
Proficient financial management controls.
A grantee has proficient financial management controls if the grantee's agency administering this grant submits its most recent single audit and Annual Comprehensive Financial Report (ACFR), which in HUD's determination indicates that the grantee has no material weaknesses, deficiencies, or concerns that HUD considers to be relevant to the financial management of CDBG, CDBG-DR, or Community Development Block Grant Mitigation (CDBG-MIT) funds. If the single audit or ACFR identified weaknesses or deficiencies, the grantee must provide documentation satisfactory to HUD showing how those weaknesses have been removed or are being addressed.

II.A.1.b.
Procedures for procurement.
Each grantee must provide HUD with its procurement processes for review, so HUD may evaluate the grantee's processes to determine that they are based on principles of full and open competition. A grantee has adequate procurement processes if the grantee complies with the procurement requirements at section III.B.7., including:

(i) A State grantee has proficient procurement processes if HUD determines that its procurement processes reflect that it:

(1) adopted 2 CFR 200.318 through 200.327 for both its own procurement processes and for its subrecipients;

(2) follows its own State procurement policies and procedures based on full and open competition and establishes requirements for procurement processes for local governments and subrecipients based on full and open competition pursuant to 24 CFR 570.489(g), and the requirements for the State, its local governments, and subrecipients to evaluate the cost or price of the product or service and comply with 2 CFR 570.489(l); or

(3) adopted 2 CFR 200.317, meaning that it will follow its own State procurement processes based on full and open competition, evaluate the cost or price of the product or service, and comply with 2 CFR 570.489(l), but impose 2 CFR 200.318 through 200.327 on its subrecipients.

Additionally, if the State agency designated as the administering agency chooses to provide funding to another State agency, the administering agency must specify in its procurement processes whether the agency implementing the CDBG-DR activity must follow either i.) the procurement processes that the administering agency is subject to, or ii.) the same processes to which other local governments and subrecipients are subject, or iii.) the procurement processes that the agency carrying out the activity normally follows.

(ii) A local government grantee has proficient procurement processes if the processes are consistent with the specific applicable procurement standards identified in 2 CFR 200.318 through 200.327, and 200.214. When the grantee provides a copy of its procurement processes, it must indicate the sections that incorporate these provisions.

II.A.1.c.
Policies and procedures to maintain a comprehensive disaster recovery website.
A grantee has adequate policies and procedures to maintain a comprehensive and accessible disaster recovery website if it submits policies and procedures indicating to HUD that the grantee will have a separate web page dedicated to its CDBG-DR funded activities including the information described at section III.B.8. The procedures must also indicate the frequency of website updates. At a minimum, grantees must update their official disaster recovery website quarterly.

II.A.1.d.
Procedures to detect and prevent fraud, waste, and abuse.
A grantee has adequate procedures to detect and prevent fraud, waste, and abuse if it submits procedures that indicate:

(i) how the grantee will verify the accuracy of information provided by applicants;

(ii) the criteria to be used to evaluate the capacity of potential subrecipients;

(iii) the frequency with which the grantee will monitor other agencies of the grantee that will administer CDBG-DR funds, and how it will monitor subrecipients, contractors, and other program participants, and why monitoring is to be conducted, and which items are to be monitored;

(iv) if the grant size is $100 million or more, the grantee has or will employ an internal auditor that provides both programmatic and financial oversight of grantee activities and has adopted policies that describe the auditor's role in detecting and preventing fraud, waste, and abuse;

(v) (1) for States or grantees subject to the same requirements as States, a written standard of conduct and conflicts of interest policy that complies with the requirements of 24 CFR 570.489(g), (h), and (l) and subparagraph II.A.1.b.(i)
Procedures for procurement
of the Universal Notice, which policy includes the process for promptly identifying and addressing such conflicts;

(2) for local government grantees, a written standard of conduct and conflicts of interest policy that complies with 24 CFR 570.611 and 2 CFR 200.318, as applicable, which policy includes the process for promptly identifying and addressing such conflicts; and

(vi) how it will assist in investigating and taking action when fraud occurs within the grantee's CDBG-DR activities and/or programs. Following a disaster, property owners and renters are frequently the targets of people fraudulently posing as government employees, creditors, mortgage servicers, insurance adjusters, and contractors. All grantees receiving CDBG-DR funds for the first time shall attend and require subrecipients to attend fraud related training provided by HUD Office of Inspector General (OIG), when offered, to assist in the proper management of CDBG-DR grant funds. Grantees must report to the appropriate HUD CPD staff member that it met this requirement and who attended the training. In accordance with 2 CFR 200.113, grantees and subrecipients of CDBG-DR must promptly inform in writing the OIG and HUD when it has credible evidence of violations of Federal criminal law involving fraud, bribery, or gratuities or a violation of the civil False Claims Act that could potentially affect the Federal award at
https://www.hudoig.gov/hotline/report-fraud
(a subrecipient of CDBG-DR must also inform the CDBG-DR grantee that awarded it funding). All other instances of fraud, waste, and abuse should be referred to the HUD OIG Fraud Hotline (phone: 1-800-347-3735 or email:
hotline@hudoig.gov
).

