HomeMy WebLinkAboutSEEDS FOR LIFE_ CDBG PROGRAM_ DARYL ROLLE, SR., CONSUELA CARTER, FAHEEM AND NEAL BLAIR, TIMOTHY WILSON, CHRISTOPHER WRIGHT, JENNIFER TINSLEY MEMORANDUM OF AGREEMENT
November 27, 2018
Seeds For Life Community Development Block Grant (CDBG) Program
This Memorandum of Understanding is for the purpose of establishing the
responsibilities and requirements to be assumed by(name of grant recipient)and the City
of Augusta' Housing and Community Development (HCD) Department in providing a
Business Development grant of$10,000 (ten thousand) dollars to awarded recipients of
the Seeds For Life Grant program.
PROJECT DESCRIPTION
The Seeds For Life Business Development Grant is intended to provide an established
business of twelve months or of more working capital in the amount of$10,000 to foster
both business growth and additional employee retainage or hiring of low-mod eligible
employees. There will be 1o(ten) $10,000 dollar grants awarded: four to "pilot program"
recipients, with the remaining chosen through a competitive panel and a voter selection
process. This grant is intended to give established businesses a monetary infusion to help
them grow and expand their workforce while using the funds for but not limited to: new
or upgraded equipment, increased inventory, employee training, marketing and
advertising activities, new or upgraded signage, working or operating capital to include
salaries of newly hired employees.
GRANT FUNDS
Funding for this Project has been approved by the Augusta-Richmond County
Commission and the U.S. Department of Housing and Urban Development (U.S. HUD)
in the amount of $100,000 as part of the funding established for the Small Business
Development Loan fund. Overall there will be ten grants of $10,000 made to ten
businesses that all must be located in Augusta-Richmond County.
PROJECT ACTIVITIES
Mr. Daryl Rolle, Sr. for Dapper and Company and HCD agree to jointly administer
the "Project"as follows:
Mr. Rolle shall:
1. Comply with the Community Development Block Grant regulations as set forth at
24 CFR Part 570. (attached)
2. Must retain or hire a minimum of one HUD eligible low-moderate employee full
or part-time (see Exhibit D for eligibility requirements attached) with continuing
service for a minimum of twelve months of employment upon receipt of the grant.
(Exhibit D attached)
3. Dapper and Company shall, within six months of receiving funds from AHCD,
provide any and all requested documentation to substantiate the retaining or
hiring of a new full or part-time employee providing background information of
that eligible employee with their hours and responsibilities required for the
business.
4. At the end of the one-year award term, recipient will provide AHCD any and all
information requested related to the use of the CDBG funds for the improvement
of the business and the status of all full and part-time employees involved in this
grant MOA.
5. In the event that Dapper and Company is not able to retain or hire a
part or fulltime employee(s) or if for any reason, AHCD finds reason
that the recipient business misrepresented its intentions or the use of
the funds, HCD retains the right to rescind the grant and recall the
money to be repaid back to the City of Augusta.
6. Dapper and Company is aware that they can receive only one awarded grant
over the entire course of the grant program and once they are awarded can no
longer apply in the future.
The City of Augusta's Housing and Community Development Department shall report to
the U.S. Department of Housing and Urban Development statistics on the number of
persons employed by Dapper and Company.
In Witness Whereof, the parties have set their hands and seals as of the date first written
above.
Attest: Augusta, Georgia
By: Hardie Davis Date:
As Its Mayors i
By: Janice Allen Jackson Date: \ )-\ \'ti
ai Its Adm':istra ei r
4liikv c.,
B : H home Welc` , Jr., Director Date: 12 3 k
ihitt.
Appro lb:s to Form b WILL if , / Date: /1/4 /1
Andrew G. M, cKenzie
General Counsel
By: Daryl lle, Sr., Dapper and Company Date: /���k
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
Tab
CDBG Regulations
24 CFR Part 570
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3rd Floor-Augusta,Georgia 30901
(706)821-1797-Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov
MM.
§570.1 Purpose and primary objective.
(a)This part describes policies and procedures applicable to the following programs authorized under title I of the
Housing and Community Development Act of 1974,as amended:
(1)Entitlement grants program(subpart D);
(2)Nonentitlement Funds:HUD-administered Small Cities and Insular Area programs(subpart F);
(3)State program:State-administered CDBG nonentitlement funds(subpart I);
(4)Special Purpose Grants(subpart E);
(5)Urban Development Action Grant program(subpart G);and
(6)Loan Guarantees(subpart M).
(b)Subparts A,C,J,K,and 0 apply to all programs in paragraph(a)except as modified or limited under the
provisions of these subparts or the applicable program regulations. In the application of the subparts to Special
Purpose Grants or the Urban Development Action Grant program,the reference to funds in the form of grants in the
term "CDBG funds", as defined in§570.3,shall mean the grant funds under those programs.The subparts do not
apply to the State program(subpart I)except to the extent expressly referred to.
(c)The primary objective of the programs authorized under title I of the Housing and Community Development Act of
1974,as amended,is described in section 101(c)of the Act(42 U.S.C. 5301(c)).
[53 FR 34437,Sept.6, 1988,as amended at 56 FR 56126,Oct.31, 1991;61 FR 11475,Mar.20, 1996;69 FR
32778,June 10,20041
§570.3 Definitions.
The terms HUD and Secretary are defined in 24 CFR part 5.All of the following definitions in this section that rely on
data from the United States Bureau of the Census shall rely upon the data available from the latest decennial census.
Act means title I of the Housing and Community Development Act of 1974 as amended(42 U.S.C.5301 et seq. ).
Age of housing means the number of year-round housing units,as further defined in section 102(a)(11)of the Act.
Applicant means a State or unit of general local government that makes application pursuant to the provisions of
subpart E, F,G or M.
Buildings for the general conduct of government shall have the meaning provided in section 102(a)(21)of the Act.
CDBG funds means Community Development Block Grant funds,including funds received in the form of grants under
subpart D, F,or§570.405 of this part,funds awarded under section 108(q)of the Housing and Community
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Development Act of 1974, loans guaranteed under subpart M of this part,urban renewal surplus grant funds,and
program income as defined in§570.500(a).
Chief executive officer of a State or unit of general local government means the elected official or the legally
designated official,who has the primary responsibility for the conduct of that entity's governmental affairs.Examples
of the"chief executive officer"of a unit of general local government are:the elected mayor of a municipality;the
elected county executive of a county;the chairperson of a county commission or board in a county that has no
elected county executive;and the official designated pursuant to law by the governing body of a unit of general local
government.
City means the following:
(1)For purposes of Entitlement Community Development Block Grant and Urban Development Action Grant
eligibility:
(i)Any unit of general local government that is classified as a municipality by the United States Bureau of the Census,
or
(ii)Any other unit of general local government that is a town or township and that,in the determination of the
Secretary:
(A)Possesses powers and performs functions comparable to those associated with municipalities;
(B)Is closely settled(except that the Secretary may reduce or waive this requirement on a case by case basis for the
purposes of the Action Grant program);and
(C)Contains within its boundaries no incorporated places as defined by the United States Bureau of the Census that
have not entered into cooperation agreements with the town or township for a period covering at least 3 years to
undertake or assist in the undertaking of essential community development and housing assistance activities.The
determination of eligibility of a town or township to qualify as a city will be based on information available from the
United States Bureau of the Census and information provided by the town or township and its included units of
general local government.
(2)For purposes of Urban Development Action Grant eligibility only,Guam,the Virgin Islands,American Samoa,the
Commonwealth of the Northern Mariana Islands,the counties of Kauai, Maui,and Hawaii in the State of Hawaii,and
Indian tribes that are eligible recipients under the State and Local Government Fiscal Assistance Act of 1972 and
located on reservations in Oklahoma as determined by the Secretary of the Interior or in Alaskan Native Villages.
Community Development Financial Institution has the same meaning as used in the Community Development
Banking and Financial Institutions Act of 1994(12 U.S.C.4701 note).
Consolidated plan.The plan prepared in accordance with 24 CFR part 91,which describes needs, resources,
priorities and proposed activities to be undertaken with respect to HUD programs,including the CDBG program.An
approved consolidated plan means a consolidated plan that has been approved by HUD in accordance with 24 CFR
part 91.
Discretionary grant means a grant made from the various Special Purpose Grants in accordance with subpart E of
this part.
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Entitlement amount means the amount of funds which a metropolitan city is entitled to receive under the Entitlement
grant program,as determined by formula set forth in section 106 of the Act.
Extent of growth lag shall have the meaning provided in section 102(ax12)of the Act.
Extent of housing overcrowding shall have the meaning provided in section 102(ax10)of the Act.
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Extent of poverty means the number of persons whose incomes are below the poverty level based on data compiled
and published by the United States Bureau of the Census available from the latest census referable to the same point
or period in time and the latest reports from the Office of Management and Budget.For purposes of this part,the
Secretary has determined that it is neither feasible nor appropriate to make adjustments at this time in the
computations of"extent of poverty"for regional or area variations in income and cost of living.
Family means all persons living in the same household who are related by birth,marriage or adoption.
Household means all the persons who occupy a housing unit.The occupants may be a single family,one person
living alone,two or more families living together,or any other group of related or unrelated persons who share living
arrangements.
Income.For the purpose of determining whether a family or household is low-and moderate-income under subpart C
of this part,grantees may select any of the three definitions listed below for each activity,except that integrally related
activities of the same type and qualifying under the same paragraph of§570.208(a)shall use the same definition of
income.The option to choose a definition does not apply to activities that qualify under§570.208(a)(1)(Area benefit
activities),except when the recipient carries out a survey under§570.208(a)(1)(vi).Activities qualifying under
§570.208(ax1)generally must use the area income data supplied to recipients by HUD.The three definitions are as
follows:
(1)(i)"Annual income"as defined under the Section 8 Housing Assistance Payments program at 24 CFR 813.106
(except that if the CDBG assistance being provided is homeowner rehabilitation under§570.202,the value of the
homeowner's primary residence may be excluded from any calculation of Net Family Assets);or
(ii)Annual income as reported under the Census long-form for the most recent available decennial Census.This
definition includes:
(A)Wages,salaries,tips,commissions,etc.;
(B)Self-employment income from own nonfarm business,including proprietorships and partnerships;
(C)Farm self-employment income;
(D)Interest,dividends,net rental income,or income from estates or trusts;
(E)Social Security or railroad retirement;
(F)Supplemental Security Income,Aid to Families with Dependent Children,or other public assistance or public
welfare programs;
(G)Retirement,survivor,or disability pensions;and
(H)Any other sources of income received regularly,including Veterans'(VA)payments,unemployment
compensation,and alimony;or
(iii)Adjusted gross income as defined for purposes of reporting under Internal Revenue Service(IRS)Form 1040 for
individual Federal annual income tax purposes.
(2)Estimate the annual income of a family or household by projecting the prevailing rate of income of each person at
the time assistance is provided for the individual,family,or household(as applicable).Estimated annual income shall
include income from all family or household members,as applicable. Income or asset enhancement derived from the
CDBG-assisted activity shall not be considered in calculating estimated annual income.
Insular area shall have the meaning provided in section 102(a)(24)of the Act.
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Low-and moderate-income household means a household having an income equal to or less than the Section 8
lowincome
limit established by HUD.
Low-and moderate-income person means a member of a family having an income equal to or less than the Section 8
low-income limit established by HUD.Unrelated individuals will be considered as one-person families for this
purpose.
Low-income household means a household having an income equal to or less than the Section 8 very low-income
limit established by HUD.
Low-income person means a member of a family that has an income equal to or less than the Section 8 very
lowincome
limit established by HUD.Unrelated individuals shall be considered as one-person families for this purpose.
Metropolitan area shall have the meaning provided in section 102(a)(3)of the Act.
Metropolitan city shall have the meaning provided in section 102(a)(4)of the Act except that the term"central city"is
replaced by"principal city."
Microenterprise shall have the meaning provided in section 102(a)(22)of the Act.
Moderate-income household means a household having an income equal to or less than the Section 8 low-income
limit and greater than the Section 8 very low-income limit,established by HUD.
Moderate-income person means a member of a family that has an income equal to or less than the Section 8
lowincome
limit and greater than the Section 8 very low-income limit,established by HUD.Unrelated individuals shall be
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considered as one-person families for this purpose.
Nonentitlement amount means the amount of funds which is allocated for use in a State's nonentitlement areas as
determined by formula set forth in section 106 of the Act.
Nonentitlement area shall have the meaning provided in section 102(a)(7)of the Act.
Population means the total resident population based on data compiled and published by the United States Bureau of
the Census available from the latest census or which has been upgraded by the Bureau to reflect the changes
resulting from the Boundary and Annexation Survey, new incorporations and consolidations of governments pursuant
to§570.4,and which reflects,where applicable,changes resulting from the Bureau's latest population determination
through its estimating technique using natural changes(birth and death)and net migration,and is referable to the
same point or period in time.
Small business means a business that meets the criteria set forth in section 3(a)of the Small Business Act(15 U.S.C.
631,636,637).
State shall have the meaning provided in section 102(a)(2)of the Act.
Unit of general local government shall have the meaning provided in section 102(a)(1)of the Act.
Urban county shall have the meaning provided in section 102(ax6)of the Act. For the purposes of this definition,
HUD will determine whether the county's combined population contains the required percentage of low-and
moderate-income persons by identifying the number of persons that resided in applicable areas and units of general
local government based on data from the most recent decennial census,and using income limits that would have
applied for the year in which that census was taken.
Urban Development Action Grant(UDAG)means a grant made by the Secretary pursuant to section 119 of the Act
and subpart G of this part.
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[53 FR 34437,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 56 FR 56126,Oct.31, 1991;60 FR 1915,
1943,Jan.5, 1995;60 FR 56909,Nov.9, 1995;61 FR 5209, Feb.9, 1996;61 FR 11475, Mar.20, 1996; 61 FR
18674,Apr.29, 1996;68 FR 69582, Dec. 12,2003;69 FR 32778,June 10,2004]
§570.4 Allocation of funds.
(a)The determination of eligibility of units of general local government to receive entitlement grants,the entitlement
amounts,the allocation of appropriated funds to States for use in nonentitlement areas,the reallocation of funds,the
allocation of appropriated funds to insular areas,and the allocation of appropriated funds for discretionary grants
under the Secretary's Fund shall be governed by the policies and procedures described in sections 106 and 107 of
the Act,as appropriate.
(b)The definitions in§570.3 shall govern in applying the policies and procedures described in sections 106 and 107
of the Act.
(c)In determining eligibility for entitlement and in allocating funds under section 106 of the Act for any federal fiscal
year,HUD will recognize corporate status and geographical boundaries and the status of metropolitan areas and
principal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1)With respect to corporate status as certified by the applicable State and available for processing by the Census
Bureau as of such date;
(2)With respect to boundary changes or annexations,as are used by the Census Bureau in preparing population
estimates for all general purpose governmental units and are available for processing by the Census Bureau as of
such date,except that any such boundary changes or annexations which result in the population of a unit of general
local government reaching or exceeding 50,000 shall be recognized for this purpose whether or not such changes are
used by the Census Bureau in preparing such population estimates;and
(3)With respect to the status of Metropolitan Statistical Areas and principal cities,as officially designated by the
Office of Management and Budget as of such date.
(d)In determining whether a county qualifies as an urban county,and in computing entitlement amounts for urban
counties,the demographic values of population, poverty,housing overcrowding,and age of housing of any Indian
tribes located within the county shall be excluded. In allocating amounts to States for use in nonentitlement areas,the
demographic values of population,poverty,housing overcrowding and age of housing of all Indian tribes located in all
nonentitled areas shall be excluded. It is recognized that all such data on Indian tribes are not generally available
from the United States Bureau of the Census and that missing portions of data will have to be estimated. In
accomplishing any such estimates the Secretary may use such other related information available from reputable
sources as may seem appropriate, regardless of the data's point or period of time and shall use the best judgement
possible in adjusting such data to reflect the same point or period of time as the overall data from which the Indian
tribes are being deducted,so that such deduction shall not create an imbalance with those overall data.
(e)Amounts remaining after closeout of a grant which are required to be returned to HUD under the provisions of
§570.509, Grant closeout procedures,shall be considered as funds available for reallocation unless the appropriation
under which the funds were provided to the Department has lapsed.
[53 FR 34437,Sept.6, 1988,as amended at 68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.5 Waivers.
HUD's authority for the waiver of regulations and for the suspension of requirements to address damage in a
Presidentially declared disaster area is described in 24 CFR part 5 and in section 122 of the Act,respectively.
[61 FR 11476,Mar.20, 1996]
Subpart B [Reserved]
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Subpart C—Eligible Activities
Source: 53 FR 34439, Sept. 6, 1988, unless otherwise noted.
§570.200 General policies.
(a)Determination of eligibility.An activity may be assisted in whole or in part with CDBG funds only if all of the
following requirements are met:
(1)Compliance with section 105 of the Act. Each activity must meet the eligibility requirements of section 105 of the
Act as further defined in this subpart.
(2)Compliance with national objectives. Grant recipients under the Entitlement and HUD-administered Small Cities
programs and recipients of insular area funds under section 106 of the Act must certify that their projected use of
funds has been developed so as to give maximum feasible priority to activities which will carry out one of the national
objectives of benefit to low-and moderate-income families or aid in the prevention or elimination of slums or blight.
The projected use of funds may also include activities that the recipient certifies are designed to meet other
community development needs having a particular urgency because existing conditions pose a serious and
immediate threat to the health or welfare of the community where other financial resources are not available to meet
such needs.Consistent with the foregoing,each recipient under the Entitlement or HUD-administered Small Cities
programs,and each recipient of insular area funds under section 106 of the Act must ensure and maintain evidence
that each of its activities assisted with CDBG funds meets one of the three national objectives as contained in its
certification.Criteria for determining whether an activity addresses one or more of these objectives are found in
§570208.
(3)Compliance with the primary objective.The primary objective of the Act is described in section 101(c)of the Act.
