Jessie Handforth Kome, Director of the Office of Block Grant Assistance in HUD’s Office of Community Planning and Development (CPD) answered questions during a webinar conducted by Enterprise Community Partners on April 29. The webinar addressed the first $2 billion allocation of Community Block Grant (CDBG) supplemental funding available to local governments and states through the CARES Act.
The webinar, “How Communities Can Use CDBG Funds to Address Covid-19,” opened with remarks by Priscilla Almodovar, chief executive officer of Enterprise Community Partners. Patrick Jordan, vice president of Enterprise Advisors followed with an overview of CARES Act CDBG resources (CDBG-CV). John Gibbs, acting assistant secretary for CPD, then offered remarks. Marion Mollegen, Enterprise senior vice president of public policy, then moderated questions addressed to Ms. Handforth Kome. This article highlights selected responses from Ms. Handforth Kome.
Determining Income Eligibility
A household’s income is determined at the time assistance is provided. However, a jurisdiction must have a policy and procedure for estimating future income. A household that had income greater than 80% of the area median income (the maximum to be eligible under the CDBG statute’s “low- and moderate-income national objective”) prior to the pandemic may be eligible if their income falls below the 80% AMI threshold due to reduced or lost income at the time CDBG assistance is provided. Presumably, if a jurisdiction reasonably thinks the reduced income is temporary, longer-term assistance might be an issue the jurisdiction’s policy should address.
Emergency Rental Assistance
Emergency rental assistance has long been an eligible activity in the CDBG Entitlement Cities regulations. However, the provision allowing it is found in the “Ineligible Activities” section of the Entitlement regulations at 24 CFR part 570.207(b)(4):
(4) Income payments. The general rule is that CDBG funds may not be used for income payments. For purposes of the CDBG program, “income payments” means a series of subsistence-type grant payments made to an individual or family for items such as food, clothing, housing (rent or mortgage), or utilities, but excludes emergency grant payments made over a period of up to three consecutive months to the provider of such items or services on behalf of an individual or family (emphasis added).
NLIHC adds that emergency rental assistance is considered a “public service.” The CDBG statute states that a jurisdiction cannot obligate more than 15% of its annual CDBG allocation and program income for public services during a program year. The CARES Act suspends the 15% cap, not only for a jurisdiction’s CDBG-CV allocation, but also for FY19 and FY20 allocations provided the funds are used to prevent, prepare for, or respond to the coronavirus.
Ms. Handforth Kome noted that the States and Small Cities CDBG program has different regulations that do not have a similar emergency assistance provision. States must follow the text of the Housing and Community Development Act. However, because states are given “maximum feasible deference,” as Ms. Mollegen noted, they may choose to use the CDBG Entitlement regulations as a “safe harbor.” NLIHC adds that the State CDBG program has sub-regulatory guidance in “Basically CDBG for States” that reiterates this point a number of times.
Ms. Handforth Kome added that CPD will broadly interpret “prevent, prepare for, or respond to the coronavirus.” Jurisdictions simply need to be reasonable and explain how proposed uses will “prevent, prepare for, or respond to the coronavirus.” She said that CPD will be providing tools regarding use of CDBG for emergency rental assistance.
Duplication of Benefits
Ms. Handforth Kome commented that jurisdictions need to be strategic with how they use CDBG and ESG funds. If a project is to receive both, it is important to consider the best use of each. CDBG or ESG should not be used if the use is already covered by another source, nor should CDBG be used to pay for something some other source can cover. In essence, the goal is to maximize all available resources. Grantees should use CDBG and ESG strategically to fill gaps that other sources cannot cover. NLIHC adds that FEMA might be an important source for covering costs such as hotel/motel vouchers.
CPD does not have an “order of assistance” provision about duplication of benefits but is working to develop such guidance. CPD will be working with Enterprise to provide a tool regarding duplication of benefits.
Statutory Requirement to Use 70% of CDBG to Benefit Low- and Moderate-Income People
In response to a question, Ms. Handforth Kome said that CPD has no plans to waive the CDBG statute’s requirement that jurisdictions use at least 70% of their allocation to benefit people with low- and moderate-income (no greater than 80% of the area median income). She added that the CARES Act provides considerable funding for other federal programs, few of which are earmarked for lower-income people.
The webinar recording is at: https://bit.ly/3dhYfs8
The webinar slides area at: https://bit.ly/3c6HqQD
More about regular CDBG is on page 8-3 of NLIHC’s 2020 Advocates’ Guide.