Grantees must address in their policies and procedures:

(1) how it will provide CDBG-DR beneficiaries with information that

raises awareness of possible fraudulent activity, how fraud can be avoided, and what local or State agencies to contact to take action and protect the grantee and beneficiary investment:

(2) how the grantee will make CDBG-DR beneficiaries aware of the risks of contractor fraud and other potentially fraudulent activity that can occur in communities recovering from a disaster; and

(3) the steps it will take to assist a CDBG-DR beneficiary if the beneficiary experiences contractor or other fraud. If the beneficiary is eligible for additional CDBG-DR assistance because the fraudulent activity results in the creation of additional unmet need, the procedures must also address what steps the grantee will follow to provide additional assistance.

II.A.1.e.
Policies and procedures to prevent DOB.
A grantee has adequate policies and procedures to prevent the DOB if the grantee submits and identifies a uniform process that reflects the requirements in Appendix C of the Universal Notice, including:

(i) determining all disaster assistance received by the grantee or applicant and all reasonably identifiable financial assistance available to the grantee or applicant, as applicable, before committing funds or awarding assistance;

(ii) determining a grantee's or an applicant's unmet need(s) for CDBG-DR assistance before committing funds or awarding assistance;

(iii) requiring beneficiaries to enter into a signed agreement to repay any duplicative assistance if they later receive assistance for the same purpose for which the CDBG-DR award was provided. The grantee must identify a method to monitor compliance with the agreement for a reasonable period (
i.e.,
a time period commensurate with risk) and must articulate this method in its policies and procedures, including the basis for the period during which the grantee will monitor compliance. This agreement must also include the following language: “Warning: Any person who knowingly makes a false claim or statement to HUD or causes another to do so may be subject to civil or criminal penalties under 18 U.S.C. 2, 287, 1001 and 31 U.S.C. 3729.”; and

(iv) verifying that CDBG-DR funds will not be used for activities reimbursable by, or for which funds are made available by, FEMA or the U.S. Army Corps of Engineers (USACE). Although the language may vary among appropriations acts, CDBG-DR funds may not be used for activities reimbursable by, or for which funds are made available by FEMA or the USACE.

Policies and procedures of the grantee submitted to support the certification must provide that before the award of assistance, the grantee will use the best, most recent available data from FEMA, the Small Business Administration (SBA), insurers, and any other sources of local, State, and Federal sources of funding to prevent a DOB.

Additionally, HUD can assist CDBG-DR grantees with access to the necessary data to support a DOB review.
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View more information about how to access this data, visit HUD's website here:
https://www.hud.gov/program_offices/comm_planning/cdbg-dr/data-sharing.

II.A.1.f.
Policies and procedures for timely expenditures of grant funds.
A grantee has adequate policies and procedures to determine timely expenditures if it submits policies and procedures that indicate the following to HUD:

(i) how it will track and document expenditures of the grantee and its subrecipients (both actual and projected reported in performance reports);

(ii) how it will ensure proper reporting, tracking, and expenditure of program income, including how it will ensure that program income is substantially disbursed before making additional withdrawals from the United States Treasury, except when carrying out the same activities through a revolving fund (see section III.B.12. and section III.B.13. for additional requirements);

(iii) how it will reprogram funds in a timely manner for activities that are stalled (
e.g.,
a project is more than six months behind schedule); and

(iv) how it will project expenditures of all CDBG-DR funds within the period provided for in section III.F.1.

II.A.1.g.
Capacity assessment and staffing analysis.
To enable HUD to assess risk as described in 2 CFR 200.206, the grantee must submit a capacity assessment and staffing analysis to HUD. The capacity assessment must describe the grantee's capacity to carry out the recovery and how it will address any capacity gaps. HUD will determine that the grantee has sufficient management capacity to adequately reduce risk if the grantee submits a capacity assessment and staffing analysis that meets the following requirements.

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

(1) Identify the lead agency responsible for implementation of the CDBG-DR award and indicate that the head of that agency will report directly to the chief executive officer of the jurisdiction.

(2) Conduct an assessment of its capacity to carry out CDBG-DR recovery efforts.