Consistent with this objective,entitlement recipients,non-entitlement CDBG grantees in Hawaii,and recipients of
insular area funds under section 106 of the Act must ensure that,over a period of time specified in their certification
not to exceed three years,not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities
meeting the criteria under§570.208(a)or under§570.208(dX5)or(6)for benefiting low-and moderate-income
persons.For grants under section 107 of the Act,insular area recipients must meet this requirement for each
separate grant.See§570.420(dX3)for additional discussion of the primary objective requirement for insular areas
funded under section 106 of the Act.The requirements for the HUD-administered Small Cities program in New York
are at§570.420(d)(2).In determining the percentage of funds expended for such activities:
(i)Cost of administration and planning eligible under§570.205 and§570.206 will be assumed to benefit low and
moderate income persons in the same proportion as the remainder of the CDBG funds and,accordingly shall be
excluded from the calculation;
(ii)Funds deducted by HUD for repayment of urban renewal temporary loans pursuant to§570.802(b)shall be
excluded;
(iii)Funds expended for the repayment of loans guaranteed under the provisions of subpart M shall also be excluded;
(iv)Funds expended for the acquisition,new construction or rehabilitation of property for housing that qualifies under
§570.208(aX3)shall be counted for this purpose but shall be limited to an amount determined by multiplying the total
cost(including CDBG and non-CDBG costs)of the acquisition,construction or rehabilitation by the percent of units in
such housing to be occupied by low and moderate income persons.
(v)Funds expended for any other activities qualifying under§570.208(a)shall be counted for this purpose in their
entirety.
(4)Compliance with environmental review procedures.The environmental review procedures set forth at 24 CFR part
58 must be completed for each activity(or project as defined in 24 CFR part 58),as applicable.
(5)Cost principles. Costs incurred,whether charged on a direct or an indirect basis,must be in conformance with
OMB Circulars A-87,"Cost Principles for State,Local and Indian Tribal Governments";A-122,"Cost Principles for
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Non-profit Organizations";or A-21,"Cost Principles for Educational Institutions,"as applicable.i All items of cost
listed in Attachment B of these Circulars that require prior Federal agency approval are allowable without prior
approval of HUD to the extent they comply with the general policies and principles stated in Attachment A of such
circulars and are otherwise eligible under this subpart C,except for the following:
These circulars are available from the American Communities Center by calling the following toll-free
numbers: (800)998-9999 or(800)483-2209(TDD).
(i)Depreciation methods for fixed assets shall not be changed without HUD's specific approval or,if charged through
a cost allocation plan,the Federal cognizant agency.
(ii)Fines and penalties(including punitive damages)are unallowable costs to the CDBG program.
(iii)Pre-award costs are limited to those authorized under paragraph(h)of this section.
(b)Special policies governing facilities.The following special policies apply to:
(1)Facilities containing both eligible and ineligible uses.A public facility otherwise eligible for assistance under the
CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible
uses,if:
(i)The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area
within the larger facility;and
(ii)The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct
from the overall costs of the multiple-use building and/or facility.
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Allowable costs are limited to those attributable to the eligible portion of the building or facility.
(2)Fees for use of facilities. Reasonable fees may be charged for the use of the facilities assisted with CDBG funds,
but charges such as excessive membership fees,which will have the effect of precluding low and moderate income
persons from using the facilities,are not permitted.
(c)Special assessments under the CDBG program.The following policies relate to special assessments under the
CDBG program:
(1)Definition of special assessment.The term"special assessment"means the recovery of the capital costs of a
public improvement,such as streets,water or sewer lines,curbs,and gutters,through a fee or charge levied or filed
as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public
improvement,or a one-time charge made as a condition of access to a public improvement.This term does not relate
to taxes,or the establishment of the value of real estate for the purpose of levying real estate,property,or ad valorem
taxes,and does not include periodic charges based on the use of a public improvement,such as water or sewer user
charges,even if such charges include the recovery of all or some portion of the capital costs of the public
improvement.
(2)Special assessments to recover capital costs.Where CDBG funds are used to pay all or part of the cost of a
public improvement,special assessments may be imposed as follows:
(i)Special assessments to recover the CDBG funds may be made only against properties owned and occupied by
persons not of low and moderate income.Such assessments constitute program income.
(ii)Special assessments to recover the non-CDBG portion may be made provided that CDBG funds are used to pay
the special assessment in behalf of all properties owned and occupied by low and moderate income persons;except
that CDBG funds need not be used to pay the special assessments in behalf of properties owned and occupied by
moderate income persons if the grant recipient certifies that it does not have sufficient CDBG funds to pay the
assessments in behalf of all of the low and moderate income owner-occupant persons. Funds collected through such
special assessments are not program income.
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(3)Public improvements not initially assisted with CDBG funds.The payment of special assessments with CDBG
funds constitutes CDBG assistance to the public improvement.Therefore,CDBG funds may be used to pay special
assessments provided:
(i)The installation of the public improvements was carried out in compliance with requirements applicable to activities
assisted under this part including environmental,citizen participation and Davis-Bacon requirements;
(ii)The installation of the public improvement meets a criterion for national objectives in§570.208(aX 1),(b),or(c);
and
(iii)The requirements of§570.200(c)(2)(ii)are met.
(d)Consultant activities. Consulting services are eligible for assistance under this part for professional assistance in
program planning,development of community development objectives,and other general professional guidance
relating to program execution.The use of consultants is govemed by the following:
(1)Employer-employee type of relationship. No person providing consultant services in an employer-employee type
of relationship shall receive more than a reasonable rate of compensation for personal services paid with CDBG
funds. In no event,however,shall such compensation exceed the equivalent of the daily rate paid for Level IV of the
Executive Schedule.Such services shall be evidenced by written agreements between the parties which detail the
responsibilities,standards,and compensation.
(2)Independent contractor relationship. Consultant services provided under an independent contractor relationship
are governed by the procurement requirements in 24 CFR 85.36,and are not subject to the compensation limitation
of Level IV of the Executive Schedule.
(e)Recipient determinations required as a condition of eligibility. In several instances under this subpart,the eligibility
of an activity depends on a special local determination.Recipients shall maintain documentation of all such
determinations.A written determination is required for any activity carried out under the authority of§§570.201(f),
570.201(iX2),570.201(p),570.201(q),570.202(bX3),570.206(f),570.209,570.210,and 570.309.
(f)Means of carrying out eligible activities.(1)Activities eligible under this subpart,other than those authorized under
§570.204(a),may be undertaken,subject to local law:
(i)By the recipient through:
(A)Its employees,or
(B)Procurement contracts governed by the requirements of 24 CFR 85.36;or
(ii)Through loans or grants under agreements with subrecipients,as defined at§570.500(c);or
(iii)By one or more public agencies,including existing local public agencies,that are designated by the chief
executive officer of the recipient.
(2)Activities made eligible under§570.204(a)may only be undertaken by entities specified in that section.
(g)Limitation on planning and administrative costs. No more than 20 percent of the sum of any grant,plus program
income,shall be expended for planning and program administrative costs,as defined in§§570.205 and 507.206,
respectively. Recipients of entitlement grants under subpart D of this part shall conform with this requirement by
limiting the amount of CDBG funds obligated for planning plus administration during each program year to an amount
no greater than 20 percent of the sum of its entitlement grant made for that program year(if any)plus the program
income received by the recipient and its subrecipients(if any)during that program year.
(h)Reimbursement for pre-award costs.The effective date of the grant agreement is the program year start date or
the date that the consolidated plan is received by HUD,whichever is later.For a Section 108 loan guarantee,the
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effective date of the grant agreement is the date of HUD execution of the grant agreement amendment for the
particular loan guarantee commitment.
(1)Prior to the effective date of the grant agreement,a recipient may incur costs or may authorize a subrecipient to
incur costs,and then after the effective date of the grant agreement pay for those costs using its CDBG funds,
provided that:
(i)The activity for which the costs are being incurred is included,prior to the costs being incurred,in a consolidated
plan action plan,an amended consolidated plan action plan,or an application under subpart M of this part,except
that a new entitlement grantee preparing to receive its first allocation of CDBG funds may incur costs necessary to
develop its consolidated plan and undertake other administrative actions necessary to receive its first grant,prior to
the costs being included in its consolidated plan;
(ii)Citizens are advised of the extent to which these pre-award costs will affect future grants;
(iii)The costs and activities funded are in compliance with the requirements of this part and with the Environmental
Review Procedures stated in 24 CFR part 58;
(iv)The activity for which payment is being made complies with the statutory and regulatory provisions in effect at the
time the costs are paid for with CDBG funds;
(v)CDBG payment will be made during a time no longer than the next two program years following the effective date
of the grant agreement or amendment in which the activity is first included;and
(vi)The total amount of pre-award costs to be paid during any program year pursuant to this provision is no more
than the greater of 25 percent of the amount of the grant made for that year or$300,000.
(2)Upon the written request of the recipient, HUD may authorize payment of pre-award costs for activities that do not
meet the criteria at paragraph(hx1)(v)or(h)(1 Xvi)of this section,if HUD determines,in writing,that there is good
cause for granting an exception upon consideration of the following factors,as applicable:
(i)Whether granting the authority would result in a significant contribution to the goals and purposes of the CDBG
program;
(ii)Whether failure to grant the authority would result in undue hardship to the recipient or beneficiaries of the activity;
(iii)Whether granting the authority would not result in a violation of a statutory provision or any other regulatory
provision;
(iv)Whether circumstances are clearly beyond the recipient's control;or
(v)Any other relevant considerations.
(i)Urban Development Action Grant. Grant assistance may be provided with Urban Development Action Grant funds,
subject to the provisions of subpart G,for:
(1)Activities eligible for assistance under this subpart;and
(2)Notwithstanding the provisions of§570.207,such other activities as the Secretary may determine to be consistent
with the purposes of the Urban Development Action Grant program.
(j)Faith-based activities. (1)Organizations that are religious or faith-based are eligible,on the same basis as any
other organization,to participate in the CDBG program.Neither the Federal government nor a State or local
government receiving funds under CDBG programs shall discriminate against an organization on the basis of the
organization's religious character or affiliation.
2)Organizations that are directly funded under the CDBG program may not engage in inherently religious activities,
such as worship,religious instruction,or proselytization,as part of the programs or services funded under this part. If
an organization conducts such activities,the activities must be offered separately,in time or location,from the
programs or services funded under this part,and participation must be voluntary for the beneficiaries of the
HUDfunded
programs or services.
(3)A religious organization that participates in the CDBG program will retain its independence from Federal,State,
and local governments,and may continue to carry out its mission,including the definition,practice,and expression of
its religious beliefs,provided that it does not use direct CDBG funds to support any inherently religious activities,such
as worship,religious instruction,or proselytization.Among other things,faith-based organizations may use space in
their facilities to provide CDBG-funded services,without removing religious art,icons,scriptures,or other religious
symbols. In addition,a CDBG-funded religious organization retains its authority over its internal governance,and it
may retain religious terms in its organization's name,select its board members on a religious basis,and include
religious references in its organization's mission statements and other governing documents.
(4)An organization that participates in the CDBG program shall not,in providing program assistance,discriminate
against a program beneficiary or prospective program beneficiary on the basis of religion or religious belief.
(5)CDBG funds may not be used for the acquisition,construction,or rehabilitation of structures to the extent that
those structures are used for inherently religious activities.CDBG funds may be used for the acquisition,construction,
or rehabilitation of structures only to the extent that those structures are used for conducting eligible activities under
this part.Where a structure is used for both eligible and inherently religious activities,CDBG funds may not exceed
the cost of those portions of the acquisition,construction,or rehabilitation that are attributable to eligible activities in
accordance with the cost accounting requirements applicable to CDBG funds in this part.Sanctuaries,chapels,or
other rooms that a CDBG-funded religious congregation uses as its principal place of worship,however,are ineligible
for CDBG-funded improvements. Disposition of real property after the term of the grant,or any change in use of the
property during the term of the grant,is subject to government-wide regulations governing real property disposition
6
see 24 CFR parts 84 and 85).
(6)If a State or local government voluntarily contributes its own funds to supplement federally funded activities,the
State or local government has the option to segregate the Federal funds or commingle them.However,if the funds
are commingled,this section applies to all of the commingled funds.
[53 FR 34439,Sept. 6, 1988,as amended at 54 FR 47031,Nov.8, 1989;57 FR 27119,June 17, 1992;60 FR 1943,
Jan.5, 1995;60 FR 17445,Apr.6, 1995;60 FR 56910, Nov.9, 1995;61 FR 11476, Mar.20, 1996;61 FR 18674,
Apr.29, 1996;65 FR 70215,Nov.21,2000;68 FR 56404,Sept.30,2003;69 FR 32778,June 10,2004;70 FR
76369,Dec.23,2005;72 FR 46370,Aug. 17,2007]
§570.201 Basic eligible activities.
CDBG funds may be used for the following activities:
(a)Acquisition.Acquisition in whole or in part by the recipient,or other public or private nonprofit entity,by purchase,
long-term lease,donation,or otherwise,of real property(including air rights,water rights, rights-of-way,easements,
and other interests therein)for any public purpose,subject to the limitations of§570.207.
(b)Disposition. Disposition,through sale, lease,donation,or otherwise,of any real property acquired with CDBG
funds or its retention for public purposes,including reasonable costs of temporarily managing such property or
property acquired under urban renewal,provided that the proceeds from any such disposition shall be program
income subject to the requirements set forth in§570.504.
(c)Public facilities and improvements.Acquisition,construction, reconstruction,rehabilitation or installation of public
facilities and improvements,except as provided in§570.207(a),carried out by the recipient or other public or private
nonprofit entities.(However,activities under this paragraph may be directed to the removal of material and
architectural bafflers that restrict the mobility and accessibility of elderly or severely disabled persons to public
facilities and improvements,including those provided for in§570.207(ax1).)In undertaking such activities,design
features and improvements which promote energy efficiency may be included.Such activities may also include the
execution of architectural design features,and similar treatments intended to enhance the aesthetic quality of
15
facilities and improvements receiving CDBG assistance,such as decorative pavements,railings,sculptures,pools of
water and fountains,and other works of art. Facilities designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the prohibition of new housing construction described in
§570.207(bx3).Such facilities include shelters for the homeless;convalescent homes; hospitals,nursing homes;
battered spouse shelters;halfway houses for run-away children,drug offenders or parolees;group homes for
mentally retarded persons and temporary housing for disaster victims.In certain cases,nonprofit entities and
subrecipients including those specified in§570.204 may acquire title to public facilities.When such facilities are
owned by nonprofit entities or subrecipients,they shall be operated so as to be open for use by the general public
during all normal hours of operation. Public facilities and improvements eligible for assistance under this paragraph
are subject to the policies in§570.200(b).
(d)Clearance and remediation activities. Clearance,demolition,and removal of buildings and improvements,
including movement of structures to other sites and remediation of known or suspected environmental contamination.
Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.
Remediation may include project-specific environmental assessment costs not otherwise eligible under§570.205.
(e)Public services. Provision of public services(including labor, supplies,and materials)including but not limited to
those concerned with employment,crime prevention,child care, health,drug abuse,education,fair housing
counseling,energy conservation,welfare(but excluding the provision of income payments identified under
§570.207(b)(4)),homebuyer downpayment assistance,or recreational needs.To be eligible for CDBG assistance,a
public service must be either a new service or a quantifiable increase in the level of an existing service above that
which has been provided by or on behalf of the unit of general local government(through funds raised by the unit or
received by the unit from the State in which it is located)in the 12 calendar months before the submission of the
action plan.(An exception to this requirement may be made if HUD determines that any decrease in the level of a
service was the result of events not within the control of the unit of general local government.)The amount of CDBG
funds used for public services shall not exceed paragraphs(e)(1)or(2)of this section,as applicable:
(1)The amount of CDBG funds used for public services shall not exceed 15 percent of each grant,except that for
entitlement grants made under subpart D of this part,the amount shall not exceed 15 percent of the grant plus 15
percent of program income,as defined in§570.50O(a).For entitlement grants under subpart D of this part,
compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program
year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of
the program income received during the grantee's immediately preceding program year.
(2)A recipient which obligated more CDBG funds for public services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law
98-8), may obligate more CDBG funds than allowable under paragraph(e)(1)of this section,so long as the total
amount obligated in any program year does not exceed:
(i)For an entitlement grantee, 15%of the program income it received during the preceding program year;plus
(ii)A portion of the grant received for the program year which is the highest of the following amounts:
(A)The amount determined by applying the percentage of the grant it obligated for public services in the 1982
program year against the grant for its current program year;
(B)The amount determined by applying the percentage of the grant it obligated for public services in the 1983
program year against the grant for its current program year;
7
(C)The amount of funds it obligated for public services in the 1982 program year;or,
(D)The amount of funds it obligated for public services in the 1983 program year.
(f)Interim assistance. (1)The following activities may be undertaken on an interim basis in areas exhibiting
objectively determinable signs of physical deterioration where the recipient has determined that immediate action is
necessary to arrest the deterioration and that permanent improvements will be carried out as soon as practicable:
(i)The repairing of streets,sidewalks,parks,playgrounds,publicly owned utilities,and public buildings;and
16
(ii)The execution of special garbage,trash,and debris removal,including neighborhood cleanup campaigns,but not
the regular curbside collection of garbage or trash in an area.
(2)In order to alleviate emergency conditions threatening the public health and safety in areas where the chief
executive officer of the recipient determines that such an emergency condition exists and requires immediate
resolution,CDBG funds may be used for:
(i)The activities specified in paragraph(f)(1)of this section,except for the repair of parks and playgrounds;
(ii)The clearance of streets,including snow removal and similar activities,and
(iii)The improvement of private properties.
(3)All activities authorized under paragraph(0(2)of this section are limited to the extent necessary to alleviate
emergency conditions.
(g)Payment of non-Federal share. Payment of the non-Federal share required in connection with a Federal grant-
inaid
program undertaken as part of CDBG activities,provided,that such payment shall be limited to activities
otherwise eligible and in compliance with applicable requirements under this subpart.
(h)Urban renewal completion. Payment of the cost of completing an urban renewal project funded under title I of the
Housing Act of 1949 as amended.Further information regarding the eligibility of such costs is set forth in§570.801.
(i)Relocation. Relocation payments and other assistance for permanently and temporarily relocated individuals
families,businesses,nonprofit organizations,and farm operations where the assistance is(1)required under the
provisions of§570.606(b)or(c);or(2)determined by the grantee to be appropriate under the provisions of
§570.606(d).
(j)Loss of rental income. Payments to housing owners for losses of rental income incurred in holding,for temporary
periods,housing units to be used for the relocation of individuals and families displaced by program activities assisted
under this part.
(k)Housing services. Housing services,as provided in section 105(a)(21)of the Act(42 U.S.C.5305(a)(21)).
(I)Privately owned utilities. CDBG funds may be used to acquire,construct,reconstruct,rehabilitate,or install the
distribution lines and facilities of privately owned utilities,including the placing underground of new or existing
distribution facilities and lines.
