The following are updates about HUD’s efforts related to Hurricanes Harvey, Irma and Maria and the California wildfires, as well as a letter to HUD from advocates about the Community Development Block Grants-Disaster Recovery (CDBG-DR) program.
More than 500 Organizations Signed Letter to HUD
The letter urges HUD to ensure that CDBG-DR funds continue to be targeted toward the housing needs of the lowest income households and that impacted people have adequate time to weigh in on how states and local governments use the recovery and rebuilding funding.
HUD Allocates CDBG-DR to Texas
HUD allocated $57.8 million on October 20 to Texas for Hurricane Harvey recovery through the CDBG-DR program. HUD Secretary Ben Carson described the funds as a “down payment” for recovery. HUD relied on the best available FEMA data to allocate the funds. HUD decided to allocate this CDBG-DR funding because Texas has an existing disaster recovery plan from CDBG-DR funds awarded after flooding in 2016. The FY17 appropriations act included $400 million in CDBG-DR to address the impact of major disasters in 2015 and later; HUD had previously allocated $342 million of this amount to disasters nationwide. As additional data become available, HUD will allocate $7.4 billion appropriated by Congress in September for all 2017 disasters, including Hurricanes Harvey, Irma, and Maria, and the California wildfires.
HUD Waivers and Assistance for Areas Impacted by Hurricanes
Neal Rackleff, assistant secretary for Community Planning and Development (CPD) sent a Memorandum to all CPD Field Office directors, deputy directors, and program managers on October 13 specifying the availability of regulatory waivers for jurisdictions in major disaster areas as a result of Hurricanes Harvey, Irma, and Maria. The waivers apply to four CPD-administered programs: Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), Housing Opportunities for Persons with AIDS (HOPWA), and Emergency Solutions Grants (ESG). The CDBG program discussed in the Memorandum is the regular CDBG program for Entitlement Communities and states; it does not apply to CDBG-DR funds. For each waiver, the Memorandum describes how long the waiver will be in place. Key waivers for CDBG and HOME include:
- The public comment period for substantial amendments to the Annual Action Plan of the Consolidated Plan is reduced from 30 days to seven days.
- The obligation to provide “reasonable” notice to the public and an opportunity to comment when there is a substantial amendment to the Annual Action Plan is waived for Puerto Rico and the Virgin Islands due to the destruction of the communications infrastructure. Grantees are permitted to determine “reasonable.”
- CDBG may be used to construct new housing. Typically, CDBG can be used to construct new housing only if done by special nonprofits.
- The 15% limit on the use of CDBG for public services is removed.
- Grantees may provide Emergency Assistance Payments for up to six months (instead of three months). Emergency Assistance Payments could include assistance to pay rent, utilities, food, clothing, etc.
- Jurisdictions may use up to 20% (up from 10%) of their HOME allocation to cover administration and planning costs due to the disaster.
- The maximum tenant-based rental assistance (TBRA) that can be used toward a household’s rent is waived for two years. Normally the maximum is the difference between the jurisdiction’s rent standard and 30% of a household’s income.
- The 25% jurisdiction match requirement is waived.
- The requirement that 15% of a jurisdiction’s HOME allocation be used by Community Housing Development Organizations (CHDOs) is waived. NLIHC notes that this could significantly disadvantage mission-driven community development organizations.
Technical Issue Could Suspend Section 8 Assistance in Puerto Rico and the Virgin Islands
HUD is prohibited by statute from paying Section 8 subsidies for units that do not have electricity or other utilities because they cannot be considered “decent, safe, and sanitary.” Suspending payments will present a significant challenge for property owners who have done all they can to bring in money, generators, and other resources to keep the units safe under extraordinary circumstances. About 20,000 housing units in 203 projects in Puerto Rico receive Section 8 project-based subsidies to provide affordable housing. A HUD spokesperson said, "Due to the ongoing and unique circumstances in Puerto Rico, we're reviewing every available option to assist residents during this difficult time." The National Association of Realtors and the Institute for Real Estate Management sent a letter of concern to HUD stating, "Without the federal portion of the rent, many of these properties will simply fail, and this stock of affordable housing will be lost."
FHA Extends Foreclosure Relief
The Federal Housing Administration (FHA) is extending its initial 90-day foreclosure moratorium for FHA-insured homeowners impacted by Hurricanes Harvey, Irma, and Maria for an additional 90 days due to the extensive damage and continuing needs in hard-hit areas. FHA is extending this foreclosure relief in presidentially declared counties and municipalities where FEMA is operating its Individual Assistance Program. FHA Mortgagee Letter 2017-15 instructs lenders and servicers to suspend all foreclosure actions against borrowers until the following dates: Hurricane Harvey - February 21, 2018, Hurricane Irma - March 9, 2018, and Hurricane Maria - March 19, 2018.