(3) Develop a timeline with milestones describing when and how the grantee will address all capacity gaps that are identified.

(4) Include a list of any open monitoring and HUD OIG audit findings related to any CPD program and an update on the corrective actions undertaken to address each finding.

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

(1) Submit an organizational chart of the department or division and provide a table that clearly indicates which personnel, or organizational unit will be responsible for each of the Financial Management and Grant Compliance Certification Requirements identified in section II.A.1.a. through f. along with staff contact information, if available.

(2) Submit documentation demonstrating that it has assessed staff capacity and identified positions for the purpose of: case management in proportion to the applicant pool; program managers who will be assigned responsibility for each primary recovery area (
e.g.,
housing, infrastructure, and economic revitalization); staff who have demonstrated experience in housing, infrastructure (as applicable), and economic revitalization (as applicable); staff responsible for procurement/contract management, regulations implementing Section 3 of the Housing and Urban Development Act of 1968, as amended (24 CFR 75) (Section 3), URA and its implementing regulations, section 104(d) of the HCDA and its implementing regulations, and CDBG acquisition and relocation requirements, fair housing compliance, and environmental compliance. Additionally, demonstrate that the internal auditor, if applicable, and responsible audit staff report independently to the chief elected or executive officer or board of the governing body of any designated administering entity.

(3) Describe how it will provide training and technical assistance for any personnel that are not employed by the grantee at the time of Action Plan submission, and how it will fill gaps in knowledge or technical expertise required for successful and timely recovery. Grantees must also include how it will provide training and technical assistance to its subrecipients.

To fully complete the certification process, the grantee must have completed and submitted the certification documentation required in the applicable Certification Checklist. The grantee's documentation must demonstrate that the standards meet the

requirements in the Universal Notice and the Certification Checklist.

II.B. Relying on Prior Financial Certification Submissions

This section applies to a grantee that has received CDBG-DR funds that are subject to the requirements of the Universal Notice or that received CDBG-DR funds under Public Laws 117-43, 117-180, and 117-328.

For five years after the execution of a grant agreement for an initial allocation of funds a grantee received subject to the Universal Notice, HUD will rely on the grantee's prior submissions provided in response to the Financial Management and Grant Compliance Certification Requirements for any subsequent allocation of funds that is also subject to the Universal Notice. HUD will continue to monitor the grantee's submissions and updates to policies and procedures during the normal course of business.
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View the Community Planning and Development's Monitoring Handbook for more information on HUD monitoring here:
https://www.hud.gov/program_offices/administration/hudclips/handbooks/cpd/6509.2.

For grantees that have received CDBG-DR funds under Public Laws 117-43, 117-180, and 117-328, HUD may rely on a grantee's prior submissions provided in response to the Financial Management and Grant Compliance Certification Requirements for five years after the execution of a grant agreement for an initial allocation of funds under those Public Laws.

If it has been more than five years since the executed grant agreement for the original CDBG-DR grant under the Universal Notice or under Public Laws 117-43, 117-180, and 117-328, grantees must update and resubmit the documentation required by section II.A.1. with the completed Certification Checklist. However, the Secretary may require any CDBG-DR grantee to update and resubmit the documentation required by section II.A.1., if there is good cause to require it.

II.C. Obligation and Expenditure of Funds

Once HUD approves the Action Plan and makes the required certification of financial controls and procurement processes, and adequate procedures for proper grant management HUD will then sign a grant agreement obligating funds to the grantee. In addition, HUD will establish the line of credit, and the grantee will receive DRGR system access (if it does not already have DRGR system access). The grantee will follow the DRGR Action Plan process to draw funds (see section III.G.).

The grantee must meet the applicable environmental requirements before the use or commitment of funds for each activity. After the responsible entity (1) completes an environmental review(s) pursuant to 24 CFR part 58 and receives from HUD or the State, as outlined in 24 CFR 58.18, an approved RROF and certification (as applicable), or (2) adopts another Federal agency's environmental review and receives from HUD or the State, an approved RROF and certification (as applicable), the grantee may draw down funds from the line of credit for an activity. The disbursement of CDBG-DR funds must begin no later than 180 calendar days after HUD (1) executes a grant agreement with the grantee, or (2) approves the Action Plan and financial certification and oversight of funds, whichever is later. Failure to draw funds within this timeframe may result in HUD's review of the grantee's certification of its financial controls, procurement processes, and capacity, and may result in the imposition of any corrective actions deemed appropriate by HUD pursuant to 24 CFR 570.495, 24 CFR 570.910, or 24 CFR 1003.