(m)Construction of housing. CDBG funds may be used for the construction of housing assisted under section 17 of
the United States Housing Act of 1937.
(n)Homeownership assistance. CDBG funds may be used to provide direct homeownership assistance to low-or
moderate-income households in accordance with section 105(a)of the Act.
(o)(1)The provision of assistance either through the recipient directly or through public and private organizations,
agencies,and other subrecipients(including nonprofit and for-profit subrecipients)to facilitate economic development
by:
(i)Providing credit,including,but not limited to,grants,loans,loan guarantees,and other forms of financial support,
for the establishment,stabilization,and expansion of microenterprises;
(ii)Providing technical assistance,advice,and business support services to owners of microenterprises and persons
developing microenterprises;and
(iii)Providing general support,including,but not limited to,peer support programs,counseling,child care,
transportation,and other similar services,to owners of microenterprises and persons developing microenterprises.
17
(2)Services provided this paragraph(o)shall not be subject to the restrictions on public services contained in
paragraph(e)of this section.
(3)For purposes of this paragraph(o),"persons developing microenterprises"means such persons who have
expressed interest and who are,or after an initial screening process are expected to be,actively working toward
developing businesses,each of which is expected to be a microenterprise at the time it is formed.
(4)Assistance under this paragraph(o)may also include training,technical assistance,or other support services to
increase the capacity of the recipient or subrecipient to carry out the activities under this paragraph(o).
(p) Technical assistance. Provision of technical assistance to public or nonprofit entities to increase the capacity of
such entities to carry out eligible neighborhood revitalization or economic development activities.(The recipient must
determine,prior to the provision of the assistance,that the activity for which it is attempting to build capacity would be
eligible for assistance under this subpart C,and that the national objective claimed by the grantee for this assistance
can reasonably be expected to be met once the entity has received the technical assistance and undertakes the
activity.)Capacity building for private or public entities(including grantees)for other purposes may be eligible under
§570.205.
(q)Assistance to institutions of higher education. Provision of assistance by the recipient to institutions of higher
education when the grantee determines that such an institution has demonstrated a capacity to carry out eligible
8
activities under this subpart C.
[53 FR 34439,Sept.6, 1988,as amended at 53 FR 31239,Aug. 17, 1988;55 FR 29308,July 18, 1990;57 FR
27119,June 17, 1992;60 FR 1943,Jan.5, 1995;60 FR 56911, Nov.9, 1995;61 FR 18674,Apr.29, 1996;65 FR
70215, Nov.21,2000;67 FR 47213,July 17,2002; 71 FR 30034, May 24,2006]
§570.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation assistance. CDBG funds may be used to finance
the rehabilitation of:
(1)Privately owned buildings and improvements for residential purposes;improvements to a single-family residential
property which is also used as a place of business,which are required in order to operate the business,need not be
considered to be rehabilitation of a commercial or industrial building,if the improvements also provide general benefit
to the residential occupants of the building;
(2)Low-income public housing and other publicly owned residential buildings and improvements;
(3)Publicly or privately owned commercial or industrial buildings,except that the rehabilitation of such buildings
owned by a private for-profit business is limited to improvement to the exterior of the building,abatement of asbestos
hazards,lead-based paint hazard evaluation and reduction,and the correction of code violations;
(4)Nonprofit-owned nonresidential buildings and improvements not eligible under§570.201(c);and
(5)Manufactured housing when such housing constitutes part of the community's permanent housing stock.
(b) Types of assistance. CDBG funds may be used to finance the following types of rehabilitation activities,and
related costs,either singly,or in combination,through the use of grants,loans,loan guarantees,interest
supplements,or other means for buildings and improvements described in paragraph(a)of this section,except that
rehabilitation of commercial or industrial buildings is limited as described in paragraph(a)(3)of this section.
(1)Assistance to private individuals and entities,including profit making and nonprofit organizations,to acquire for the
purpose of rehabilitation,and to rehabilitate properties,for use or resale for residential purposes;
(2)Labor,materials,and other costs of rehabilitation of properties,including repair directed toward an accumulation
of deferred maintenance,replacement of principal fixtures and components of existing structures,installation of
security devices,including smoke detectors and dead bolt locks,and renovation through alterations,additions to,or
18
enhancement of existing structures and improvements,abatement of asbestos hazards(and other contaminants)in
buildings and improvements that may be undertaken singly,or in combination;
(3)Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such
financing is determined by the recipient to be necessary or appropriate to achieve the locality's community
development objectives;
(4)Improvements to increase the efficient use of energy in structures through such means as installation of storm
windows and doors,siding,wall and attic insulation,and conversion,modification,or replacement of heating and
cooling equipment,including the use of solar energy equipment;
(5)Improvements to increase the efficient use of water through such means as water savings faucets and shower
heads and repair of water leaks;
(6)Connection of residential structures to water distribution lines or local sewer collection lines;
(7)For rehabilitation carried out with CDBG funds,costs of:
(i)Initial homeowner warranty premiums;
(ii)Hazard insurance premiums,except where assistance is provided in the form of a grant;and
(iii)Flood insurance premiums for properties covered by the Flood Disaster Protection Act of 1973,pursuant to
§570.605.
(8)Costs of acquiring tools to be lent to owners,tenants,and others who will use such tools to carry out rehabilitation;
(9)Rehabilitation services,such as rehabilitation counseling,energy auditing,preparation of work specifications,loan
processing,inspections,and other services related to assisting owners,tenants,contractors,and other entities,
participating or seeking to participate in rehabilitation activities authorized under this section, under section 312 of the
Housing Act of 1964,as amended, under section 810 of the Act,or under section 17 of the United States Housing Act
of 1937;
(10)Assistance for the rehabilitation of housing under section 17 of the United States Housing Act of 1937;and
(11)Improvements designed to remove material and architectural barriers that restrict the mobility and accessibility of
elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph(a)of this
section.
(c)Code enforcement. Costs incurred for inspection for code violations and enforcement of codes(e.g.,salaries and
related expenses of code enforcement inspectors and legal proceedings,but not including the cost of correcting the
violations)in deteriorating or deteriorated areas when such enforcement together with public or private
improvements,rehabilitation,or services to be provided may be expected to arrest the decline of the area.
(d)Historic preservation. CDBG funds may be used for the rehabilitation,preservation or restoration of historic
properties,whether publicly or privately owned.Historic properties are those sites or structures that are either listed in
or eligible to be listed in the National Register of Historic Places,listed in a State or local inventory of historic places,
or designated as a State or local landmark or historic district by appropriate law or ordinance. Historic preservation,
however,is not authorized for buildings for the general conduct of government.
(e)Renovation of closed buildings. CDBG funds may be used to renovate closed buildings,such as closed school
buildings,for use as an eligible public facility or to rehabilitate such buildings for housing.
(f)Lead-based paint activities.Lead-based paint activities pursuant to§570.608.
9
[53 FR 34439,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 60 FR 1944,Jan.5, 1995;60 FR 56911,
Nov.9, 1995;64 FR 50225,Sept. 15, 1999;71 FR 30035,May 24,2006]
§570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development activities in addition to other activities authorized
in this subpart that may be carried out as part of an economic development project.Guidelines for selecting activities
to assist under this paragraph are provided at§570.209.The recipient must ensure that the appropriate level of public
benefit will be derived pursuant to those guidelines before obligating funds under this authority.Special activities
authorized under this section do not include assistance for the construction of new housing.Activities eligible under
this section may include costs associated with project-specific assessment or remediation of known or suspected
environmental contamination.Special economic development activities include:
(a)The acquisition,construction,reconstruction,rehabilitation or installation of commercial or industrial buildings,
structures,and other real property equipment and improvements,including railroad spurs or similar extensions.Such
activities may be carried out by the recipient or public or private nonprofit subrecipients.
(b)The provision of assistance to a private for-profit business,including,but not limited to,grants,loans,loan
guarantees,interest supplements,technical assistance,and other forms of support,for any activity where the
assistance is appropriate to carry out an economic development project,excluding those described as ineligible in
§570.207(a). In selecting businesses to assist under this authority,the recipient shall minimize,to the extent
practicable,displacement of existing businesses and jobs in neighborhoods.
(c)Economic development services in connection with activities eligible under this section,including,but not limited
to,outreach efforts to market available forms of assistance;screening of applicants;reviewing and underwriting
applications for assistance;preparation of all necessary agreements;management of assisted activities;and the
screening,referral,and placement of applicants for employment opportunities generated by CDBG-eligible economic
development activities,including the costs of providing necessary training for persons filling those positions.
[53 FR 34439,Sept.6, 1988,as amended at 60 FR 1944,Jan.5,1995;71 FR 30035,May 24,2006]
§570.204 Special activities by Community-Based Development Organizations (CBDOs).
(a)Eligible activities.The recipient may provide CDBG funds as grants or loans to any CBDO qualified under this
section to carry out a neighborhood revitalization,community economic development,or energy conservation project.
The funded project activities may include those listed as eligible under this subpart,and,except as described in
paragraph(b)of this section,activities not otherwise listed as eligible under this subpart.For purposes of qualifying
as a project under paragraphs(ax1),(aX2),and(aX3)of this section,the funded activity or activities may be
considered either alone or in concert with other project activities either being carried out or for which funding has
been committed.For purposes of this section:
(1)Neighborhood revitalization project includes activities of sufficient size and scope to have an impact on the decline
of a geographic location within the jurisdiction of a unit of general local government(but not the entire jurisdiction)
designated in comprehensive plans,ordinances,or other local documents as a neighborhood,village,or similar
geographical designation;or the entire jurisdiction of a unit of general local government which is under 25,000
population;
(2)Community economic development project includes activities that increase economic opportunity,principally for
persons of low-and moderate-income,or that stimulate or retain businesses or permanent jobs,including projects
that include one or more such activities that are clearly needed to address a lack of affordable housing accessible to
existing or planned jobs and those activities specified at 24 CFR 91.1(a)(1)(iii);activities under this paragraph may
include costs associated with project-specific assessment or remediation of known or suspected environmental
contamination;
(3)Energy conservation project includes activities that address energy conservation,principally for the benefit of the
residents of the recipient's jurisdiction;and
(4)To carry out a project means that the CBDO undertakes the funded activities directly or through contract with an
entity other than the grantee,or through the provision of financial assistance for activities in which it retains a direct
and controlling involvement and responsibilities.
(b)Ineligible activities. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this
subpart,this section does not authorize:
(1)Carrying out an activity described as ineligible in§570.207(a);
(2)Carrying out public services that do not meet the requirements of§570.201(e),except that:
(i)Services carried out under this section that are specifically designed to increase economic opportunities through
job training and placement and other employment support services,including,but not limited to,peer support
programs,counseling,child care,transportation,and other similar services;and
(ii)Services of any type carried out under this section pursuant to a strategy approved by HUD under the provisions
of 24 CFR 91.215(e)shall not be subject to the limitations in§570.201(eX1)or(2),as applicable;
(3)Providing assistance to activities that would otherwise be eligible under§570.203 that do not meet the
requirements of§570.209;or
(4)Carrying out an activity that would otherwise be eligible under§570.205 or§570.206,but that would result in the
recipient's exceeding the spending limitation in§570.200(g).
(c)Eligible CBDOs.(1)A CBDO qualifying under this section is an organization which has the following
characteristics:
10
CDBG Regulations 24 CFR Part 570
Pages 11-156 will be furnished upon request
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
n 1r
_, .. „
Tab 2
"Exhibit D"
Participant Income
Eli 'bili Form
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'd Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783lin
www.augustaga.gov
EXHIBIT "D"
PARTICIPANT INCOME ELIGIBILITY FORM
(Documentation of Income Must be Attached to this Form-See#8)
The information requested below is confidential. This information is used only to track financial
and social status under federal regulations as required for the funding of programs by the U.S.
Department of Housing and Urban Development (HUD) and administered by the Housing and
Community Development Department on behalf of the City of Augusta. Programs requiring this
information include the Community Development Block Grant Program, Emergency Shelter Grant
Program, HOME and Housing Opportunities for Persons With AIDS.
Client Name:
(If services are provided to the child,please put child's name above.)
Client Address:
Parent Name(If applicable):
Neighborhood: Phone#: (Work) Home
1. Number of persons in household:
2. Total annual income of ALL persons residing in household: $
(Show calculation: Monthly income$ x(12 or 26)=$ )
3. Race:
[ ] White [ ] Black/African American [ ] Black/African American&White
[ ] Asian [ ] Asian&White [ ] Am.Indian/Alaskan Native&Black/African Am.
[ ] Am.Indian/Alaskan Native [ ] Native Hawaiian/Other Pacific Islander
[ ] Am.Indian/Alaskan Native&White [ ] Other Multi-Racial
[ ] Hispanic(of the race identified,check this block if the person is of Hispanic origin
4. Sex: [ ] Male [ ] Female
5. Female Head of Household? [ ] Yes [ ] No
6. Client 62 or older? [ ] Yes [ ] No
7. Disabled? [ ] Yes [ ] No
8. Attach Income verification(s) [ ] Yes [ ] No
(Verification of Income MUST BE ATTACHED. Examples of income verifications include check stubs,W-2 form,SSI,TANF,
Social Security,etc.)
Client Signature Witness Date
FOR OFFICE USE ONLY:
(Circle number of persons in household and indicate income by circling column a, b,c or d horizontally.)
Year 2018 Income Limits
Family Size a. Extremely Low Income b. Low Income c. Low/Moderate Income d. Not LM
(persons) (0%-30%of Median) (31%-50%of Median) (51%-80%-
80%of Median)
1 $0- 13,100 $13,101 -21,850 $21,851 -34,900 $34,901+
2 $0- 16,460 $16,461 -24,950 $24,951 -39,900 $39,901+
3 $0-20,780 $20,781 -28,050 $28,051 -44,900 $44,901+
4 $0-25,100 $25,101 -31,150 $31,151 -49,850 $49,851+
5 $0-29,420 $29,421 -33,650 $33,651 -53,850 $53,851+
6 $0-33,740 $33,741 -36,150 $36,151 -57,850 $57,851+
7 $0-38,060 $38,061 -38,650 $38,651 -61,850 $61,851+
8 $0-41,150 $0-$41,150 $41,151 -65,850 $65,851+
CDBG 2018
MEMORANDUM OF AGREEMENT
November 27, 2018
Seeds For Life Community Development Block Grant (CDBG) Program
This Memorandum of Understanding is for the purpose of establishing the
responsibilities and requirements to be assumed by(name of grant recipient)and the City
of Augusta' Housing and Community Development (HCD) Department in providing a
Business Development grant of$10,000 (ten thousand) dollars to awarded recipients of
the Seeds For Life Grant program.
PROJECT DESCRIPTION
The Seeds For Life Business Development Grant is intended to provide an established
business of twelve months or of more working capital in the amount of$10,000 to foster
both business growth and additional employee retainage or hiring of low-mod eligible
employees. There will be 1o(ten) $10,000 dollar grants awarded: four to "pilot program"
recipients, with the remaining chosen through a competitive panel and a voter selection
process. This grant is intended to give established businesses a monetary infusion to help
them grow and expand their workforce while using the funds for but not limited to: new
or upgraded equipment, increased inventory, employee training, marketing and
advertising activities, new or upgraded signage, working or operating capital to include
salaries of newly hired employees.
GRANT FUNDS
Funding for this Project has been approved by the Augusta-Richmond County
Commission and the U.S. Department of Housing and Urban Development (U.S. HUD)
in the amount of $100,000 as part of the funding established for the Small Business
Development Loan fund. Overall there will be ten grants of $10,000 made to ten
businesses that all must be located in Augusta-Richmond County.
PROJECT ACTIVITIES
Ms. Consuella Carter for CC Educational Training, LLC and HCD agree to jointly
administer the "Project" as follows:
Ms. Carter shall:
1. Comply with the Community Development Block Grant regulations as set forth at
24 CFR Part 570. (attached)
2. Must retain or hire a minimum of one HUD eligible low-moderate employee full
or part-time (see Exhibit D for eligibility requirements attached) with continuing
service for a minimum of twelve months of employment upon receipt of the grant.
(Exhibit D attached)
3. CC Educational Training, LLC shall, within six months of receiving funds
from AHCD, provide any and all requested documentation to substantiate the
retaining or hiring of a new full or part-time employee providing background
information of that eligible employee with their hours and responsibilities required
for the business.
4. At the end of the one-year award term, recipient will provide AHCD any and all
information requested related to the use of the CDBG funds for the improvement
of the business and the status of all full and part-time employees involved in this
grant MOA.
5. In the event that CC Educational Training, LLC is not able to retain or
hire a part or full-time employee(s) or if for any reason, AHCD finds
reason that the recipient business misrepresented its intentions or the
use of the funds, HCD retains the right to rescind the grant and recall
the money to be repaid back to the City of Augusta.
6. CC Educational Training, LLC is aware that they can receive only one awarded
grant over the entire course of the grant program and once they are awarded can
no longer apply in the future.
The City of Augusta's Housing and Community Development Department shall report to
the U.S. Department of Housing and Urban Development statistics on the number of
persons employed by CC Educational Training, LLC.
In Witness Whereof, the parties have set their hands and seals as of the date first written
above.
Attest: Augusta, Georgia
By: Hardie Davis Date:
As Its Map• n,�,r� '0:5)
By: Janice Allen Jackson Date: b \ 11(
As Its Adm.,'s r,Ltk.r
B, 'a home Wel(41e , Jr., Director Date: I ZI 3 I '
.._ ...11. 4
Approv-`:1.s to Form • _ 1 ii /: k! ,/ Date: 2 /(//d9'drew G. M„� =enzie 1 /
General Counsel
By: Consuella Carter, CC Education,1 Training, LLC Date: ti • 2-1 ' 1%
J
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
1011ii 1 �f 11
to r r< A
Tab
CDBG Regulations
24 CFR Part 570
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'd Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov .
•
1
§570.1 Purpose and primary objective.
(a)This part describes policies and procedures applicable to the following programs authorized under title I of the
Housing and Community Development Act of 1974,as amended:
(1)Entitlement grants program(subpart D);
(2)Nonentitlement Funds: HUD-administered Small Cities and Insular Area programs(subpart F);
(3)State program:State-administered CDBG nonentitlement funds(subpart I);
(4)Special Purpose Grants(subpart E);
(5)Urban Development Action Grant program(subpart G);and
(6)Loan Guarantees(subpart M).
