HUD Update. Alanna Kabel, CPD Director, Hartford Field Office Bob Shumeyko, CPD Director, Boston Regional Office

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1 HUD Update Alanna Kabel, CPD Director, Hartford Field Office Bob Shumeyko, CPD Director, Boston Regional Office NCDA Region I Spring Meeting College of the Holy Cross, Worcester May 1, 2018

2 Overview 2018 Consolidated Plan/Action Plan Submittal Housing Counseling Certification Requirements CDBG Timeliness Test 2018 Monitoring HOME Program Updates: - Property Standards - Utility Allowances Staff Changes and Other Announcements

3 2018 Consolidated Plan and Action Plan Submittals

4 Revised Submission Dates NOTICE: CPD Grantees are advised not to submit their consolidated plan/action plan until after FY 2018 allocations have been announced. Once announced, each grantee should ensure that the actual FY 2018 allocation amounts are reflected in the Form SF-424 for each program, the description of resources and objectives (AP-15), and the description of projects to be undertaken (AP-35).

5 Revised Submission Dates (cont.) An affected grantee may delay submission of its consolidated plan or action plan until 60 days after the date allocations are announced, or until August 16, 2018, whichever comes first. In no case may a consolidated plan/action plan be submitted to HUD later than August 16, 2018.

6 HUD Review of Action Plans HUD will disapprove as substantially incomplete any consolidated plan or action plan covering FY 2018 funding that does not reflect actual CDBG, HOME, ESG and HOPWA allocation amounts on the form SF-424 for each program, in the description of resources and objectives (AP-15), and in the description of activities to be undertaken (AP-35). Please double check these amounts before submission!

7 Plan Development and Citizen Participation A grantee may conduct citizen participation on its draft plan (with estimated funding amounts) according to its normal timetable and citizen participation procedures. A grantee doing so should make clear that the funding levels shown are estimated amounts. In addition, the grantee should include contingency provision language in its action plan which explains how it will adjust its proposed plan to match its actual allocation amounts, once actual amounts are known.

8 Plan Development and Citizen Participation (cont.) By including such contingency language, a grantee can avoid the need to make significant revisions to its plan (beyond incorporating the final allocation amounts into the plan). The grantee may also avoid the potential need to conduct additional citizen participation for the revised plan.

9 Pre-award Costs Special attention must be paid to situations in which a grantee wishes to incur costs prior to grant award. For example, under certain programs, a grantee may want to execute annual renewals of agreements with social service providers in order to prevent interruption of services.

10 Pre-award Costs (cont.) To minimize additional workload, Notice CPD provides HUD approval to incur pre-award costs if and when the grantee completes the following documentation in its local files: The grantee documents that the costs incurred prior to grant award are necessary for efficient and timely performance of the activity in question. The grantee documents that the costs are for eligible activities under the regulations for the applicable funding program;

11 Pre-award Costs (cont.) The grantee documents that the grantee has complied with all other requirements for pre-award costs under the regulations for the applicable funding program; The activity for which costs will be incurred is included in a consolidated plan/action plan; The grantee documents completion of its citizen participation process by including in its files a written, dated summary of citizen participation comments received on its plan, pursuant to 24 CFR (b)(5) or (b)(5) as applicable.

12 Pre-award Costs (cont.) If the grantee s files contain all other necessary documentation supporting the costs (described below for each program), the date of HUD approval for pre-award costs is the date of the written summary of citizen participation comments, or the grantee s program year start date, whichever is later.

13 Final Rule for Housing Counseling Certification

14 What is Housing Counseling? HUD Standards In person, phone, internet are acceptable as long as client and counselor can have an individual dialogue Guidance and advice are tailored to client s needs Includes creating a client budget, financial analysis, an action plan, and referrals to relevant resources such as down payment assistance programs or legal services

15 Final Rule on Housing Counseling Certification for CPD Stakeholders Final Rule was published on December 14, Final compliance date for housing counselor is 36 months after examination becomes available. HUD will publish a Federal Register notice to announce the start of testing.

16 Final Rule on Housing Counseling Certification for CPD Stakeholders All housing counseling provided under or in connection with all HUD programs must be performed by a HUD certified housing counselor. A HUD certified housing counselor is a housing counselor who has passed the HUD Certification examination and works for a HUD-approved housing counseling agency.

17 CDBG Timeliness Test

18 What is CDBG Timeliness? Timeliness refers to the statutory requirement that HUD annually determine whether each CDBG grantee is carrying out its program in a timely manner. The grantee must have a balance of no greater than 1.5 times its annual grant remaining in the line-of-credit, 60 days prior to the end of the program year. (CDBG Regulation - 24 CFR )

19 Unadjusted vs. Adjusted Timeliness Ratios IDIS PR56 CDBG Timeliness Report Unadjusted Ratio only the grant balance in LOCCS. Adjusted Ratio includes grant balances and program income, including the balance in revolving loan funds. HUD will use the Adjusted Ratio to determine if a grantee is timely.