III. Phase Three: Implementation of Universal Notice Requirements

III.A. Policies and Procedures—Universal Notice Requirements

III.A.1.
Development of program-specific policies and procedures.
Grantees must develop program-specific policies and procedures governing the use of funds. The Universal Notice requires each grantee to prioritize policies and procedures for its programs that address its unmet housing recovery needs. Grantees must create and finalize policies and procedures for their housing programs no later than one year from the applicability date of the AAN. Not later than eighteen months from the applicability date of the AAN, grantees must create and finalize policies and procedures governing the rest of its CDBG-DR funded programs (
e.g.,
economic revitalization, infrastructure, public service activities, and any other eligible activities the grantee will fund) that shall be subject to HUD review. If a grantee has determined that it does not have unmet housing needs in the MID areas, the grantee must create policies and procedures for its other programs and activities no later than one year from the applicability date of the AAN.

III.A.2.
Required policies and procedures for all CDBG-DR funded programs.
This section outlines the specific requirements that grantees must adhere to when developing their policies and procedures. Grantees must ensure their procedures comply with several key requirements, such as fair housing and civil rights compliance and minimizing displacement. Additionally, there are program-specific requirements that grantees must meet depending on the type of program (
e.g.,
housing programs). Beyond the requirements described below, each grantee's program-specific policies and procedures must adhere to the overarching policies and procedures they certified to (refer to
Phase Two: Financial Certification and Oversight of Funds
of the Universal Notice) including the requirement to build procedures to detect and prevent fraud, waste, and abuse; and any requirements set forth in this notice or the regulations on other cross-cutting requirements (
e.g.,
environmental reviews, Davis Bacon Act, Section 3, Lead Safe Housing, etc.). Additionally, the grantee's program-specific policies and procedures must align with the information in the Action Plan (including the grantee's proposed allocations), as amended and approved by HUD.

III.A.2.a.
Fair housing and civil rights policies and procedures.
Each program-specific policy and procedure must address the following requirements on fair housing and civil rights:

(i) a description of how the grantee's use of their CDBG-DR funds is consistent with their obligation to AFFH. For example, grantees may undertake a variety of actions consistent with the requirements to AFFH such as: (1) overcoming prior disinvestment in housing, infrastructure, and public services for protected class groups in the MID areas, especially where such groups are highly concentrated; (2) enhancing (a) the accessibility of disaster preparedness, resilience, or recovery services, including the accessibility of evacuation services and shelters for individuals with disabilities in the MID areas; (b) the provision of critical disaster-related information in accessible formats; and/or (c) the availability of integrated, accessible housing and supportive services; or (3) using CDBG-DR funds to mitigate environmental concerns and increase resilience among protected class groups to protect against the effects of extreme weather events and other natural hazards in the MID areas. Note, grantees must update these policies and procedures to remain in compliance with AFFH requirements as HUD may update its guidance and rules;

(ii) a description of how their proposed allocations to projects and activities, selection criteria, and other actions can be expected to reduce

barriers for individuals, vulnerable populations, protected classes, and other underserved communities (as applicable);

(iii) a description of how each program will enhance for individuals with disabilities in the MID areas (1) the accessibility of disaster preparedness, resilience, or recovery services, including the accessibility of evacuation services and shelters; (2) the provision of critical disaster-related information in accessible formats; and/or (3) the availability of integrated, accessible housing and supportive services;

(iv) identification of the proximity of natural and environmental hazards (
e.g.,
industrial corridors, sewage treatment facilities, waterways, EPA superfund sites, brownfields, etc.) to affected populations in the MID area, including members of protected classes, vulnerable populations, and other underserved communities; and a description of how each program will mitigate these specific environmental concerns and increase resilience among these populations in the MID area to protect against current and future hazard risks.

III.A.2.b.
Minimizing displacement and relocation policies and procedures.
Each program-specific policy and procedure must address the following requirements on minimizing displacement and relocation assistance, as appropriate:

(i) a description of how the grantee plans to minimize displacement of persons or entities, and assist any persons or entities displaced, and ensure accessibility needs of displaced persons with disabilities. Grantees must seek to minimize displacement or the adverse impacts from displacement, consistent with the requirements of section III.B.15.a. of the Universal Notice, Section 104(d) of the HCDA (42 U.S.C. 5304(d)) and implementing regulations at 24 CFR part 42, and 24 CFR 570.488 or 24 CFR 570.606, as applicable;

(ii) grantees must amend an existing Residential Anti-displacement and Relocation Assistance Plan (RARAP) or create a new RARAP specific to CDBG-DR. Grantees must meet the requirements in section III.B.15.a., related to the RARAP prior to implementing any activity with CDBG-DR grant funds, such as buyouts and other disaster recovery activities; and

(iii) grantees must also describe how they will provide relocation assistance to persons or entities displaced under the URA and its implementing regulations at 49 CFR part 24, and under an optional relocation policy under 24 CFR 570.606(d), when applicable. Grantees must also plan and budget for such relocation activities. The description will outline methods for identifying the needs of the potentially displaced persons including site visits, interviews, and orientations. It will also cover budget development variables like housing market conditions, acquisition costs, relocation payments, and professional services costs. Planning and budgeting must precede any action that will cause displacement and/or temporary relocation (including programmatic optional relocation) and should be scoped to the complexity and nature of the anticipated displacing activity including an evaluation of program resources available to carry out timely and orderly relocations.