(b)Subparts A,C,J, K,and 0 apply to all programs in paragraph(a)except as modified or limited under the
provisions of these subparts or the applicable program regulations. In the application of the subparts to Special
Purpose Grants or the Urban Development Action Grant program,the reference to funds in the form of grants in the
term "CDBG funds", as defined in§570.3,shall mean the grant funds under those programs.The subparts do not
apply to the State program(subpart I)except to the extent expressly referred to.
(c)The primary objective of the programs authorized under title I of the Housing and Community Development Act of
1974,as amended,is described in section 101(c)of the Act(42 U.S.C.5301(c)).
[53 FR 34437,Sept.6, 1988,as amended at 56 FR 56126,Oct.31, 1991;61 FR 11475,Mar.20, 1996;69 FR
32778,June 10,2004]
§570.3 Definitions.
The terms HUD and Secretary are defined in 24 CFR part 5.All of the following definitions in this section that rely on
data from the United States Bureau of the Census shall rely upon the data available from the latest decennial census.
Act means title I of the Housing and Community Development Act of 1974 as amended(42 U.S.C.5301 et seq. ).
Age of housing means the number of year-round housing units,as further defined in section 102(ax11)of the Act.
Applicant means a State or unit of general local government that makes application pursuant to the provisions of
subpart E, F,G or M.
Buildings for the general conduct of government shall have the meaning provided in section 102(ax21)of the Act.
CDBG funds means Community Development Block Grant funds,including funds received in the form of grants under
subpart D, F,or§570.405 of this part,funds awarded under section 108(q)of the Housing and Community
6
Development Act of 1974, loans guaranteed under subpart M of this part, urban renewal surplus grant funds,and
program income as defined in§570.500(a).
Chief executive officer of a State or unit of general local government means the elected official or the legally
designated official,who has the primary responsibility for the conduct of that entity's governmental affairs. Examples
of the"chief executive officer"of a unit of general local government are:the elected mayor of a municipality;the
elected county executive of a county;the chairperson of a county commission or board in a county that has no
elected county executive;and the official designated pursuant to law by the governing body of a unit of general local
government.
City means the following:
(1)For purposes of Entitlement Community Development Block Grant and Urban Development Action Grant
eligibility:
(i)Any unit of general local government that is classified as a municipality by the United States Bureau of the Census,
or
(ii)Any other unit of general local government that is a town or township and that,in the determination of the
Secretary:
(A)Possesses powers and performs functions comparable to those associated with municipalities;
(B)Is closely settled(except that the Secretary may reduce or waive this requirement on a case by case basis for the
purposes of the Action Grant program);and
(C)Contains within its boundaries no incorporated places as defined by the United States Bureau of the Census that
have not entered into cooperation agreements with the town or township for a period covering at least 3 years to
undertake or assist in the undertaking of essential community development and housing assistance activities.The
determination of eligibility of a town or township to qualify as a city will be based on information available from the
United States Bureau of the Census and information provided by the town or township and its included units of
general local government.
(2)For purposes of Urban Development Action Grant eligibility only,Guam,the Virgin Islands,American Samoa,the
Commonwealth of the Northern Mariana Islands,the counties of Kauai, Maui,and Hawaii in the State of Hawaii,and
Indian tribes that are eligible recipients under the State and Local Government Fiscal Assistance Act of 1972 and
located on reservations in Oklahoma as determined by the Secretary of the Interior or in Alaskan Native Villages.
Community Development Financial Institution has the same meaning as used in the Community Development
Banking and Financial Institutions Act of 1994(12 U.S.C.4701 note).
Consolidated plan.The plan prepared in accordance with 24 CFR part 91,which describes needs,resources,
priorities and proposed activities to be undertaken with respect to HUD programs,including the CDBG program.An
approved consolidated plan means a consolidated plan that has been approved by HUD in accordance with 24 CFR
part 91.
Discretionary grant means a grant made from the various Special Purpose Grants in accordance with subpart E of
this part.
1
Entitlement amount means the amount of funds which a metropolitan city is entitled to receive under the Entitlement
grant program,as determined by formula set forth in section 106 of the Act.
Extent of growth lag shall have the meaning provided in section 102(a)(12)of the Act.
Extent of housing overcrowding shall have the meaning provided in section 102(ax10)of the Act.
7
Extent of poverty means the number of persons whose incomes are below the poverty level based on data compiled
and published by the United States Bureau of the Census available from the latest census referable to the same point
or period in time and the latest reports from the Office of Management and Budget. For purposes of this part,the
Secretary has determined that it is neither feasible nor appropriate to make adjustments at this time in the
computations of"extent of poverty"for regional or area variations in income and cost of living.
Family means all persons living in the same household who are related by birth,marriage or adoption.
Household means all the persons who occupy a housing unit.The occupants may be a single family,one person
living alone,two or more families living together,or any other group of related or unrelated persons who share living
arrangements.
Income.For the purpose of determining whether a family or household is low-and moderate-income under subpart C
of this part,grantees may select any of the three definitions listed below for each activity,except that integrally related
activities of the same type and qualifying under the same paragraph of§570.208(a)shall use the same definition of
income.The option to choose a definition does not apply to activities that qualify under§570.208(ax1)(Area benefit
activities),except when the recipient carries out a survey under§570.208(a)(1)(vi).Activities qualifying under
§570.208(ax1)generally must use the area income data supplied to recipients by HUD.The three definitions are as
follows:
(1)(i)"Annual income"as defined under the Section 8 Housing Assistance Payments program at 24 CFR 813.106
(except that if the CDBG assistance being provided is homeowner rehabilitation under§570.202,the value of the
homeowner's primary residence may be excluded from any calculation of Net Family Assets);or
(ii)Annual income as reported under the Census long-form for the most recent available decennial Census.This
definition includes:
(A)Wages,salaries,tips,commissions,etc.;
(B)Self-employment income from own nonfarm business,including proprietorships and partnerships;
(C)Farm self-employment income;
(D)Interest,dividends,net rental income,or income from estates or trusts;
(E)Social Security or railroad retirement;
(F)Supplemental Security Income,Aid to Families with Dependent Children,or other public assistance or public
welfare programs;
(G)Retirement,survivor,or disability pensions;and
(H)Any other sources of income received regularly,including Veterans'(VA)payments,unemployment
compensation,and alimony;or
(iii)Adjusted gross income as defined for purposes of reporting under Internal Revenue Service(IRS)Form 1040 for
individual Federal annual income tax purposes.
(2)Estimate the annual income of a family or household by projecting the prevailing rate of income of each person at
the time assistance is provided for the individual,family,or household(as applicable).Estimated annual income shall
include income from all family or household members,as applicable.Income or asset enhancement derived from the
CDBG-assisted activity shall not be considered in calculating estimated annual income.
Insular area shall have the meaning provided in section 102(a)(24)of the Act.
8
Low-and moderate-income household means a household having an income equal to or less than the Section 8
lowincome
limit established by HUD.
Low-and moderate-income person means a member of a family having an income equal to or less than the Section 8
low-income limit established by HUD.Unrelated individuals will be considered as one-person families for this
purpose.
Low-income household means a household having an income equal to or less than the Section 8 very low-income
limit established by HUD.
Low-income person means a member of a family that has an income equal to or less than the Section 8 very
lowincome
limit established by HUD.Unrelated individuals shall be considered as one-person families for this purpose.
Metropolitan area shall have the meaning provided in section 102(a)(3)of the Act.
Metropolitan city shall have the meaning provided in section 102(a)(4)of the Act except that the term"central city"is
replaced by"principal city."
Microenterprise shall have the meaning provided in section 102(a)(22)of the Act.
Moderate-income household means a household having an income equal to or less than the Section 8 low-income
limit and greater than the Section 8 very low-income limit,established by HUD.
Moderate-income person means a member of a family that has an income equal to or less than the Section 8
lowincome
limit and greater than the Section 8 very low-income limit,established by HUD.Unrelated individuals shall be
2
considered as one-person families for this purpose.
Nonentitlement amount means the amount of funds which is allocated for use in a State's nonentitlement areas as
determined by formula set forth in section 106 of the Act.
Nonentitlement area shall have the meaning provided in section 102(a)(7)of the Act.
Population means the total resident population based on data compiled and published by the United States Bureau of
the Census available from the latest census or which has been upgraded by the Bureau to reflect the changes
resulting from the Boundary and Annexation Survey,new incorporations and consolidations of governments pursuant
to§570.4,and which reflects,where applicable,changes resulting from the Bureau's latest population determination
through its estimating technique using natural changes(birth and death)and net migration,and is referable to the
same point or period in time.
Small business means a business that meets the criteria set forth in section 3(a)of the Small Business Act(15 U.S.C.
631,636,637).
State shall have the meaning provided in section 102(a)(2)of the Act.
Unit of general local government shall have the meaning provided in section 102(a)(1)of the Act.
Urban county shall have the meaning provided in section 102(a)(6)of the Act. For the purposes of this definition,
HUD will determine whether the county's combined population contains the required percentage of low-and
moderate-income persons by identifying the number of persons that resided in applicable areas and units of general
local government based on data from the most recent decennial census,and using income limits that would have
applied for the year in which that census was taken.
Urban Development Action Grant(UDAG)means a grant made by the Secretary pursuant to section 119 of the Act
and subpart G of this part.
9
[53 FR 34437,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 56 FR 56126,Oct.31, 1991;60 FR 1915,
1943,Jan.5, 1995;60 FR 56909, Nov.9, 1995;61 FR 5209, Feb.9, 1996;61 FR 11475, Mar.20, 1996;61 FR
18674,Apr.29, 1996;68 FR 69582, Dec. 12,2003;69 FR 32778,June 10,2004]
§570.4 Allocation of funds.
(a)The determination of eligibility of units of general local government to receive entitlement grants,the entitlement
amounts,the allocation of appropriated funds to States for use in nonentitlement areas,the reallocation of funds,the
allocation of appropriated funds to insular areas,and the allocation of appropriated funds for discretionary grants
under the Secretary's Fund shall be governed by the policies and procedures described in sections 106 and 107 of
the Act,as appropriate.
(b)The definitions in§570.3 shall govern in applying the policies and procedures described in sections 106 and 107
of the Act.
(c)In determining eligibility for entitlement and in allocating funds under section 106 of the Act for any federal fiscal
year,HUD will recognize corporate status and geographical boundaries and the status of metropolitan areas and
principal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1)With respect to corporate status as certified by the applicable State and available for processing by the Census
Bureau as of such date;
(2)With respect to boundary changes or annexations,as are used by the Census Bureau in preparing population
estimates for all general purpose governmental units and are available for processing by the Census Bureau as of
such date,except that any such boundary changes or annexations which result in the population of a unit of general
local government reaching or exceeding 50,000 shall be recognized for this purpose whether or not such changes are
used by the Census Bureau in preparing such population estimates;and
(3)With respect to the status of Metropolitan Statistical Areas and principal cities,as officially designated by the
Office of Management and Budget as of such date.
(d)In determining whether a county qualifies as an urban county,and in computing entitlement amounts for urban
counties,the demographic values of population, poverty, housing overcrowding,and age of housing of any Indian
tribes located within the county shall be excluded. In allocating amounts to States for use in nonentitlement areas,the
demographic values of population,poverty,housing overcrowding and age of housing of all Indian tribes located in all
nonentitled areas shall be excluded. It is recognized that all such data on Indian tribes are not generally available
from the United States Bureau of the Census and that missing portions of data will have to be estimated. In
accomplishing any such estimates the Secretary may use such other related information available from reputable
sources as may seem appropriate,regardless of the data's point or period of time and shall use the best judgement
possible in adjusting such data to reflect the same point or period of time as the overall data from which the Indian
tribes are being deducted,so that such deduction shall not create an imbalance with those overall data.
(e)Amounts remaining after closeout of a grant which are required to be returned to HUD under the provisions of
§570.509,Grant closeout procedures,shall be considered as funds available for reallocation unless the appropriation
under which the funds were provided to the Department has lapsed.
[53 FR 34437,Sept.6, 1988,as amended at 68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.5 Waivers.
HUD's authority for the waiver of regulations and for the suspension of requirements to address damage in a
Presidentially declared disaster area is described in 24 CFR part 5 and in section 122 of the Act,respectively.
[61 FR 11476, Mar.20, 1996]
Subpart B [Reserved]
3
10
Subpart C—Eligible Activities
Source: 53 FR 34439, Sept.6, 1988, unless otherwise noted.
§570.200 General policies.
(a)Determination of eligibility.An activity may be assisted in whole or in part with CDBG funds only if all of the
following requirements are met:
(1)Compliance with section 105 of the Act. Each activity must meet the eligibility requirements of section 105 of the
Act as further defined in this subpart.
(2)Compliance with national objectives.Grant recipients under the Entitlement and HUD-administered Small Cities
programs and recipients of insular area funds under section 106 of the Act must certify that their projected use of
funds has been developed so as to give maximum feasible priority to activities which will carry out one of the national
objectives of benefit to low-and moderate-income families or aid in the prevention or elimination of slums or blight.
The projected use of funds may also include activities that the recipient certifies are designed to meet other
community development needs having a particular urgency because existing conditions pose a serious and
immediate threat to the health or welfare of the community where other financial resources are not available to meet
such needs.Consistent with the foregoing,each recipient under the Entitlement or HUD-administered Small Cities
programs,and each recipient of insular area funds under section 106 of the Act must ensure and maintain evidence
that each of its activities assisted with CDBG funds meets one of the three national objectives as contained in its
certification.Criteria for determining whether an activity addresses one or more of these objectives are found in
§570.208.
(3)Compliance with the primary objective.The primary objective of the Act is described in section 101(c)of the Act.
Consistent with this objective,entitlement recipients,non-entitlement CDBG grantees in Hawaii,and recipients of
insular area funds under section 106 of the Act must ensure that,over a period of time specified in their certification
not to exceed three years,not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities
meeting the criteria under§570.208(a)or under§570.208(dX5)or(6)for benefiting low-and moderate-income
persons.For grants under section 107 of the Act,insular area recipients must meet this requirement for each
separate grant.See§570.420(d)(3)for additional discussion of the primary objective requirement for insular areas
funded under section 106 of the Act.The requirements for the HUD-administered Small Cities program in New York
are at§570.420(dX2).In determining the percentage of funds expended for such activities:
(i)Cost of administration and planning eligible under§570.205 and§570.206 will be assumed to benefit low and
moderate income persons in the same proportion as the remainder of the CDBG funds and,accordingly shall be
excluded from the calculation;
(ii)Funds deducted by HUD for repayment of urban renewal temporary loans pursuant to§570.802(b)shall be
excluded;
(iii)Funds expended for the repayment of loans guaranteed under the provisions of subpart M shall also be excluded;
(iv)Funds expended for the acquisition,new construction or rehabilitation of property for housing that qualifies under
§570.208(aX3)shall be counted for this purpose but shall be limited to an amount determined by multiplying the total
cost(including CDBG and non-CDBG costs)of the acquisition,construction or rehabilitation by the percent of units in
such housing to be occupied by low and moderate income persons.
(v)Funds expended for any other activities qualifying under§570.208(a)shall be counted for this purpose in their
entirety.
(4)Compliance with environmental review procedures.The environmental review procedures set forth at 24 CFR part
58 must be completed for each activity(or project as defined in 24 CFR part 58),as applicable.
(5)Cost principles. Costs incurred,whether charged on a direct or an indirect basis,must be in conformance with
OMB Circulars A-87,"Cost Principles for State,Local and Indian Tribal Governments";A-122,"Cost Principles for
11
Non-profit Organizations";or A-21,"Cost Principles for Educational Institutions,"as applicable.i All items of cost
listed in Attachment B of these Circulars that require prior Federal agency approval are allowable without prior
approval of HUD to the extent they comply with the general policies and principles stated in Attachment A of such
circulars and are otherwise eligible under this subpart C,except for the following:
i These circulars are available from the American Communities Center by calling the following toll-free
numbers: (800)998-9999 or(800)483-2209(TDD).
(i)Depreciation methods for fixed assets shall not be changed without HUD's specific approval or,if charged through
a cost allocation plan,the Federal cognizant agency.
(ii)Fines and penalties(including punitive damages)are unallowable costs to the CDBG program.
(iii)Pre-award costs are limited to those authorized under paragraph(h)of this section.
(b)Special policies governing facilities.The following special policies apply to:
(1)Facilities containing both eligible and ineligible uses.A public facility otherwise eligible for assistance under the
CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible
uses,if:
(i)The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area
within the larger facility;and
(ii)The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct
from the overall costs of the multiple-use building and/or facility.
4
Allowable costs are limited to those attributable to the eligible portion of the building or facility.
(2)Fees for use of facilities. Reasonable fees may be charged for the use of the facilities assisted with CDBG funds,
but charges such as excessive membership fees,which will have the effect of precluding low and moderate income
persons from using the facilities,are not permitted.
(c)Special assessments under the CDBG program.The following policies relate to special assessments under the
CDBG program:
(1)Definition of special assessment.The term"special assessment"means the recovery of the capital costs of a
public improvement,such as streets,water or sewer lines,curbs,and gutters,through a fee or charge levied or filed
as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public
improvement,or a one-time charge made as a condition of access to a public improvement.This term does not relate
to taxes,or the establishment of the value of real estate for the purpose of levying real estate,property,or ad valorem
taxes,and does not include periodic charges based on the use of a public improvement,such as water or sewer user
charges,even if such charges include the recovery of all or some portion of the capital costs of the public
improvement.
(2)Special assessments to recover capital costs.Where CDBG funds are used to pay all or part of the cost of a
public improvement,special assessments may be imposed as follows:
(i)Special assessments to recover the CDBG funds may be made only against properties owned and occupied by
persons not of low and moderate income.Such assessments constitute program income.
(ii)Special assessments to recover the non-CDBG portion may be made provided that CDBG funds are used to pay
the special assessment in behalf of all properties owned and occupied by low and moderate income persons;except
that CDBG funds need not be used to pay the special assessments in behalf of properties owned and occupied by
moderate income persons if the grant recipient certifies that it does not have sufficient CDBG funds to pay the
assessments in behalf of all of the low and moderate income owner-occupant persons. Funds collected through such
special assessments are not program income.
12
(3)Public improvements not initially assisted with CDBG funds.The payment of special assessments with CDBG
funds constitutes CDBG assistance to the public improvement.Therefore,CDBG funds may be used to pay special
assessments provided:
(i)The installation of the public improvements was carried out in compliance with requirements applicable to activities
assisted under this part including environmental,citizen participation and Davis-Bacon requirements;
(ii)The installation of the public improvement meets a criterion for national objectives in§570.208(ax1),(b),or(c);
and
(iii)The requirements of§570.200(c)(2)(ii)are met.