20 What happens when a grantee is untimely? 1 st time untimely: Letter from HUD to the grantee Required submission of a workout plan Required quarterly updates 2 nd time untimely: Letter from HUD to Chief Elected Official HUD HQ involvement; conference call with HUD HQ and Field Office Funds at risk (amount above the 1.50 ratio)

21 Tips to Avoid Being Untimely Consolidated Plan and Action Plan Process Manage the planning process so that by the time the Action Plan is in front of citizens, the activities are well thought out. Consider establishing a competitive application process evaluate based on readiness to proceed, capacity, etc. Identify additional activities in the Action Plan that will be available for unexpended program income or when a project is not ready to proceed on schedule.

22 Tips to Avoid Being Untimely Consolidated Plan and Action Plan Process (cont.) Conduct environmental reviews and request release of fund for projects before the Action Plan has been approved. Work on a 3 to 5 year window, shuffling projects among program years depending on readiness.

23 Tips to Avoid Being Untimely Program Management Draw down funds at a minimum of quarterly. Review expenditure of funds monthly for each activity. Reallocate funds as needed. Ensure that revolving loan funds are revolving if not, convert to PI.

24 Tips to Avoid Being Untimely Project Implementation Prioritize project implementation through better coordination with other departments/partners: Link to City/Town capital improvement plan pipeline if possible; and Consider providing activity delivery funds for staff from other departments to dedicate time to CDBG project implementation. Ask CPD for assistance if you encounter any road blocks when trying to implement projects.

25 HOME Program Updates: - Property Standards - Utility Allowances

26 Property Standards

27 Property Standards Pursuant to 24 CFR 92.3(b), the new property standards requirements contained in the 2013 Final Rule (see ) apply to projects to which funds are committed on or after January 24, Property standards requirements are organized by project type new construction, rehabilitation, acquisition without rehabilitation, and manufactured housing.

28 Property Standards (cont.) PJs must also identify and plan for major systems repairs. For rental rehabilitation projects with 26+ units, this must be done via a capital needs assessment. The PJ must require that the scope of rehabilitation work and replacement reserves deposits must be sufficient to ensure the useful life of essential building components throughout the period of affordability. For homeownership housing, major systems must have a useful life of at least five years upon project completion.

29 Property Standards (cont.) In addition to evaluating and updating their property standards, PJs need to evaluate their current processes for inspecting properties to ensure compliance with property standards. The 2013 Rule requires the following inspections and project reviews: An initial property inspection to determine the extent of work to be completed for rehabilitation projects PJ review and approval of project plans (work write-ups) and cost estimates Construction progress and final inspections to ensure that work is done in accordance with the applicable codes, the construction contract, and construction documents Additional guidance on property standards is being developed.

30 Utility Allowances

31 Utility Allowances HOME statute and regulation establish maximum rent limits. Published limits are gross HOME rents that include the cost of utilities. PJs must adjust the maximum rent limit if a tenant pays utilities by subtracting the utility allowance to determine limit for contract rent paid by tenant.

32 Utility Allowances (cont.) A PJ must establish maximum monthly allowances for utilities and services (excluding telephone) and update the allowances annually. A PJ must use the HUD Utility Schedule Model or otherwise determine the utility allowance for the project based on the type of utilities used at the project. PJs are no longer permitted to use the utility allowance established by the local public housing authority.

33 Utility Allowances (cont.) A PJ may establish the utility allowance using staff or contract with a qualified professional. Initial determination may be charged as project related soft cost Subsequent determination may be charged as admin A PJ may require owners to submit a utility allowance calculation for review and approval. A PJ may accept another funder s utility allowance calculation if acceptable method and data applicable to the project are used.

34 Utility Allowances (cont.) The following methodologies meet HOME requirements: 1. HUD Utility Schedule Model 2. Multifamily Housing Utility Analysis 3. Utility Company Estimate 4. LIHTC Agency Estimate 5. Energy Consumption Model (Engineer Model) These methodologies are permitted for LIHTC projects and described in IRS regulations.

35 Utility Allowances (cont.) For units receiving a Project Based Voucher, HUD recognizes that the PBV program requires the use of the PHA utility allowance. PJs may request a waiver of (d)(1) for projects funded with HOME and PBV.

36 Resources HOMEfires Vol. 13, No. 2: How-to-Establish-Utility-Allowances-for-HOME-Assisted-Rental-Units.pdf HUSM Web-based model: Excel-based model: Instructions: 3.doc HUSM Webcast: HUD User: Slide 36

37 2018 Monitoring

38 2018 Monitoring Our 2018 risk analysis is complete and monitoring has begun. Tips for a Successful Monitoring: Review the monitoring exhibits listed in our entrance letter. Have information needed to answer questions in the exhibits readily available for HUD staff to review. We need your cooperation for the monitoring to go smoothly and to be completed in a timely fashion.

39 Staff Changes and Other Announcements

40 Staff Changes We are pleased to have Mark Seigenthaler on board as a Senior CPD Representative in the Boston Office. Mark s first day was April 16. With the addition of Mark to our staff, we have made some changes to staff assignments. You will be notified if your CPD Rep has changed.

41 Other Announcements Based on feedback received after the recent economic development training, the Boston Office is interested in establishing a quarterly or semi quarterly ED working group to discuss CDBG-funded ED activities. If you are interested in participating, please Adam Ploetz at: Adam.C.Ploetz@hud.gov Please check out HUD Region One s CPD webpage at the following address for grantee and CPD contact information and other useful programmatic resources:

42 Questions? U.S. Department of Housing and Urban Development