Finally, not all eligible activities will trigger displacement (
e.g.,
planning). In such cases, the grantee should include in its policies and procedures an explanation that minimizing displacement is not applicable because displacement will not occur.

III.A.2.c.
Mitigation policies and procedures.
Each program-specific policy and procedure must address the following requirements on mitigation and resilience:

(i) how mitigation measures and strategies to reduce natural hazard risks will be integrated into the construction, reconstruction, or rehabilitation of residential or non-residential buildings;

(ii) how CDBG-DR investments will be designed and constructed to withstand chronic stresses and extreme events related to a changing climate by identifying and implementing resilience performance measures in DRGR.

III.A.2.d.
Timeliness policies and procedures.
As part of the development of a grantee's program-specific policies and procedures, each grantee must also develop projected expenditures and outcomes. The projections must be based on each quarter's expected performance—beginning with the first quarter funds are available to the grantee and continuing each quarter until all funds are expended. The grantee must include in its policies and procedures how it will monitor its expenditures and outcomes against the projections. The grantee must upload these projections into DRGR and then post this information on its public website as required by section III.B.8.

III.A.3.
Required policies and procedures for housing programs.

In addition to the requirements in III.A.2., all policies and procedures related to housing activities must also address the following requirements:

(i) a description of the process the grantee will use to provide exceptions to the maximum amount of assistance on a case-by-case basis. At a minimum, the grantee's policies and procedures must communicate how it will analyze the circumstances under which an exception is needed and how it will demonstrate that the amount of assistance is necessary and reasonable;

(ii) a description of how its program will align and build upon any funding received from HUD's Rapid Unsheltered Survivor Housing (RUSH) program, as applicable;

(iii) a description of the building standards and codes to be used by construction contractors performing work in the jurisdiction and the mechanisms to be used by the grantee to assist beneficiaries in responding to contractor fraud, poor quality work, and associated issues. Grantee policies and procedures must require a warranty period post-construction with a formal notification to beneficiaries on a periodic basis (
e.g.,
one year and one month before expiration date of the warranty);

(iv) a description of the grantee's affordability standards, including “affordable rents,” the enforcement mechanisms, and applicable timeframes, that will apply to the new construction of affordable rental housing of five or more units, as required in section III.D.5.d;

(v) a description of how the grantee will use social media platforms to alert its residents when its applications for housing activities are open and when it is holding public hearings on CDBG-DR plans or projects;

(vi) a description of the grantee's process for accepting alternative methods for documenting ownership. Grantees may include the following documentation as acceptable: deed, title, mortgage documentation, tax receipts or bills, home insurance, home purchase contracts, will or affidavit or heirship naming them as heir, receipts of major repairs completed prior to the disaster, court documents, letter from a manufactured housing community owner or public official, self-certification, or utility bills; and

(vii) a description of the basic DOB framework for housing activities. Grantee policies and procedures must follow the process outlined in Appendix C in the Universal Notice and include how the grantee will carry out the following steps for each beneficiary: (1) assess applicant's total need; (2) identify total assistance; (3) exclude non-duplicative amounts; (4) exclude funds for a different purpose; (5) exclude funds for the same purpose, different allowable use; (6) identify a final DOB amount (if any) and calculate the CDBG-DR award; and (7) reassess

unmet need when necessary. Grantees must include the requirement to have beneficiaries sign an agreement to repay any assistance later received for the same purpose as the CDBG-DR funds (
e.g.,
a subrogation agreement) and include any other required steps listed in Appendix C.

A grantee that will be coordinating with a HUD-approved Housing Counseling Agency
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would include what information and services it will make available to both renters and homeowners.

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View additional information to locate a HUD-approved Housing Counseling Agency here:
https://apps.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?weblistaction=summary.