(d)Consultant activities. Consulting services are eligible for assistance under this part for professional assistance in
program planning,development of community development objectives,and other general professional guidance
relating to program execution.The use of consultants is governed by the following:
(1)Employer-employee type of relationship. No person providing consultant services in an employer-employee type
of relationship shall receive more than a reasonable rate of compensation for personal services paid with CDBG
funds. In no event,however,shall such compensation exceed the equivalent of the daily rate paid for Level IV of the
Executive Schedule.Such services shall be evidenced by written agreements between the parties which detail the
responsibilities,standards,and compensation.
(2)Independent contractor relationship. Consultant services provided under an independent contractor relationship
are governed by the procurement requirements in 24 CFR 85.36,and are not subject to the compensation limitation
of Level IV of the Executive Schedule.
(e)Recipient determinations required as a condition of eligibility. In several instances under this subpart,the eligibility
of an activity depends on a special local determination.Recipients shall maintain documentation of all such
determinations.A written determination is required for any activity carried out under the authority of§§570.201(f),
570.201(iX2),570.201(p),570.201(q),570.202(b)(3),570.206(f),570.209,570.210,and 570.309.
(f)Means of carrying out eligible activities.(1)Activities eligible under this subpart, other than those authorized under
§570.204(a),may be undertaken,subject to local law:
(i)By the recipient through:
(A)Its employees,or
(B)Procurement contracts governed by the requirements of 24 CFR 85.36;or
(ii)Through loans or grants under agreements with subrecipients,as defined at§570.500(c);or
(iii)By one or more public agencies,including existing local public agencies,that are designated by the chief
executive officer of the recipient.
(2)Activities made eligible under§570.204(a)may only be undertaken by entities specified in that section.
(g)Limitation on planning and administrative costs. No more than 20 percent of the sum of any grant,plus program
income,shall be expended for planning and program administrative costs,as defined in§§570.205 and 507.206,
respectively. Recipients of entitlement grants under subpart D of this part shall conform with this requirement by
limiting the amount of CDBG funds obligated for planning plus administration during each program year to an amount
no greater than 20 percent of the sum of its entitlement grant made for that program year(if any)plus the program
income received by the recipient and its subrecipients(if any)during that program year.
(h)Reimbursement for pre-award costs.The effective date of the grant agreement is the program year start date or
the date that the consolidated plan is received by HUD,whichever is later.For a Section 108 loan guarantee,the
5
13
effective date of the grant agreement is the date of HUD execution of the grant agreement amendment for the
particular loan guarantee commitment.
(1)Prior to the effective date of the grant agreement,a recipient may incur costs or may authorize a subrecipient to
incur costs,and then after the effective date of the grant agreement pay for those costs using its CDBG funds,
provided that:
(i)The activity for which the costs are being incurred is included,prior to the costs being incurred,in a consolidated
plan action plan,an amended consolidated plan action plan,or an application under subpart M of this part,except
that a new entitlement grantee preparing to receive its first allocation of CDBG funds may incur costs necessary to
develop its consolidated plan and undertake other administrative actions necessary to receive its first grant,prior to
the costs being included in its consolidated plan;
(ii)Citizens are advised of the extent to which these pre-award costs will affect future grants;
(iii)The costs and activities funded are in compliance with the requirements of this part and with the Environmental
Review Procedures stated in 24 CFR part 58;
(iv)The activity for which payment is being made complies with the statutory and regulatory provisions in effect at the
time the costs are paid for with CDBG funds;
(v)CDBG payment will be made during a time no longer than the next two program years following the effective date
of the grant agreement or amendment in which the activity is first included;and
(vi)The total amount of pre-award costs to be paid during any program year pursuant to this provision is no more
than the greater of 25 percent of the amount of the grant made for that year or$300,000.
(2)Upon the written request of the recipient,HUD may authorize payment of pre-award costs for activities that do not
meet the criteria at paragraph(h)(1 Xv)or(h)(1 Xvi)of this section,if HUD determines,in writing,that there is good
cause for granting an exception upon consideration of the following factors,as applicable:
(i)Whether granting the authority would result in a significant contribution to the goals and purposes of the CDBG
program;
(ii)Whether failure to grant the authority would result in undue hardship to the recipient or beneficiaries of the activity;
(iii)Whether granting the authority would not result in a violation of a statutory provision or any other regulatory
provision;
(iv)Whether circumstances are clearly beyond the recipient's control;or
(v)Any other relevant considerations.
(i)Urban Development Action Grant. Grant assistance may be provided with Urban Development Action Grant funds,
subject to the provisions of subpart G,for:
(1)Activities eligible for assistance under this subpart;and
(2)Notwithstanding the provisions of§570.207,such other activities as the Secretary may determine to be consistent
with the purposes of the Urban Development Action Grant program.
(j)Faith-based activities. (1)Organizations that are religious or faith-based are eligible,on the same basis as any
other organization,to participate in the CDBG program.Neither the Federal government nor a State or local
government receiving funds under CDBG programs shall discriminate against an organization on the basis of the
organization's religious character or affiliation.
2)Organizations that are directly funded under the CDBG program may not engage in inherently religious activities,
such as worship,religious instruction,or proselytization,as part of the programs or services funded under this part. If
an organization conducts such activities,the activities must be offered separately,in time or location,from the
programs or services funded under this part,and participation must be voluntary for the beneficiaries of the
HUDfunded
programs or services.
(3)A religious organization that participates in the CDBG program will retain its independence from Federal,State,
and local governments,and may continue to carry out its mission,including the definition,practice,and expression of
its religious beliefs,provided that it does not use direct CDBG funds to support any inherently religious activities,such
as worship,religious instruction,or proselytization.Among other things,faith-based organizations may use space in
their facilities to provide CDBG-funded services,without removing religious art,icons,scriptures,or other religious
symbols. In addition,a CDBG-funded religious organization retains its authority over its internal governance,and it
may retain religious terms in its organization's name,select its board members on a religious basis,and include
religious references in its organization's mission statements and other governing documents.
(4)An organization that participates in the CDBG program shall not,in providing program assistance,discriminate
against a program beneficiary or prospective program beneficiary on the basis of religion or religious belief.
(5)CDBG funds may not be used for the acquisition,construction,or rehabilitation of structures to the extent that
those structures are used for inherently religious activities.CDBG funds may be used for the acquisition,construction,
or rehabilitation of structures only to the extent that those structures are used for conducting eligible activities under
this part.Where a structure is used for both eligible and inherently religious activities,CDBG funds may not exceed
the cost of those portions of the acquisition,construction,or rehabilitation that are attributable to eligible activities in
accordance with the cost accounting requirements applicable to CDBG funds in this part.Sanctuaries,chapels,or
other rooms that a CDBG-funded religious congregation uses as its principal place of worship,however,are ineligible
for CDBG-funded improvements. Disposition of real property after the term of the grant,or any change in use of the
property during the term of the grant,is subject to government-wide regulations governing real property disposition
6
see 24 CFR parts 84 and 85).
(6)If a State or local government voluntarily contributes its own funds to supplement federally funded activities,the
State or local government has the option to segregate the Federal funds or commingle them. However,if the funds
are commingled,this section applies to all of the commingled funds.
[53 FR 34439,Sept.6, 1988,as amended at 54 FR 47031,Nov.8, 1989;57 FR 27119,June 17, 1992;60 FR 1943,
Jan.5, 1995;60 FR 17445,Apr.6, 1995;60 FR 56910,Nov.9, 1995;61 FR 11476, Mar.20, 1996;61 FR 18674,
Apr.29, 1996;65 FR 70215, Nov.21,2000;68 FR 56404,Sept.30,2003;69 FR 32778,June 10,2004;70 FR
76369,Dec.23,2005; 72 FR 46370,Aug. 17,2007]
§570.201 Basic eligible activities.
CDBG funds may be used for the following activities:
(a)Acquisition.Acquisition in whole or in part by the recipient,or other public or private nonprofit entity,by purchase,
long-term lease,donation,or otherwise,of real property(including air rights,water rights, rights-of-way,easements,
and other interests therein)for any public purpose,subject to the limitations of§570.207.
(b)Disposition. Disposition,through sale,lease,donation,or otherwise,of any real property acquired with CDBG
funds or its retention for public purposes,including reasonable costs of temporarily managing such property or
property acquired under urban renewal,provided that the proceeds from any such disposition shall be program
income subject to the requirements set forth in§570.504.
(c)Public facilities and improvements.Acquisition,construction,reconstruction,rehabilitation or installation of public
facilities and improvements,except as provided in§570.207(a),carried out by the recipient or other public or private
nonprofit entities.(However,activities under this paragraph may be directed to the removal of material and
architectural barriers that restrict the mobility and accessibility of elderly or severely disabled persons to public
facilities and improvements,including those provided for in§570.207(ax1).)In undertaking such activities,design
features and improvements which promote energy efficiency may be included.Such activities may also include the
execution of architectural design features,and similar treatments intended to enhance the aesthetic quality of
15
facilities and improvements receiving CDBG assistance,such as decorative pavements,railings,sculptures,pools of
water and fountains,and other works of art. Facilities designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the prohibition of new housing construction described in
§570.207(b)(3).Such facilities include shelters for the homeless;convalescent homes;hospitals,nursing homes;
battered spouse shelters; halfway houses for run-away children,drug offenders or parolees;group homes for
mentally retarded persons and temporary housing for disaster victims. In certain cases,nonprofit entities and
subrecipients including those specified in§570.204 may acquire title to public facilities.When such facilities are
owned by nonprofit entities or subrecipients,they shall be operated so as to be open for use by the general public
during all normal hours of operation. Public facilities and improvements eligible for assistance under this paragraph
are subject to the policies in§570.200(b).
(d)Clearance and remediation activities. Clearance,demolition,and removal of buildings and improvements,
including movement of structures to other sites and remediation of known or suspected environmental contamination.
Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.
Remediation may include project-specific environmental assessment costs not otherwise eligible under§570.205.
(e)Public services. Provision of public services(including labor,supplies,and materials)including but not limited to
those concerned with employment,crime prevention,child care, health,drug abuse,education,fair housing
counseling,energy conservation,welfare(but excluding the provision of income payments identified under
§570.207(b)(4)),homebuyer downpayment assistance,or recreational needs.To be eligible for CDBG assistance,a
public service must be either a new service or a quantifiable increase in the level of an existing service above that
which has been provided by or on behalf of the unit of general local government(through funds raised by the unit or
received by the unit from the State in which it is located)in the 12 calendar months before the submission of the
action plan.(An exception to this requirement may be made if HUD determines that any decrease in the level of a
service was the result of events not within the control of the unit of general local government.)The amount of CDBG
funds used for public services shall not exceed paragraphs(e)(1)or(2)of this section,as applicable:
(1)The amount of CDBG funds used for public services shall not exceed 15 percent of each grant,except that for
entitlement grants made under subpart D of this part,the amount shall not exceed 15 percent of the grant plus 15
percent of program income,as defined in§570.500(a). For entitlement grants under subpart D of this part,
compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program
year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of
the program income received during the grantee's immediately preceding program year.
(2)A recipient which obligated more CDBG funds for public services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law
98-8),may obligate more CDBG funds than allowable under paragraph(e)(1)of this section,so long as the total
amount obligated in any program year does not exceed:
(i)For an entitlement grantee, 15%of the program income it received during the preceding program year;plus
(ii)A portion of the grant received for the program year which is the highest of the following amounts:
(A)The amount determined by applying the percentage of the grant it obligated for public services in the 1982
program year against the grant for its current program year,
(B)The amount determined by applying the percentage of the grant it obligated for public services in the 1983
program year against the grant for its current program year;
7
(C)The amount of funds it obligated for public services in the 1982 program year;or,
(D)The amount of funds it obligated for public services in the 1983 program year.
(f)Interim assistance.(1)The following activities may be undertaken on an interim basis in areas exhibiting
objectively determinable signs of physical deterioration where the recipient has determined that immediate action is
necessary to arrest the deterioration and that permanent improvements will be carried out as soon as practicable:
(i)The repairing of streets,sidewalks,parks,playgrounds,publicly owned utilities,and public buildings;and
16
(ii)The execution of special garbage,trash,and debris removal,including neighborhood cleanup campaigns,but not
the regular curbside collection of garbage or trash in an area.
(2)In order to alleviate emergency conditions threatening the public health and safety in areas where the chief
executive officer of the recipient determines that such an emergency condition exists and requires immediate
resolution,CDBG funds may be used for.
(i)The activities specified in paragraph(f)(1)of this section,except for the repair of parks and playgrounds;
(ii)The clearance of streets,including snow removal and similar activities,and
(iii)The improvement of private properties.
(3)All activities authorized under paragraph(f)(2)of this section are limited to the extent necessary to alleviate
emergency conditions.
(g)Payment of non-Federal share. Payment of the non-Federal share required in connection with a Federal grant-
inaid
program undertaken as part of CDBG activities,provided,that such payment shall be limited to activities
otherwise eligible and in compliance with applicable requirements under this subpart.
(h)Urban renewal completion. Payment of the cost of completing an urban renewal project funded under title I of the
Housing Act of 1949 as amended.Further information regarding the eligibility of such costs is set forth in§570.801.
(i)Relocation. Relocation payments and other assistance for permanently and temporarily relocated individuals
families,businesses,nonprofit organizations,and farm operations where the assistance is(1)required under the
provisions of§570.606(b)or(c);or(2)determined by the grantee to be appropriate under the provisions of
§570.606(d).
(j)Loss of rental income. Payments to housing owners for losses of rental income incurred in holding,for temporary
periods,housing units to be used for the relocation of individuals and families displaced by program activities assisted
under this part.
(k)Housing services. Housing services,as provided in section 105(a)(21)of the Act(42 U.S.C.5305(a)(21)).
(I)Privately owned utilities. CDBG funds may be used to acquire,construct,reconstruct,rehabilitate,or install the
distribution lines and facilities of privately owned utilities,including the placing underground of new or existing
distribution facilities and lines.
(m)Construction of housing. CDBG funds may be used for the construction of housing assisted under section 17 of
the United States Housing Act of 1937.
(n)Homeownership assistance. CDBG funds may be used to provide direct homeownership assistance to low-or
moderate-income households in accordance with section 105(a)of the Act.
(o)(1)The provision of assistance either through the recipient directly or through public and private organizations,
agencies,and other subrecipients(including nonprofit and for-profit subrecipients)to facilitate economic development
by:
(i)Providing credit,including,but not limited to,grants,loans, loan guarantees,and other forms of financial support,
for the establishment,stabilization,and expansion of microenterprises;
(ii)Providing technical assistance,advice,and business support services to owners of microenterprises and persons
developing microenterprises;and
(iii)Providing general support,including,but not limited to,peer support programs,counseling,child care,
transportation,and other similar services,to owners of microenterprises and persons developing microenterprises.
17
(2)Services provided this paragraph(o)shall not be subject to the restrictions on public services contained in
paragraph(e)of this section.
(3)For purposes of this paragraph(o),"persons developing microenterprises"means such persons who have
expressed interest and who are,or after an initial screening process are expected to be,actively working toward
developing businesses,each of which is expected to be a microenterprise at the time it is formed.
(4)Assistance under this paragraph(o)may also include training,technical assistance,or other support services to
increase the capacity of the recipient or subrecipient to carry out the activities under this paragraph(o).
(p) Technical assistance. Provision of technical assistance to public or nonprofit entities to increase the capacity of
such entities to carry out eligible neighborhood revitalization or economic development activities.(The recipient must
determine,prior to the provision of the assistance,that the activity for which it is attempting to build capacity would be
eligible for assistance under this subpart C,and that the national objective claimed by the grantee for this assistance
can reasonably be expected to be met once the entity has received the technical assistance and undertakes the
activity.)Capacity building for private or public entities(including grantees)for other purposes may be eligible under
§570.205.
(q)Assistance to institutions of higher education. Provision of assistance by the recipient to institutions of higher
education when the grantee determines that such an institution has demonstrated a capacity to carry out eligible
8
activities under this subpart C.
[53 FR 34439,Sept.6, 1988,as amended at 53 FR 31239,Aug. 17, 1988;55 FR 29308,July 18, 1990;57 FR
27119,June 17, 1992;60 FR 1943,Jan.5, 1995;60 FR 56911,Nov.9, 1995;61 FR 18674,Apr.29, 1996;65 FR
70215, Nov.21,2000;67 FR 47213,July 17,2002;71 FR 30034, May 24,2006]
§570.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation assistance. CDBG funds may be used to finance
the rehabilitation of:
(1)Privately owned buildings and improvements for residential purposes;improvements to a single-family residential
property which is also used as a place of business,which are required in order to operate the business, need not be
considered to be rehabilitation of a commercial or industrial building,if the improvements also provide general benefit
to the residential occupants of the building;
(2)Low-income public housing and other publicly owned residential buildings and improvements;
(3)Publicly or privately owned commercial or industrial buildings,except that the rehabilitation of such buildings
owned by a private for-profit business is limited to improvement to the exterior of the building,abatement of asbestos
hazards,lead-based paint hazard evaluation and reduction,and the correction of code violations;
(4)Nonprofit-owned nonresidential buildings and improvements not eligible under§570.201(c);and
(5)Manufactured housing when such housing constitutes part of the community's permanent housing stock.
(b) Types of assistance.CDBG funds may be used to finance the following types of rehabilitation activities,and
related costs,either singly,or in combination,through the use of grants,loans,loan guarantees,interest
supplements,or other means for buildings and improvements described in paragraph(a)of this section,except that
rehabilitation of commercial or industrial buildings is limited as described in paragraph(a)(3)of this section.
(1)Assistance to private individuals and entities,including profit making and nonprofit organizations,to acquire for the
purpose of rehabilitation,and to rehabilitate properties,for use or resale for residential purposes;
(2)Labor, materials,and other costs of rehabilitation of properties,including repair directed toward an accumulation
of deferred maintenance, replacement of principal fixtures and components of existing structures,installation of
security devices,including smoke detectors and dead bolt locks,and renovation through alterations,additions to,or
18
enhancement of existing structures and improvements,abatement of asbestos hazards(and other contaminants)in
buildings and improvements that may be undertaken singly,or in combination;
(3)Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such
financing is determined by the recipient to be necessary or appropriate to achieve the locality's community
development objectives;
(4)Improvements to increase the efficient use of energy in structures through such means as installation of storm
windows and doors,siding,wall and attic insulation,and conversion,modification,or replacement of heating and
cooling equipment,including the use of solar energy equipment;
(5)Improvements to increase the efficient use of water through such means as water savings faucets and shower
heads and repair of water leaks;
(6)Connection of residential structures to water distribution lines or local sewer collection lines;
(7)For rehabilitation carried out with CDBG funds,costs of:
(i)Initial homeowner warranty premiums;
(ii)Hazard insurance premiums,except where assistance is provided in the form of a grant;and
(iii)Flood insurance premiums for properties covered by the Flood Disaster Protection Act of 1973,pursuant to
§570.605.
