HUD’s Office of Community Planning and Development (CPD) posted on April 1 the FY20 CARES Act supplemental funding to states and local governments, including $2 billion in Community Development Block Grants (CDBG), $1 billion in Emergency Solutions Grants (ESG), and $53.7 million in Housing Opportunities for Persons with AIDS (HOPWA) formula funds as well as $10 million for HOPWA competitive grants. CARES Act is the acronym for the “Coronavirus Aid, Relief, and Economic Security Act,” which was signed into law on March 27. CPD also posted regular FY20 allocations to states and local governments for CDBG, ESG, HOPWA, and HOME.
Community Development Block Grant (CDBG)
The CARES Act provides up to $5 billion in CDBG supplemental funding. Of that amount, $2 billion, the allocations announced on April 1, are to be distributed to states and entitlement jurisdictions using the same statutory formula used to distribute the regular, annual FY20 CDBG allocations. There is nothing in the Act that suggests that these extra $2 billion must be used to address coronavirus-related needs. Therefore advocates will have to work hard to get as much as possible of this new extra resource allocated to coronavirus-related housing and homelessness needs.
Existing CDBG regulations [24 CFR 570.207(b)(4)] allow the use of CDBG to make “emergency grant payments made over a period of up to three consecutive months to the provider of such items or services [‘food, clothing, housing (rent or mortgage), or utilities’] on behalf of an individual or family.” Therefore, the use of CDBG to provide assistance for up to three months in the form of rent or mortgage assistance and utility payments is an eligible use of CDBG. The CARES Act removes the statutory 15% cap on the amount of a jurisdiction’s CDBG allocation that can be used for “public services,” which the provision of rental or utility payment assistance would normally be considered. The Act limits the exemption from the 15% cap to “activities to prevent, prepare for, and respond to the coronavirus.” The Act also states that a jurisdiction’s FY19 and FY20 CDBG allocations are also free from the 15% public-service cap.
The CARES Act requires an additional $1 billion to be allocated states and insular areas "to prevent, prepare for, and respond to coronavirus within the state or insular area, including activities within entitlement and nonentitlement communities, based on public health needs, risk of transmission of coronavirus, number of coronavirus cases compared to the national average, and economic and housing market disruptions, and other factors as determined by the Secretary, using the best available data.” HUD has 45 days to allocate the $1 billion.
The remaining $2 billion of the $5 billion are to be distributed directly to a state or unit of local government at the discretion of the HUD secretary according to a formula based on factors to be determined by the secretary, prioritizing risk of coronavirus, number of coronavirus cases compared to the national average, and economic and housing market disruptions resulting from coronavirus.
Emergency Solutions Grants (ESG)
The CARES Act provides up to $4 billion in ESG supplemental funding. Of that $4 billion, $2 billion are to be distributed to grantees using the same statutory formula used to distribute the regular, annual FY20 ESG allocations. These $2 billion must distributed within 30 days. The $1 billion ESG allocation posted on April 1 are therefore half of the amount to be distributed within 30 days.
The remaining balance of $2 billion are to be allocated directly to states or units of general local government within 90 days using a formula to be developed by the HUD secretary. These $2 billion must be used for the benefit of unsheltered homeless, sheltered homeless, and those at risk of homelessness, to geographical areas with the greatest need based on factors to be determined by the secretary, such as risk of transmission of coronavirus, high numbers or rates of sheltered and unsheltered homeless, and economic and housing market conditions.
Housing Opportunities for Persons with AIDS (HOPWA)
The CARES Act provides up to $65 million in HOPWA supplemental funding, of which at least $50 million are to be allocated using the formula used to allocate the FY20 HOPWA funds. CPD’s April 1 announcement allocated $53.7 million. The CARES Act also requires that up to $10,000,000 are to be provided as additional one-time, non-renewable awards to grantees currently administering existing contracts for permanent supportive housing. The April 1 CPD posting announced the HOPWA competitive awards amounting to $10 million.
The CARES Act supplemental allocations are at: https://bit.ly/2yvuLIa
The regular FY20 CPD formula programs allocations are at: https://bit.ly/3dSWq5O
More information about CDBG is on page 8-3 of NLIHC’s 2019 Advocates’ Guide.
More information about ESG is on page 4-65 of NLIHC’s 2019 Advocates’ Guide.
More information about HOPWA is on page 4-63 of NLIHC’s 2019 Advocates’ Guide.
More information about HOME is on page 5-3 of NLIHC’s 2019 Advocates’ Guide.