III.A.4.
Required policies and procedures for infrastructure programs.
In addition to the requirements in section III.A.2., all policies and procedures related to infrastructure activities must also address the following requirements:

(i) how the grantee will address the construction or rehabilitation of disaster-related systems (
e.g.,
storm water management systems) or other disaster-related community-based mitigation systems (
e.g.,
using FEMA's community lifelines). State grantees carrying out infrastructure activities must work with local governments and Indian Tribes in the MID areas to identify the unmet needs and associated costs of disaster-related infrastructure improvements;

(ii) how the grantee will plan for the long-term operation and maintenance of infrastructure and public facility projects funded by CDBG-DR, as maintenance and repair of public facilities and improvements is generally ineligible. Grantees must plan for the long-term sustainability of these projects, including who will pay these costs and who will operate and maintain the projects once they are complete;

(iii) the extent to which CDBG-DR funded infrastructure activities will achieve objectives outlined in regionally or locally established plans and policies that are designed to reduce future risk to the jurisdiction;

(iv) how the grantee will align infrastructure investments with other planned Federal, State, or local capital improvements and infrastructure development efforts, and will work to foster the potential for additional infrastructure funding from multiple sources, including State and local capital improvement projects and private investment;

(v) how the grantee will prioritize infrastructure within historically underserved communities that lacked adequate investments in housing, transportation, water, and wastewater infrastructure prior to the disaster; and

(vi) a description of the basic DOB framework for infrastructure activities. Grantee policies and procedures must follow the process outlined in Appendix C in the Universal Notice and include how the grantee will carry out the following steps for each entity (
e.g.,
local government) assisted: (1) assess applicant's total need; (2) identify total assistance; (3) exclude non-duplicative amounts; (4) exclude funds for a different purpose; (5) exclude funds for the same purpose, different allowable use; (6) identify a final DOB amount (if any) and calculate the CDBG-DR award; and (7) reassess unmet need when necessary. In its policies and procedures, the grantee must include how it will identify whether any local or State funds are available for these types of activities. And if local or State funds were previously designated or planned for the activity, but are no longer available, the grantee must describe how it will document that the local government recipient does not have funds set aside for the activity in any capital improvement plan (or similar document showing planned use of funds). The grantee must include any other required steps listed in Appendix C.

III.A.5.
Required policies and procedures for economic revitalization programs.
In addition to the requirements in section III.A.2., all policies and procedures related to economic revitalization activities must also address the following requirements:

(i) a description of how the grantee will prioritize underserved communities that have been impacted by the disaster and that were economically distressed before the disaster, as described in section III.D.7.a. While HUD defines the minimum standard for underserved communities in section I.C.1.c.,
g
rantees must describe how they will further define areas that are considered underserved communities;

(ii) a description of how the grantee will use social media platforms to alert its residents when its applications for economic development activities are open and when it is holding public hearings on CDBG-DR plans or projects; and

(iii) a description of the basic DOB framework for economic revitalization activities. Grantee policies and procedures must follow the process outlined in Appendix C in the Universal Notice and include how the grantee will carry out the following steps for each business assisted: (1) assess applicant's total need; (2) identify total assistance; (3) exclude non-duplicative amounts; (4) exclude funds for a different purpose; (5) exclude funds for the same purpose, different allowable use; (6) identify a final DOB amount (if any) and calculate the CDBG-DR award; and (7) reassess unmet need when necessary. Grantees must include the requirement to have entities sign an agreement to repay any assistance later received for the same purpose as the CDBG-DR funds (
e.g.,
a subrogation agreement) and include any other required steps listed in Appendix C.

III.A.6.
Consultation and website requirements for program implementation policies.
To promote effective program design and public transparency, grantees must comply with the consultation and disaster recovery website requirements for program implementation policies as described in this section. Note, grantees are not expected to release all program policies and procedures at once and can develop and publish program-specific policies and procedures in phases, as programs are ready to launch. However, grantees must comply with the timelines identified in section III.A.1. of the Universal Notice for creating and finalizing program-specific policies and procedures. The grantee must also update its citizen participation plan (see section I.C.2.) to describe how it will comply with the requirements of sections III.A.6.a. and III.A.6.b.

III.A.6.a.
Consultation with citizen advisory groups.
Grantees are required to gather feedback and recommendations on key program decisions from its citizen advisory group at least annually. A citizen advisory group is a body composed of individuals from a community who volunteer or are appointed to provide input, advice, and recommendations on various issues and policies affecting their community. These groups typically serve as a bridge between the general public and decision-makers, offering insights, perspectives, and expertise to help inform and shape decisions that impact the community's well-being and development. A citizen advisory group will look different in each community because each community is unique. Generally, the individuals who volunteer or are appointed should represent the demographics of the community it is supporting. For example, a citizen advisory group in a community that is predominantly renters should include individuals who are renters. A citizen advisory group in a community that has a large share of a specific racial or ethnic minority group should include

members of that specific racial or ethnic minority group. Each grantee can determine the cadence of meetings and how the group will provide feedback to the grantee. As an example, a citizen advisory group may review program-specific policies and procedures to determine if programs are adequately reaching and assisting intended beneficiaries and are achieving intended program outcomes. The grantee must describe the process it will follow for the citizen advisory group in its citizen participation plan.