(8)Costs of acquiring tools to be lent to owners,tenants,and others who will use such tools to carry out rehabilitation;
(9)Rehabilitation services,such as rehabilitation counseling,energy auditing,preparation of work specifications,loan
processing,inspections,and other services related to assisting owners,tenants,contractors,and other entities,
participating or seeking to participate in rehabilitation activities authorized under this section,under section 312 of the
Housing Act of 1964,as amended, under section 810 of the Act,or under section 17 of the United States Housing Act
of 1937;
(10)Assistance for the rehabilitation of housing under section 17 of the United States Housing Act of 1937;and
(11)Improvements designed to remove material and architectural bafflers that restrict the mobility and accessibility of
elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph(a)of this
section.
(c)Code enforcement. Costs incurred for inspection for code violations and enforcement of codes(e.g.,salaries and
related expenses of code enforcement inspectors and legal proceedings, but not including the cost of correcting the
violations)in deteriorating or deteriorated areas when such enforcement together with public or private
improvements, rehabilitation,or services to be provided may be expected to arrest the decline of the area.
(d)Historic preservation. CDBG funds may be used for the rehabilitation,preservation or restoration of historic
properties,whether publicly or privately owned.Historic properties are those sites or structures that are either listed in
or eligible to be listed in the National Register of Historic Places,listed in a State or local inventory of historic places,
or designated as a State or local landmark or historic district by appropriate law or ordinance.Historic preservation,
however,is not authorized for buildings for the general conduct of government.
(e)Renovation of closed buildings. CDBG funds may be used to renovate closed buildings,such as closed school
buildings,for use as an eligible public facility or to rehabilitate such buildings for housing.
(f)Lead-based paint activities.Lead-based paint activities pursuant to§570.608.
9
[53 FR 34439,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 60 FR 1944,Jan.5, 1995;60 FR 56911,
Nov.9, 1995;64 FR 50225,Sept. 15, 1999;71 FR 30035, May 24,2006]
§570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development activities in addition to other activities authorized
in this subpart that may be carried out as part of an economic development project.Guidelines for selecting activities
to assist under this paragraph are provided at§570.209.The recipient must ensure that the appropriate level of public
benefit will be derived pursuant to those guidelines before obligating funds under this authority.Special activities
authorized under this section do not include assistance for the construction of new housing.Activities eligible under
this section may include costs associated with project-specific assessment or remediation of known or suspected
environmental contamination.Special economic development activities include:
(a)The acquisition,construction,reconstruction,rehabilitation or installation of commercial or industrial buildings,
structures,and other real property equipment and improvements,including railroad spurs or similar extensions.Such
activities may be carried out by the recipient or public or private nonprofit subrecipients.
(b)The provision of assistance to a private for-profit business,including,but not limited to,grants,loans,loan
guarantees,interest supplements,technical assistance,and other forms of support,for any activity where the
assistance is appropriate to carry out an economic development project,excluding those described as ineligible in
§570207(a). In selecting businesses to assist under this authority,the recipient shall minimize,to the extent
practicable,displacement of existing businesses and jobs in neighborhoods.
(c)Economic development services in connection with activities eligible under this section,including,but not limited
to,outreach efforts to market available forms of assistance;screening of applicants;reviewing and underwriting
applications for assistance;preparation of all necessary agreements;management of assisted activities;and the
screening,referral,and placement of applicants for employment opportunities generated by CDBG-eligible economic
development activities,including the costs of providing necessary training for persons filling those positions.
[53 FR 34439,Sept.6,1988,as amended at 60 FR 1944,Jan.5, 1995;71 FR 30035,May 24,2006]
§570.204 Special activities by Community-Based Development Organizations(CBDOs).
(a)Eligible activities.The recipient may provide CDBG funds as grants or loans to any CBDO qualified under this
section to carry out a neighborhood revitalization,community economic development,or energy conservation project.
The funded project activities may include those listed as eligible under this subpart,and,except as described in
paragraph(b)of this section,activities not otherwise listed as eligible under this subpart.For purposes of qualifying
as a project under paragraphs(a)(1),(a)(2),and(a)(3)of this section,the funded activity or activities may be
considered either alone or in concert with other project activities either being carried out or for which funding has
been committed.For purposes of this section:
(1)Neighborhood revitalization project includes activities of sufficient size and scope to have an impact on the decline
of a geographic location within the jurisdiction of a unit of general local government(but not the entire jurisdiction)
designated in comprehensive plans,ordinances,or other local documents as a neighborhood,village,or similar
geographical designation;or the entire jurisdiction of a unit of general local government which is under 25,000
population;
(2)Community economic development project includes activities that increase economic opportunity,principally for
persons of low-and moderate-income,or that stimulate or retain businesses or permanent jobs,including projects
that include one or more such activities that are clearly needed to address a lack of affordable housing accessible to
existing or planned jobs and those activities specified at 24 CFR 91.1(a)(1)(iii);activities under this paragraph may
include costs associated with project-specific assessment or remediation of known or suspected environmental '
contamination;
(3)Energy conservation project includes activities that address energy conservation,principally for the benefit of the
residents of the recipient's jurisdiction;and
(4)To carry out a project means that the CBDO undertakes the funded activities directly or through contract with an
entity other than the grantee,or through the provision of financial assistance for activities in which it retains a direct
and controlling involvement and responsibilities.
(b)Ineligible activities. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this
subpart,this section does not authorize:
(1)Carrying out an activity described as ineligible in§570.207(a);
(2)Carrying out public services that do not meet the requirements of§570.201(e),except that:
(i)Services carried out under this section that are specifically designed to increase economic opportunities through
job training and placement and other employment support services,including,but not limited to,peer support
programs,counseling,child care,transportation,and other similar services;and
(ii)Services of any type carried out under this section pursuant to a strategy approved by HUD under the provisions
of 24 CFR 91.215(e)shall not be subject to the limitations in§570.201(eX1)or(2),as applicable;
(3)Providing assistance to activities that would otherwise be eligible under§570203 that do not meet the
requirements of§570.209;or
(4)Carrying out an activity that would otherwise be eligible under§570.205 or§570.206, but that would result in the
recipient's exceeding the spending limitation in§570.200(g).
(c)Eligible CBDOs. (1)A CBDO qualifying under this section is an organization which has the following
characteristics:
10
CDBG Regulations 24 CFR Part 570
Pages 11-156 will be furnished upon request
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
N tyn,t
Tab 2
"Exhibit D"
Partcip ant Income
Elie 'bili Form
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'd Floor-Augusta,Georgia 30901
ini
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov ' ;
EXHIBIT "D"
PARTICIPANT INCOME ELIGIBILITY FORM
(Documentation of Income Must be Attached to this Form-See#8)
The information requested below is confidential. This information is used only to track financial
and social status under federal regulations as required for the funding of programs by the U.S.
Department of Housing and Urban Development (HUD) and administered by the Housing and
Community Development Department on behalf of the City of Augusta. Programs requiring this
information include the Community Development Block Grant Program, Emergency Shelter Grant
Program, HOME and Housing Opportunities for Persons With AIDS.
Client Name:
(If services are provided to the child,please put child's name above.)
Client Address:
Parent Name(If applicable):
Neighborhood: Phone#: (Work) Home
1. Number of persons in household:
2. Total annual income of ALL persons residing in household: $
(Show calculation: Monthly income$ x(12 or 26)=$ )
3. Race:
[ ] White [ ] Black/African American [ ] Black/African American&White
[ ] Asian [ ] Asian&White [ ] Am. Indian/Alaskan Native&Black/African Am.
[ ] Am. Indian/Alaskan Native [ ] Native Hawaiian/Other Pacific Islander
[ ] Am.Indian/Alaskan Native&White [ ] Other Multi-Racial
[ ] Hispanic(of the race identified,check this block if the person is of Hispanic origin
4. Sex: [ ] Male [ ] Female
5. Female Head of Household? [ ] Yes [ ] No
6. Client 62 or older? [ ] Yes [ ] No
7. Disabled? [ ] Yes [ ] No
8. Attach Income verification(s) [ ] Yes [ ] No
(Verification of Income MUST BE ATTACHED. Examples of income verifications include check stubs,W-2 form,SSI, TANF,
Social Security,etc.)
Client Signature Witness Date
FOR OFFICE USE ONLY:
(Circle number of persons in household and indicate income by circling column a, b, c or d horizontally.)
Year 2018 Income Limits
Family Size a. Extremely Low Income b. Low Income c. Low/Moderate Income d. Not LM
(persons) (0%-30%of Median) (31%-50%of Median)
(51%-80%of Median)
1 $0- 13,100 $13,101 -21,850 $21,851 -34,900 $34,901+
2 $0- 16,460 $16,461 -24,950 $24,951 -39,900 $39,901+
3 $0-20,780 $20,781 -28,050 $28,051 -44,900 $44,901+
4 $0-25,100 $25,101 -31,150 $31,151 -49,850 $49,851+
5 $0-29,420 $29,421 -33,650 $33,651 -53,850 $53,851+
6 $0-33,740 $33,741 -36,150 $36,151 -57,850 $57,851+
7 $0-38,060 $38,061 -38,650 $38,651 -61,850 $61,851+
8 $0-41,150 $0-$41,150 $41,151 -65,850 $65,851+
CDBG 2018
MEMORANDUM OF AGREEMENT
November 27, 2018
Seeds For Life Community Development Block Grant (CDBG) Program
This Memorandum of Understanding is for the purpose of establishing the
responsibilities and requirements to be assumed by(name of grant recipient)and the City
of Augusta' Housing and Community Development (HCD) Department in providing a
Business Development grant of$10,000 (ten thousand) dollars to awarded recipients of
the Seeds For Life Grant program.
PROJECT DESCRIPTION
The Seeds For Life Business Development Grant is intended to provide an established
business of twelve months or of more working capital in the amount of$10,000 to foster
both business growth and additional employee retainage or hiring of low-mod eligible
employees. There will be 1o(ten) $10,000 dollar grants awarded: four to "pilot program"
recipients, with the remaining chosen through a competitive panel and a voter selection
process. This grant is intended to give established businesses a monetary infusion to help
them grow and expand their workforce while using the funds for but not limited to: new
or upgraded equipment, increased inventory, employee training, marketing and
advertising activities, new or upgraded signage, working or operating capital to include
salaries of newly hired employees.
GRANT FUNDS
Funding for this Project has been approved by the Augusta-Richmond County
Commission and the U.S. Department of Housing and Urban Development (U.S. HUD)
in the amount of $100,000 as part of the funding established for the Small Business
Development Loan fund. Overall there will be ten grants of $10,000 made to ten
businesses that all must be located in Augusta-Richmond County.
PROJECT ACTIVITIES
Faheem and Neal Blair for Georgia Green Lawn Care LLC and HCD agree to
jointly administer the "Project" as follows:
Mr. Faheem Blair and Mr. Neal Blair shall:
1. Comply with the Community Development Block Grant regulations as set forth at
24 CFR Part 570. (attached)
2. Must retain or hire a minimum of one HUD eligible low-moderate employee full
or part-time (see Exhibit D for eligibility requirements attached) with continuing
service for a minimum of twelve months of employment upon receipt of the grant.
(Exhibit D attached)
3. Georgia Green Lawn Care LLC shall, within six months of receiving funds
from AHCD, provide any and all requested documentation to substantiate the
retaining or hiring of a new full or part-time employee providing background
information of that eligible employee with their hours and responsibilities required
for the business.
4. At the end of the one-year award term, recipient will provide AHCD any and all
information requested related to the use of the CDBG funds for the improvement
of the business and the status of all full and part-time employees involved in this
grant MOA.
5. In the event that Georgia Green Lawn Care LLC is not able to retain or
hire a part or fulltime employee(s) or if for any reason, AHCD finds
reason that the recipient business misrepresented its intentions or the
use of the funds, HCD retains the right to rescind the grant and recall
the money to be repaid back to the City of Augusta.
6. Georgia Green Lawn Care LLC is aware that they can receive only one awarded
grant over the entire course of the grant program and once they are awarded can
no longer apply in the future.
The City of Augusta's Housing and Community Development Department shall report to
the U.S. Department of Housing and Urban Development statistics on the number of
persons employed by Georgia Green Lawn Care LLC.
In Witness Whereof,the parties have set their hands and seals as of the date first written
above.
Attest: Augusta, Georgia
By: Hardie DavisDate:
As Its May•r joillp
—APIPP
Cp
By: Janice Allen Jackso• Date: 1 lX
�. Its Admini i� •
+{ . •� 6.________
By: , : home Wei,I :� , r., Director Date: I Z/ 3 ilc,/
ApproA as to Form b . A, Date: /2/!/ /f
Andrew G. Mac enzie
General Counsel
By: Faheem Blair n Lawn Care LLC Date: ((/2 7/ /F
l_Qa )e-- Date: (C('z' 77/r
Neal Blair, Georgia Green Lawn Care LLC
OW
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
G 10::x t + • A
Tab
CDBG Regulations
24 CFR Part 570
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3"d Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov r'
§570.1 Purpose and primary objective.
(a)This part describes policies and procedures applicable to the following programs authorized under title I of the
Housing and Community Development Act of 1974,as amended:
(1)Entitlement grants program(subpart D);
(2)Nonentitlement Funds:HUD-administered Small Cities and Insular Area programs(subpart F);
(3)State program:State-administered CDBG nonentitlement funds(subpart I);
(4)Special Purpose Grants(subpart E);
(5)Urban Development Action Grant program(subpart G);and
(6)Loan Guarantees(subpart M).
(b)Subparts A,C,J, K,and 0 apply to all programs in paragraph(a)except as modified or limited under the
provisions of these subparts or the applicable program regulations. In the application of the subparts to Special
Purpose Grants or the Urban Development Action Grant program,the reference to funds in the form of grants in the
term "CDBG funds", as defined in§570.3,shall mean the grant funds under those programs.The subparts do not
apply to the State program(subpart I)except to the extent expressly referred to.
(c)The primary objective of the programs authorized under title I of the Housing and Community Development Act of
1974,as amended,is described in section 101(c)of the Act(42 U.S.C.5301(c)).
[53 FR 34437,Sept. 6, 1988,as amended at 56 FR 56126,Oct.31, 1991;61 FR 11475,Mar.20, 1996;69 FR
32778,June 10,2004]
§570.3 Definitions.
The terms HUD and Secretary are defined in 24 CFR part 5.All of the following definitions in this section that rely on
data from the United States Bureau of the Census shall rely upon the data available from the latest decennial census.
Act means title I of the Housing and Community Development Act of 1974 as amended(42 U.S.C.5301 et seq. ).
Age of housing means the number of year-round housing units,as further defined in section 102(a)(11)of the Act.
Applicant means a State or unit of general local government that makes application pursuant to the provisions of
subpart E, F,G or M.
Buildings for the general conduct of government shall have the meaning provided in section 102(ax21)of the Act.
CDBG funds means Community Development Block Grant funds,including funds received in the form of grants under
subpart D, F,or§570.405 of this part,funds awarded under section 108(q)of the Housing and Community
6
Development Act of 1974,loans guaranteed under subpart M of this part, urban renewal surplus grant funds,and
program income as defined in§570.500(a).
Chief executive officer of a State or unit of general local government means the elected official or the legally
designated official,who has the primary responsibility for the conduct of that entity's governmental affairs.Examples
of the"chief executive officer"of a unit of general local government are:the elected mayor of a municipality;the
elected county executive of a county;the chairperson of a county commission or board in a county that has no
elected county executive;and the official designated pursuant to law by the governing body of a unit of general local
government.
City means the following:
(1)For purposes of Entitlement Community Development Block Grant and Urban Development Action Grant
eligibility:
(i)Any unit of general local government that is classified as a municipality by the United States Bureau of the Census,
or
(ii)Any other unit of general local government that is a town or township and that, in the determination of the
Secretary:
(A)Possesses powers and performs functions comparable to those associated with municipalities;
(B)Is closely settled(except that the Secretary may reduce or waive this requirement on a case by case basis for the
purposes of the Action Grant program);and
(C)Contains within its boundaries no incorporated places as defined by the United States Bureau of the Census that
have not entered into cooperation agreements with the town or township for a period covering at least 3 years to
undertake or assist in the undertaking of essential community development and housing assistance activities.The
determination of eligibility of a town or township to qualify as a city will be based on information available from the
United States Bureau of the Census and information provided by the town or township and its included units of
general local government.
(2)For purposes of Urban Development Action Grant eligibility only,Guam,the Virgin Islands,American Samoa,the
Commonwealth of the Northern Mariana Islands,the counties of Kauai, Maui,and Hawaii in the State of Hawaii,and
Indian tribes that are eligible recipients under the State and Local Government Fiscal Assistance Act of 1972 and
located on reservations in Oklahoma as determined by the Secretary of the Interior or in Alaskan Native Villages.
Community Development Financial Institution has the same meaning as used in the Community Development
Banking and Financial Institutions Act of 1994(12 U.S.C.4701 note).
Consolidated plan.The plan prepared in accordance with 24 CFR part 91,which describes needs,resources,
priorities and proposed activities to be undertaken with respect to HUD programs, including the CDBG program.An
approved consolidated plan means a consolidated plan that has been approved by HUD in accordance with 24 CFR
part 91.
Discretionary grant means a grant made from the various Special Purpose Grants in accordance with subpart E of
this part.
1
Entitlement amount means the amount of funds which a metropolitan city is entitled to receive under the Entitlement
grant program,as determined by formula set forth in section 106 of the Act.
Extent of growth lag shall have the meaning provided in section 102(a)(12)of the Act.
Extent of housing overcrowding shall have the meaning provided in section 102(ax10)of the Act.
7
Extent of poverty means the number of persons whose incomes are below the poverty level based on data compiled
and published by the United States Bureau of the Census available from the latest census referable to the same point
or period in time and the latest reports from the Office of Management and Budget.For purposes of this part,the
Secretary has determined that it is neither feasible nor appropriate to make adjustments at this time in the
computations of"extent of poverty"for regional or area variations in income and cost of living.