III.A.6.b.
Publication of program-specific policies and procedures.
Grantees must prominently post final program-specific policies and procedures on their official disaster recovery website within the timeline identified in section III.A.1. of the Universal Notice. In addition, these program-specific policies and procedures must be available to the public on the website before the grantee formally begins accepting applications for that program. Grantees must also comply with the general website requirements of section III.B.8. of the Universal Notice.

III.A.7.
HUD program-specific policies and procedures review process.
Within two years from the applicability date of the AAN, HUD will review the grantee's program-specific policies and procedures, either onsite or through remote monitoring, for compliance with the requirements in section III. If a grantee's program-specific policies and procedures are not in compliance with the requirements of the Universal Notice, HUD may undertake corrective and remedial actions as described in section III.F.2.a. HUD will continue to monitor the grantee's program-specific policies and procedures during the normal course of business (
i.e.,
CPD's Monitoring Handbook and applicable CPD Notice Implementing Risk Analyses for CPD programs).

III.B. Grant Administration

III.B.1.
Overall benefit.
Consistent with the HCDA, 24 CFR 570.484 and 24 CFR 570.200(a)(3), the Universal Notice requires grantees to comply with the overall benefit requirement that 70 percent of funds be used for activities that benefit LMI persons. For purposes of a CDBG-DR grant, HUD is establishing an alternative requirement that the overall benefit test shall apply only to the grant of CDBG-DR funds described in the AAN and related program income.

A grantee may request a waiver of the overall benefit requirement to reduce the LMI benefit requirement below 70 percent of the total grant. To request a waiver, the grantee must submit a substantial amendment, and provide a justification that, at a minimum: (a) identifies the planned activities that meet the needs of its LMI population; (b) describes proposed activities and programs that will be affected by the alternative requirement, including their proposed location(s) and role(s) in the grantee's long-term disaster recovery plan; (c) describes how the activities/programs identified in (b) prevent the grantee from meeting the 70 percent requirement; (d) demonstrates that LMI persons' disaster-related needs have been sufficiently met and that the needs of non-LMI persons or areas are disproportionately greater, and that the jurisdiction lacks other resources to serve non-LMI persons; and (e) demonstrates a compelling need for HUD to lower the percentage of the grant that must benefit LMI persons.

III.B.1.a.
Use of the “upper quartile” or “exception criteria.”
The LMA benefit requirement is modified when communities have few, if any, areas within their jurisdiction that have 51 percent or more LMI residents. In such a community, activities must serve an area that contains a percentage of LMI residents that is within the upper quartile of all census-block groups within its jurisdiction in terms of the degree of concentration of LMI residents. HUD determines the lowest proportion a grantee may use to qualify an area for this purpose and advises the grantee, accordingly. The “exception criteria” (
i.e.,
upper quartile) applies to CDBG-DR funded activities in entitlement communities covered by such criteria, including entitlement communities that receive disaster recovery funds from a State. Each year, HUD publishes the most recent data here:
https://www.hudexchange.info/programs/acs-low-mod-summary-data/acs-low-mod-summary-data-exception-grantees/.

III.B.1.b.
Clarification of the use of “uncapped” income limits.
The Quality Housing and Work Responsibility Act of 1998 (Title V of Pub. L. 105-276) enacted a provision that directs the Department to grant exceptions to at least 10 jurisdictions that are currently “capped' under HUD's low and moderate-income limits. Under this exception, several CDBG entitlement grantees may use “uncapped” income limits that reflect 80 percent of the actual median income for the area. Each year, HUD publishes guidance on its website identifying which grantees may use uncapped limits:
https://www.huduser.gov/portal/datasets/cdbg-income-limits.html.

Accordingly, HUD clarifies that the annual uncapped income limits published by HUD apply to CDBG-DR funded activities in jurisdictions covered by the uncapped limits, including jurisdictions that receive disaster recovery funds from a State CDBG-DR grantee.

III.B.2.
Use of the urgent need national objective.
Because HUD provides CDBG-DR funds only to grantees with documented disaster-related impacts and each grantee is limited to spending funds only for the benefit of areas that received a Presidential disaster declaration, the Secretary finds good cause to waive the urgent need national objective criteria in section 104(b)(3) of the HCDA (42 U.S.C. 5304(b)(3)) and to establish the following alternative requirement for any CDBG-DR grantee using the urgent need national objective for a period of 36 months after the applicability date of the grantee's AAN.

Pursuant to this alternative requirement, grantees that use the urgent need national objective must address the following three criteria in their Action Plan: (i) describe in the unmet needs assessment why specific needs have a particular urgency, including how the existing conditions pose a serious and immediate threat to the health or welfare of the community; (ii) identify each program or activity that will use the urgent need national objective—either through its initial submission or through a substantial amendment to the Action Plan submitted by the grantee within 36 months of the applicability date of the grantee's initial AAN; and (iii) document how each program and/or activity funded under the urgent need national objective responds to the urgency, type, scale, and location of the disaster-related impact as described in the grantee's unmet needs assessment.

This alternative urgent need national objective is in effect for a period of 36 months following the applicability date of the grantee's initial AAN. After 36 months, the grantee will be required to follow the criteria established in section 104(b)(3) of the HCDA (42 U.S.C. 5304(b)(3)) and its implementing regulations in 24 CFR part 570 when using the urgent need national objective for any new programs and/or activities added to an action plan.

III.B.3.
Administration cap.
Historically, the appropriations acts authorize up to five percent of the grant (plus five percent of program income generated by the grant) to be used for administrative costs (
i.e.,
program administrative costs) by the grantee or its subrecipients. The Secretary does not

have the authority to waive or specify an alternative requirement to increase the grant administration cap. Thus, the total of all costs classified as administrative for a CDBG-DR grant must be less than or equal to the five percent cap (plus five percent of program income generated by the grant). The cap for administrative costs is subject to the combined technical assistance and administrative cap for State grantees as discussed in section III.C.1. For example, administrative activities include the grantee's overall grant management, internal auditor activities, and DRGR recordkeeping.
15

15
View HUD's guidance on allocating costs between program administrative costs, activity delivery costs, and planning costs for CDBG-DR Grantees published in CPD Notice 23-06 here:
https://www.hud.gov/sites/dfiles/OA/images/2023-06cpdn.pdf.

III.B.3.a.
Use of funds for administrative costs across multiple grants.
The appropriations acts may authorize special treatment of grant administrative funds. Grantees receiving funds under the Universal Notice, and that have received CDBG-DR or CDBG-MIT grants in the past or in any future acts, may use eligible administrative funds (up to five percent of each grant award plus up to five percent of program income generated by the grant) appropriated by these acts for the cost of administering any CDBG-DR or CDBG-MIT grant without regard to the particular disaster appropriation from which such funds originated. If the grantee chooses to exercise this authority, the grantee must (i) have appropriate financial controls to comply with the requirement that the amount of grant administration expenditures for each CDBG-DR or CDBG-MIT grant will not exceed five percent of the total grant award for each grant (plus five percent of program income generated by the grant); (ii) review and modify its financial management policies and procedures regarding the tracking and accounting of administration costs, as necessary; and (iii) address the adoption of this treatment of administrative costs in the applicable portions of its Financial Management and Grant Compliance submissions as referenced in section II.A. Grantees are reminded that all uses of funds for program administrative activities must qualify as an eligible administration cost.

III.B.4.
Planning cap.
Both State and local government grantees are limited to spending a maximum of 15 percent of their total grant amount on planning costs. Planning costs subject to the 15 percent cap are those defined in 42 U.S.C. 5305(a)(12) and more broadly in 24 CFR 570.205. For example, planning activities can include grantees conducting feasibility studies, marketing studies, local mitigation plans, and long-term disaster recovery plans.
16

16
View HUD's guidance on allocating costs between program administrative costs, activity delivery costs, and planning costs for CDBG-DR Grantees published in CPD Notice 23-06 here:
https://www.hud.gov/sites/dfiles/OA/images/2023-06cpdn.pdf.

III.B.5.
Public service cap.
Both State and local government grantees are limited to spending a maximum of 15 percent of their total grant amount on public services. Public service costs subject to the 15 percent cap are those defined in 42 U.S.C. 5305(a)(8) and more broadly in 24 CFR 570.201(e). For example, public service activities can include mental health services and counseling, and legal services for disaster impacted individuals. The Universal Notice identifies specific activities in III.D. that are exempt from this cap with the waiver and alternate requirements established for each activity.

III.B.6.
Consolidated Plan.
The requirements for consistency with the consolidated plan in Section 106 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12706), and regulations at 24 CFR 91.225(a)(5), and 24 CFR 91.325(a)(5)) are temporarily waived because the effec

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2024-31621. Public record. Not legal advice.