Family means all persons living in the same household who are related by birth,marriage or adoption.
Household means all the persons who occupy a housing unit.The occupants may be a single family,one person
living alone,two or more families living together,or any other group of related or unrelated persons who share living
arrangements.
Income. For the purpose of determining whether a family or household is low-and moderate-income under subpart C
of this part,grantees may select any of the three definitions listed below for each activity,except that integrally related
activities of the same type and qualifying under the same paragraph of§570.208(a)shall use the same definition of
income.The option to choose a definition does not apply to activities that qualify under§570.208(a)(1)(Area benefit
activities),except when the recipient carries out a survey under§570.208(ax1 Xvi).Activities qualifying under
§570.208(ax1)generally must use the area income data supplied to recipients by HUD.The three definitions are as
follows:
(1 Xi)"Annual income"as defined under the Section 8 Housing Assistance Payments program at 24 CFR 813.106
(except that if the CDBG assistance being provided is homeowner rehabilitation under§570.202,the value of the
homeowner's primary residence may be excluded from any calculation of Net Family Assets);or
(ii)Annual income as reported under the Census long-form for the most recent available decennial Census.This
definition includes:
(A)Wages,salaries,tips,commissions,etc.;
(B)Self-employment income from own nonfarm business,including proprietorships and partnerships;
(C)Farm self-employment income;
(D)Interest,dividends,net rental income,or income from estates or trusts;
(E)Social Security or railroad retirement;
(F)Supplemental Security Income,Aid to Families with Dependent Children,or other public assistance or public
welfare programs;
(G)Retirement,survivor,or disability pensions;and
(H)Any other sources of income received regularly,including Veterans'(VA)payments,unemployment
compensation,and alimony;or
(iii)Adjusted gross income as defined for purposes of reporting under Internal Revenue Service(IRS)Form 1040 for
individual Federal annual income tax purposes.
(2)Estimate the annual income of a family or household by projecting the prevailing rate of income of each person at
the time assistance is provided for the individual,family,or household(as applicable).Estimated annual income shall
include income from all family or household members,as applicable. Income or asset enhancement derived from the
CDBG-assisted activity shall not be considered in calculating estimated annual income.
Insular area shall have the meaning provided in section 102(a)(24)of the Act.
8
Low-and moderate-income household means a household having an income equal to or less than the Section 8
lowincome
limit established by HUD.
Low-and moderate-income person means a member of a family having an income equal to or less than the Section 8
low-income limit established by HUD.Unrelated individuals will be considered as one-person families for this
purpose.
Low-income household means a household having an income equal to or less than the Section 8 very low-income
limit established by HUD.
Low-income person means a member of a family that has an income equal to or less than the Section 8 very
lowincome
limit established by HUD.Unrelated individuals shall be considered as one-person families for this purpose.
Metropolitan area shall have the meaning provided in section 102(a)(3)of the Act.
Metropolitan city shall have the meaning provided in section 102(a)(4)of the Act except that the term"central city"is
replaced by"principal city."
Microenterprise shall have the meaning provided in section 102(a)(22)of the Act.
Moderate-income household means a household having an income equal to or less than the Section 8 low-income
limit and greater than the Section 8 very low-income limit,established by HUD.
Moderate-income person means a member of a family that has an income equal to or less than the Section 8
lowincome
limit and greater than the Section 8 very low-income limit,established by HUD. Unrelated individuals shall be
2
considered as one-person families for this purpose.
Nonentitlement amount means the amount of funds which is allocated for use in a State's nonentitlement areas as
determined by formula set forth in section 106 of the Act.
Nonentitlement area shall have the meaning provided in section 102(a)(7)of the Act.
Population means the total resident population based on data compiled and published by the United States Bureau of
the Census available from the latest census or which has been upgraded by the Bureau to reflect the changes
resulting from the Boundary and Annexation Survey,new incorporations and consolidations of governments pursuant
to§570.4,and which reflects,where applicable,changes resulting from the Bureau's latest population determination
through its estimating technique using natural changes(birth and death)and net migration,and is referable to the
same point or period in time.
Small business means a business that meets the criteria set forth in section 3(a)of the Small Business Act(15 U.S.C.
631,636,637).
State shall have the meaning provided in section 102(a)(2)of the Act.
Unit of general local government shall have the meaning provided in section 102(a)(1)of the Act.
Urban county shall have the meaning provided in section 102(ax6)of the Act. For the purposes of this definition,
HUD will determine whether the county's combined population contains the required percentage of low-and
moderate-income persons by identifying the number of persons that resided in applicable areas and units of general
local government based on data from the most recent decennial census,and using income limits that would have
applied for the year in which that census was taken.
Urban Development Action Grant(UDAG)means a grant made by the Secretary pursuant to section 119 of the Act
and subpart G of this part.
9
[53 FR 34437,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 56 FR 56126,Oct.31, 1991;60 FR 1915,
1943,Jan. 5, 1995;60 FR 56909,Nov.9, 1995;61 FR 5209,Feb.9, 1996;61 FR 11475, Mar.20, 1996;61 FR
18674,Apr.29, 1996;68 FR 69582, Dec. 12,2003;69 FR 32778,June 10,2004]
§570.4 Allocation of funds.
(a)The determination of eligibility of units of general local government to receive entitlement grants,the entitlement
amounts,the allocation of appropriated funds to States for use in nonentitlement areas,the reallocation of funds,the
allocation of appropriated funds to insular areas,and the allocation of appropriated funds for discretionary grants
under the Secretary's Fund shall be governed by the policies and procedures described in sections 106 and 107 of
the Act,as appropriate.
(b)The definitions in§570.3 shall govern in applying the policies and procedures described in sections 106 and 107
of the Act.
(c)In determining eligibility for entitlement and in allocating funds under section 106 of the Act for any federal fiscal
year,HUD will recognize corporate status and geographical boundaries and the status of metropolitan areas and
principal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1)With respect to corporate status as certified by the applicable State and available for processing by the Census
Bureau as of such date;
(2)With respect to boundary changes or annexations,as are used by the Census Bureau in preparing population
estimates for all general purpose governmental units and are available for processing by the Census Bureau as of
such date,except that any such boundary changes or annexations which result in the population of a unit of general
local government reaching or exceeding 50,000 shall be recognized for this purpose whether or not such changes are
used by the Census Bureau in preparing such population estimates;and
(3)With respect to the status of Metropolitan Statistical Areas and principal cities,as officially designated by the
Office of Management and Budget as of such date.
(d)In determining whether a county qualifies as an urban county, and in computing entitlement amounts for urban
counties,the demographic values of population,poverty,housing overcrowding,and age of housing of any Indian
tribes located within the county shall be excluded. In allocating amounts to States for use in nonentitlement areas,the
demographic values of population,poverty,housing overcrowding and age of housing of all Indian tribes located in all
nonentitled areas shall be excluded.It is recognized that all such data on Indian tribes are not generally available
from the United States Bureau of the Census and that missing portions of data will have to be estimated. In
accomplishing any such estimates the Secretary may use such other related information available from reputable
sources as may seem appropriate,regardless of the data's point or period of time and shall use the best judgement
possible in adjusting such data to reflect the same point or period of time as the overall data from which the Indian
tribes are being deducted,so that such deduction shall not create an imbalance with those overall data.
(e)Amounts remaining after closeout of a grant which are required to be returned to HUD under the provisions of
§570.509,Grant closeout procedures,shall be considered as funds available for reallocation unless the appropriation
under which the funds were provided to the Department has lapsed.
[53 FR 34437,Sept.6,
p1988,as amended at 68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.5 Waivers.
HUD's authority for the waiver of regulations and for the suspension of requirements to address damage in a
Presidentially declared disaster area is described in 24 CFR part 5 and in section 122 of the Act,respectively.
[61 FR 11476, Mar.20, 1996]
Subpart B [Reserved]
3
10
Subpart C—Eligible Activities
Source: 53 FR 34439, Sept.6, 1988, unless otherwise noted.
§570.200 General policies.
(a)Determination of eligibility.An activity may be assisted in whole or in part with CDBG funds only if all of the
following requirements are met:
(1)Compliance with section 105 of the Act. Each activity must meet the eligibility requirements of section 105 of the
Act as further defined in this subpart.
(2)Compliance with national objectives.Grant recipients under the Entitlement and HUD-administered Small Cities
programs and recipients of insular area funds under section 106 of the Act must certify that their projected use of
funds has been developed so as to give maximum feasible priority to activities which will carry out one of the national
objectives of benefit to low-and moderate-income families or aid in the prevention or elimination of slums or blight.
The projected use of funds may also include activities that the recipient certifies are designed to meet other
community development needs having a particular urgency because existing conditions pose a serious and
immediate threat to the health or welfare of the community where other financial resources are not available to meet
such needs.Consistent with the foregoing,each recipient under the Entitlement or HUD-administered Small Cities
programs,and each recipient of insular area funds under section 106 of the Act must ensure and maintain evidence
that each of its activities assisted with CDBG funds meets one of the three national objectives as contained in its
certification.Criteria for determining whether an activity addresses one or more of these objectives are found in
§570208.
(3)Compliance with the primary objective.The primary objective of the Act is described in section 101(c)of the Act.
Consistent with this objective,entitlement recipients,non-entitlement CDBG grantees in Hawaii,and recipients of
insular area funds under section 106 of the Act must ensure that,over a period of time specified in their certification
not to exceed three years,not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities
meeting the criteria under§570.208(a)or under§570.208(dX5)or(6)for benefiting low-and moderate-income
persons.For grants under section 107 of the Act,insular area recipients must meet this requirement for each
separate grant.See§570.420(d)(3)for additional discussion of the primary objective requirement for insular areas
funded under section 106 of the Act.The requirements for the HUD-administered Small Cities program in New York
are at§570.420(d)(2). In determining the percentage of funds expended for such activities:
(i)Cost of administration and planning eligible under§570.205 and§570.206 will be assumed to benefit low and
moderate income persons in the same proportion as the remainder of the CDBG funds and,accordingly shall be
excluded from the calculation;
(ii)Funds deducted by HUD for repayment of urban renewal temporary loans pursuant to§570.802(b)shall be
excluded;
(iii)Funds expended for the repayment of loans guaranteed under the provisions of subpart M shall also be excluded;
(iv)Funds expended for the acquisition, new construction or rehabilitation of property for housing that qualifies under
§570.208(ax3)shall be counted for this purpose but shall be limited to an amount determined by multiplying the total
cost(including CDBG and non-CDBG costs)of the acquisition,construction or rehabilitation by the percent of units in
such housing to be occupied by low and moderate income persons.
(v)Funds expended for any other activities qualifying under§570.208(a)shall be counted for this purpose in their
entirety.
(4)Compliance with environmental review procedures.The environmental review procedures set forth at 24 CFR part
58 must be completed for each activity(or project as defined in 24 CFR part 58),as applicable.
(5)Cost principles. Costs incurred,whether charged on a direct or an indirect basis,must be in conformance with
OMB Circulars A-87,"Cost Principles for State,Local and Indian Tribal Governments";A-122,"Cost Principles for
11
Non-profit Organizations";or A-21,"Cost Principles for Educational Institutions,"as applicable.r All items of cost
listed in Attachment B of these Circulars that require prior Federal agency approval are allowable without prior
approval of HUD to the extent they comply with the general policies and principles stated in Attachment A of such
circulars and are otherwise eligible under this subpart C,except for the following:
These circulars are available from the American Communities Center by calling the following toll-free
numbers: (800)998-9999 or(800)483-2209(TDD).
(i)Depreciation methods for fixed assets shall not be changed without HUD's specific approval or,if charged through
a cost allocation plan,the Federal cognizant agency.
(ii)Fines and penalties(including punitive damages)are unallowable costs to the CDBG program.
(iii)Pre-award costs are limited to those authorized under paragraph(h)of this section.
(b)Special policies governing facilities.The following special policies apply to:
(1)Facilities containing both eligible and ineligible uses.A public facility otherwise eligible for assistance under the
CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible
uses,if:
(i)The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area
within the larger facility;and
(ii)The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct
from the overall costs of the multiple-use building and/or facility.
4
Allowable costs are limited to those attributable to the eligible portion of the building or facility.
(2)Fees for use of facilities. Reasonable fees may be charged for the use of the facilities assisted with CDBG funds,
but charges such as excessive membership fees,which will have the effect of precluding low and moderate income
persons from using the facilities,are not permitted.
(c)Special assessments under the CDBG program.The following policies relate to special assessments under the
CDBG program:
(1)Definition of special assessment. The term"special assessment"means the recovery of the capital costs of a
public improvement,such as streets,water or sewer lines,curbs,and gutters,through a fee or charge levied or filed
as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public
improvement,or a one-time charge made as a condition of access to a public improvement.This term does not relate
to taxes,or the establishment of the value of real estate for the purpose of levying real estate,property,or ad valorem
taxes,and does not include periodic charges based on the use of a public improvement,such as water or sewer user
charges,even if such charges include the recovery of all or some portion of the capital costs of the public
improvement.
(2)Special assessments to recover capital costs.Where CDBG funds are used to pay all or part of the cost of a
public improvement,special assessments may be imposed as follows:
(i)Special assessments to recover the CDBG funds may be made only against properties owned and occupied by
persons not of low and moderate income.Such assessments constitute program income.
(ii)Special assessments to recover the non-CDBG portion may be made provided that CDBG funds are used to pay
the special assessment in behalf of all properties owned and occupied by low and moderate income persons;except
that CDBG funds need not be used to pay the special assessments in behalf of properties owned and occupied by
moderate income persons if the grant recipient certifies that it does not have sufficient CDBG funds to pay the
assessments in behalf of all of the low and moderate income owner-occupant persons.Funds collected through such
special assessments are not program income.
12
(3)Public improvements not initially assisted with CDBG funds.The payment of special assessments with CDBG
funds constitutes CDBG assistance to the public improvement.Therefore,CDBG funds may be used to pay special
assessments provided:
(i)The installation of the public improvements was carried out in compliance with requirements applicable to activities
assisted under this part including environmental,citizen participation and Davis-Bacon requirements;
(ii)The installation of the public improvement meets a criterion for national objectives in§570.208(ax 1),(b),or(c);
and
(iii)The requirements of§570.200(c)(2)(ii)are met.
(d)Consultant activities. Consulting services are eligible for assistance under this part for professional assistance in
program planning,development of community development objectives,and other general professional guidance
relating to program execution.The use of consultants is governed by the following:
(1)Employer-employee type of relationship.No person providing consultant services in an employer-employee type
of relationship shall receive more than a reasonable rate of compensation for personal services paid with CDBG
funds. In no event,however,shall such compensation exceed the equivalent of the daily rate paid for Level IV of the
Executive Schedule.Such services shall be evidenced by written agreements between the parties which detail the
responsibilities,standards,and compensation.
(2)Independent contractor relationship. Consultant services provided under an independent contractor relationship
are governed by the procurement requirements in 24 CFR 85.36,and are not subject to the compensation limitation
of Level IV of the Executive Schedule.
(e)Recipient determinations required as a condition of eligibility. In several instances under this subpart,the eligibility
of an activity depends on a special local determination. Recipients shall maintain documentation of all such
determinations.A written determination is required for any activity carried out under the authority of§§570.201(f),
570.201(iX2),570.201(p),570.201(q),570.202(b)(3),570.206(f),570.209,570.210,and 570.309.
(f)Means of carrying out eligible activities.(1)Activities eligible under this subpart,other than those authorized under
§570.204(a),may be undertaken,subject to local law:
(i)By the recipient through:
(A)Its employees,or
(B)Procurement contracts governed by the requirements of 24 CFR 85.36;or
(ii)Through loans or grants under agreements with subrecipients,as defined at§570.500(c);or
(iii)By one or more public agencies,including existing local public agencies,that are designated by the chief
executive officer of the recipient.
(2)Activities made eligible under§570.204(a)may only be undertaken by entities specified in that section.
(g)Limitation on planning and administrative costs. No more than 20 percent of the sum of any grant,plus program
income,shall be expended for planning and program administrative costs,as defined in§§570.205 and 507.206,
respectively. Recipients of entitlement grants under subpart D of this part shall conform with this requirement by
limiting the amount of CDBG funds obligated for planning plus administration during each program year to an amount
no greater than 20 percent of the sum of its entitlement grant made for that program year(if any)plus the program
income received by the recipient and its subrecipients(if any)during that program year.
(h)Reimbursement for pre-award costs.The effective date of the grant agreement is the program year start date or
the date that the consolidated plan is received by HUD,whichever is later. For a Section 108 loan guarantee,the
5
13
effective date of the grant agreement is the date of HUD execution of the grant agreement amendment for the
particular loan guarantee commitment.
(1)Prior to the effective date of the grant agreement,a recipient may incur costs or may authorize a subrecipient to
incur costs,and then after the effective date of the grant agreement pay for those costs using its CDBG funds,
provided that:
(i)The activity for which the costs are being incurred is included,prior to the costs being incurred,in a consolidated
plan action plan,an amended consolidated plan action plan,or an application under subpart M of this part,except
that a new entitlement grantee preparing to receive its first allocation of CDBG funds may incur costs necessary to
develop its consolidated plan and undertake other administrative actions necessary to receive its first grant,prior to
the costs being included in its consolidated plan;
(ii)Citizens are advised of the extent to which these pre-award costs will affect future grants;
(iii)The costs and activities funded are in compliance with the requirements of this part and with the Environmental
Review Procedures stated in 24 CFR part 58;
(iv)The activity for which payment is being made complies with the statutory and regulatory provisions in effect at the
time the costs are paid for with CDBG funds;
(v)CDBG payment will be made during a time no longer than the next two program years following the effective date
of the grant agreement or amendment in which the activity is first included;and
(vi)The total amount of pre-award costs to be paid during any program year pursuant to this provision is no more
than the greater of 25 percent of the amount of the grant made for that year or$300,000.
(2)Upon the written request of the recipient,HUD may authorize payment of pre-award costs for activities that do not
meet the criteria at paragraph(hx1 Xv)or(h)(1 Xvi)of this section,if HUD determines,in writing,that there is good
cause for granting an exception upon consideration of the following factors,as applicable:
(i)Whether granting the authority would result in a significant contribution to the goals and purposes of the CDBG
program;
(ii)Whether failure to grant the authority would result in undue hardship to the recipient or beneficiaries of the activity;
(iii)Whether granting the authority would not result in a violation of a statutory provision or any other regulatory
provision;
(iv)Whether circumstances are clearly beyond the recipient's control;or
(v)Any other relevant considerations.
(i)Urban Development Action Grant. Grant assistance may be provided with Urban Development Action Grant funds,
subject to the provisions of subpart G,for:
(1)Activities eligible for assistance under this subpart;and
(2)Notwithstanding the provisions of§570.207,such other activities as the Secretary may determine to be consistent
with the purposes of the Urban Development Action Grant program.
(j)Faith-based activities.(1)Organizations that are religious or faith-based are eligible,on the same basis as any
other organization,to participate in the CDBG program.Neither the Federal government nor a State or local
government receiving funds under CDBG programs shall discriminate against an organization on the basis of the
organization's religious character or affiliation.
2)Organizations that are directly funded under the CDBG program may not engage in inherently religious activities,
such as worship,religious instruction,or proselytization,as part of the programs or services funded under this part. If
an organization conducts such activities,the activities must be offered separately,in time or location,from the
programs or services funded under this part,and participation must be voluntary for the beneficiaries of the
HUDfunded
programs or services.
(3)A religious organization that participates in the CDBG program will retain its independence from Federal,State,
and local governments,and may continue to carry out its mission,including the definition,practice,and expression of
its religious beliefs,provided that it does not use direct CDBG funds to support any inherently religious activities,such
as worship,religious instruction,or proselytization.Among other things,faith-based organizations may use space in
their facilities to provide CDBG-funded services,without removing religious art,icons,scriptures,or other religious
symbols. In addition,a CDBG-funded religious organization retains its authority over its internal governance,and it
may retain religious terms in its organization's name,select its board members on a religious basis,and include
religious references in its organization's mission statements and other governing documents.
(4)An organization that participates in the CDBG program shall not,in providing program assistance,discriminate
against a program beneficiary or prospective program beneficiary on the basis of religion or religious belief.
(5)CDBG funds may not be used for the acquisition,construction,or rehabilitation of structures to the extent that
those structures are used for inherently religious activities.CDBG funds may be used for the acquisition,construction,
or rehabilitation of structures only to the extent that those structures are used for conducting eligible activities under
this part.Where a structure is used for both eligible and inherently religious activities,CDBG funds may not exceed
the cost of those portions of the acquisition,construction,or rehabilitation that are attributable to eligible activities in
accordance with the cost accounting requirements applicable to CDBG funds in this part.Sanctuaries,chapels,or
other rooms that a CDBG-funded religious congregation uses as its principal place of worship,however,are ineligible
for CDBG-funded improvements.Disposition of real property after the term of the grant,or any change in use of the
property during the term of the grant,is subject to government-wide regulations governing real property disposition
6
see 24 CFR parts 84 and 85).
(6)If a State or local government voluntarily contributes its own funds to supplement federally funded activities,the
State or local government has the option to segregate the Federal funds or commingle them. However,if the funds
are commingled,this section applies to all of the commingled funds.
[53 FR 34439,Sept.6, 1988,as amended at 54 FR 47031,Nov.8, 1989;57 FR 27119,June 17, 1992;60 FR 1943,
Jan.5, 1995;60 FR 17445,Apr.6, 1995;60 FR 56910, Nov.9, 1995;61 FR 11476,Mar.20, 1996;61 FR 18674,
Apr.29, 1996;65 FR 70215, Nov.21,2000;68 FR 56404,Sept.30,2003;69 FR 32778,June 10,2004;70 FR
76369,Dec.23,2005;72 FR 46370,Aug. 17,2007]
§570.201 Basic eligible activities.
CDBG funds may be used for the following activities:
(a)Acquisition.Acquisition in whole or in part by the recipient,or other public or private nonprofit entity,by purchase,
long-term lease,donation,or otherwise,of real property(including air rights,water rights,rights-of-way,easements,
and other interests therein)for any public purpose,subject to the limitations of§570.207.
(b)Disposition. Disposition,through sale,lease,donation,or otherwise,of any real property acquired with CDBG
funds or its retention for public purposes, including reasonable costs of temporarily managing such property or
property acquired under urban renewal,provided that the proceeds from any such disposition shall be program
income subject to the requirements set forth in§570.504.
(c)Public facilities and improvements.Acquisition,construction,reconstruction,rehabilitation or installation of public
facilities and improvements,except as provided in§570.207(a),carried out by the recipient or other public or private
nonprofit entities.(However,activities under this paragraph may be directed to the removal of material and
architectural barriers that restrict the mobility and accessibility of elderly or severely disabled persons to public
facilities and improvements,including those provided for in§570.207(ax1).)In undertaking such activities,design
features and improvements which promote energy efficiency may be included.Such activities may also include the
execution of architectural design features,and similar treatments intended to enhance the aesthetic quality of
15
facilities and improvements receiving CDBG assistance,such as decorative pavements,railings,sculptures,pools of
water and fountains,and other works of art. Facilities designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the prohibition of new housing construction described in
§570.207(bX3).Such facilities include shelters for the homeless;convalescent homes;hospitals,nursing homes;
battered spouse shelters; halfway houses for run-away children,drug offenders or parolees;group homes for
mentally retarded persons and temporary housing for disaster victims. In certain cases,nonprofit entities and
subrecipients including those specified in§570.204 may acquire title to public facilities.When such facilities are
owned by nonprofit entities or subrecipients,they shall be operated so as to be open for use by the general public
during all normal hours of operation. Public facilities and improvements eligible for assistance under this paragraph
are subject to the policies in§570.200(b).
(d)Clearance and remediation activities. Clearance,demolition,and removal of buildings and improvements,
including movement of structures to other sites and remediation of known or suspected environmental contamination.
Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.
Remediation may include project-specific environmental assessment costs not otherwise eligible under§570.205.
(e)Public services. Provision of public services(including labor,supplies,and materials)including but not limited to
those concerned with employment,crime prevention,child care,health,drug abuse,education,fair housing
counseling,energy conservation,welfare(but excluding the provision of income payments identified under
§570.207(b)(4)),homebuyer downpayment assistance,or recreational needs.To be eligible for CDBG assistance,a
public service must be either a new service or a quantifiable increase in the level of an existing service above that
which has been provided by or on behalf of the unit of general local government(through funds raised by the unit or
received by the unit from the State in which it is located)in the 12 calendar months before the submission of the
action plan.(An exception to this requirement may be made if HUD determines that any decrease in the level of a
service was the result of events not within the control of the unit of general local government.)The amount of CDBG
funds used for public services shall not exceed paragraphs(e)(1)or(2)of this section,as applicable:
(1)The amount of CDBG funds used for public services shall not exceed 15 percent of each grant,except that for
entitlement grants made under subpart D of this part,the amount shall not exceed 15 percent of the grant plus 15
percent of program income,as defined in§570.500(a). For entitlement grants under subpart D of this part,
compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program
year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of
the program income received during the grantee's immediately preceding program year.
(2)A recipient which obligated more CDBG funds for public services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law
98-8),may obligate more CDBG funds than allowable under paragraph(ext)of this section,so long as the total
amount obligated in any program year does not exceed:
(i)For an entitlement grantee, 15%of the program income it received during the preceding program year;plus
(ii)A portion of the grant received for the program year which is the highest of the following amounts:
(A)The amount determined by applying the percentage of the grant it obligated for public services in the 1982
program year against the grant for its current program year,
(B)The amount determined by applying the percentage of the grant it obligated for public services in the 1983
program year against the grant for its current program year;
7
(C)The amount of funds it obligated for public services in the 1982 program year;or,
(D)The amount of funds it obligated for public services in the 1983 program year.
(f)Interim assistance. (1)The following activities may be undertaken on an interim basis in areas exhibiting
objectively determinable signs of physical deterioration where the recipient has determined that immediate action is
necessary to arrest the deterioration and that permanent improvements will be carried out as soon as practicable:
(i)The repairing of streets,sidewalks,parks,playgrounds,publicly owned utilities,and public buildings;and
16
(ii)The execution of special garbage,trash,and debris removal,including neighborhood cleanup campaigns,but not
the regular curbside collection of garbage or trash in an area.
(2)In order to alleviate emergency conditions threatening the public health and safety in areas where the chief
executive officer of the recipient determines that such an emergency condition exists and requires immediate
resolution,CDBG funds may be used for.
(i)The activities specified in paragraph(f)(1)of this section,except for the repair of parks and playgrounds;
(ii)The clearance of streets,including snow removal and similar activities,and
(iii)The improvement of private properties.
(3)All activities authorized under paragraph(f)(2)of this section are limited to the extent necessary to alleviate
emergency conditions.
(g)Payment of non-Federal share. Payment of the non-Federal share required in connection with a Federal grant-
inaid
program undertaken as part of CDBG activities,provided,that such payment shall be limited to activities
otherwise eligible and in compliance with applicable requirements under this subpart.
(h)Urban renewal completion. Payment of the cost of completing an urban renewal project funded under title I of the
Housing Act of 1949 as amended.Further information regarding the eligibility of such costs is set forth in§570.801.
(i)Relocation. Relocation payments and other assistance for permanently and temporarily relocated individuals
families,businesses,nonprofit organizations,and farm operations where the assistance is(1)required under the
provisions of§570.606(b)or(c);or(2)determined by the grantee to be appropriate under the provisions of
§570.606(d).
(j)Loss of rental income. Payments to housing owners for losses of rental income incurred in holding,for temporary
periods,housing units to be used for the relocation of individuals and families displaced by program activities assisted
under this part.
(k)Housing services. Housing services,as provided in section 105(a)(21)of the Act(42 U.S.C.5305(a)(21)).
(I)Privately owned utilities. CDBG funds may be used to acquire,construct, reconstruct,rehabilitate,or install the
distribution lines and facilities of privately owned utilities,including the placing underground of new or existing
distribution facilities and lines.
(m)Construction of housing. CDBG funds may be used for the construction of housing assisted under section 17 of
the United States Housing Act of 1937.
(n)Homeownership assistance. CDBG funds may be used to provide direct homeownership assistance to low-or
moderate-income households in accordance with section 105(a)of the Act.
(o)(1)The provision of assistance either through the recipient directly or through public and private organizations,
agencies,and other subrecipients(including nonprofit and for-profit subrecipients)to facilitate economic development
by:
(i)Providing credit,including,but not limited to,grants,loans,loan guarantees,and other forms of financial support,
for the establishment,stabilization,and expansion of microenterprises;
(ii)Providing technical assistance,advice,and business support services to owners of microenterprises and persons
developing microenterprises;and
(iii)Providing general support,including,but not limited to,peer support programs,counseling,child care,
transportation,and other similar services,to owners of microenterprises and persons developing microenterprises.
17
(2)Services provided this paragraph(o)shall not be subject to the restrictions on public services contained in
paragraph(e)of this section.
(3)For purposes of this paragraph(o),"persons developing microenterprises"means such persons who have
expressed interest and who are,or after an initial screening process are expected to be,actively working toward
developing businesses,each of which is expected to be a microenterprise at the time it is formed.
(4)Assistance under this paragraph(o)may also include training,technical assistance,or other support services to
increase the capacity of the recipient or subrecipient to carry out the activities under this paragraph(o).
(p)Technical assistance. Provision of technical assistance to public or nonprofit entities to increase the capacity of
such entities to carry out eligible neighborhood revitalization or economic development activities.(The recipient must
determine,prior to the provision of the assistance,that the activity for which it is attempting to build capacity would be
eligible for assistance under this subpart C,and that the national objective claimed by the grantee for this assistance
can reasonably be expected to be met once the entity has received the technical assistance and undertakes the
activity.)Capacity building for private or public entities(including grantees)for other purposes may be eligible under
§570.205.
(q)Assistance to institutions of higher education. Provision of assistance by the recipient to institutions of higher
education when the grantee determines that such an institution has demonstrated a capacity to carry out eligible
8
activities under this subpart C.
[53 FR 34439,Sept.6, 1988,as amended at 53 FR 31239,Aug. 17, 1988;55 FR 29308,July 18, 1990;57 FR
27119,June 17, 1992;60 FR 1943,Jan.5, 1995;60 FR 56911, Nov.9, 1995;61 FR 18674,Apr.29, 1996;65 FR
70215, Nov.21,2000;67 FR 47213,July 17,2002;71 FR 30034, May 24,2006]
§ 570.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation assistance. CDBG funds may be used to finance
the rehabilitation of:
(1)Privately owned buildings and improvements for residential purposes;improvements to a single-family residential
property which is also used as a place of business,which are required in order to operate the business,need not be
considered to be rehabilitation of a commercial or industrial building,if the improvements also provide general benefit
to the residential occupants of the building;
(2)Low-income public housing and other publicly owned residential buildings and improvements;
(3)Publicly or privately owned commercial or industrial buildings,except that the rehabilitation of such buildings
owned by a private for-profit business is limited to improvement to the exterior of the building,abatement of asbestos
hazards,lead-based paint hazard evaluation and reduction,and the correction of code violations;
(4)Nonprofit-owned nonresidential buildings and improvements not eligible under§570.201(c);and
(5)Manufactured housing when such housing constitutes part of the community's permanent housing stock.
(b) Types of assistance. CDBG funds may be used to finance the following types of rehabilitation activities,and
related costs,either singly,or in combination,through the use of grants,loans,loan guarantees,interest
supplements,or other means for buildings and improvements described in paragraph(a)of this section,except that
rehabilitation of commercial or industrial buildings is limited as described in paragraph(aX3)of this section.
(1)Assistance to private individuals and entities,including profit making and nonprofit organizations,to acquire for the
purpose of rehabilitation,and to rehabilitate properties,for use or resale for residential purposes;
(2)Labor, materials,and other costs of rehabilitation of properties,including repair directed toward an accumulation
of deferred maintenance,replacement of principal fixtures and components of existing structures,installation of
security devices, including smoke detectors and dead bolt locks,and renovation through alterations,additions to,or
18
enhancement of existing structures and improvements,abatement of asbestos hazards(and other contaminants)in
buildings and improvements that may be undertaken singly,or in combination;
(3)Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such
financing is determined by the recipient to be necessary or appropriate to achieve the locality's community
development objectives;
(4)Improvements to increase the efficient use of energy in structures through such means as installation of storm
windows and doors,siding,wall and attic insulation,and conversion,modification,or replacement of heating and
cooling equipment,including the use of solar energy equipment;
(5) Improvements to increase the efficient use of water through such means as water savings faucets and shower
heads and repair of water leaks;
(6)Connection of residential structures to water distribution lines or local sewer collection lines;
(7)For rehabilitation carried out with CDBG funds,costs of:
(i)Initial homeowner warranty premiums;
(ii)Hazard insurance premiums,except where assistance is provided in the form of a grant;and
(iii)Flood insurance premiums for properties covered by the Flood Disaster Protection Act of 1973,pursuant to
§570.605.
(8)Costs of acquiring tools to be lent to owners,tenants,and others who will use such tools to carry out rehabilitation;
(9)Rehabilitation services,such as rehabilitation counseling,energy auditing,preparation of work specifications,loan
processing,inspections,and other services related to assisting owners,tenants,contractors,and other entities,
participating or seeking to participate in rehabilitation activities authorized under this section,under section 312 of the
Housing Act of 1964, as amended, under section 810 of the Act,or under section 17 of the United States Housing Act
of 1937;
(10)Assistance for the rehabilitation of housing under section 17 of the United States Housing Act of 1937;and
(11)Improvements designed to remove material and architectural barriers that restrict the mobility and accessibility of
elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph(a)of this
section.
(c)Code enforcement. Costs incurred for inspection for code violations and enforcement of codes(e.g.,salaries and
related expenses of code enforcement inspectors and legal proceedings,but not including the cost of correcting the
violations)in deteriorating or deteriorated areas when such enforcement together with public or private
improvements, rehabilitation,or services to be provided may be expected to arrest the decline of the area.
(d)Historic preservation. CDBG funds may be used for the rehabilitation,preservation or restoration of historic
properties,whether publicly or privately owned.Historic properties are those sites or structures that are either listed in
or eligible to be listed in the National Register of Historic Places,listed in a State or local inventory of historic places,
or designated as a State or local landmark or historic district by appropriate law or ordinance.Historic preservation,
however, is not authorized for buildings for the general conduct of government.
(e)Renovation of closed buildings. CDBG funds may be used to renovate closed buildings,such as closed school
buildings,for use as an eligible public facility or to rehabilitate such buildings for housing.
(f)Lead-based paint activities.Lead-based paint activities pursuant to§570.608.
9
[53 FR 34439,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 60 FR 1944,Jan.5, 1995;60 FR 56911,
Nov.9, 1995;64 FR 50225,Sept. 15, 1999;71 FR 30035,May 24,2006]
§570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development activities in addition to other activities authorized
in this subpart that may be carried out as part of an economic development project.Guidelines for selecting activities
to assist under this paragraph are provided at§570.209.The recipient must ensure that the appropriate level of public
benefit will be derived pursuant to those guidelines before obligating funds under this authority.Special activities
authorized under this section do not include assistance for the construction of new housing.Activities eligible under
this section may include costs associated with project-specific assessment or remediation of known or suspected
environmental contamination.Special economic development activities include:
(a)The acquisition,construction,reconstruction,rehabilitation or installation of commercial or industrial buildings,
structures,and other real property equipment and improvements,including railroad spurs or similar extensions.Such
activities may be carried out by the recipient or public or private nonprofit subrecipients.
(b)The provision of assistance to a private for-profit business,including,but not limited to,grants,loans,loan
guarantees,interest supplements,technical assistance,and other forms of support,for any activity where the
assistance is appropriate to carry out an economic development project,excluding those described as ineligible in
§570.207(a). In selecting businesses to assist under this authority,the recipient shall minimize,to the extent
practicable,displacement of existing businesses and jobs in neighborhoods.
(c)Economic development services in connection with activities eligible under this section,including,but not limited
to,outreach efforts to market available forms of assistance;screening of applicants;reviewing and underwriting
applications for assistance;preparation of all necessary agreements;management of assisted activities;and the
screening,referral,and placement of applicants for employment opportunities generated by CDBG-eligible economic
development activities,including the costs of providing necessary training for persons filling those positions.
[53 FR 34439,Sept.6,1988,as amended at 60 FR 1944,Jan.5,1995;71 FR 30035,May 24,2006]
§570.204 Special activities by Community-Based Development Organizations(CBDOs).
(a)Eligible activities.The recipient may provide CDBG funds as grants or loans to any CBDO qualified under this
section to carry out a neighborhood revitalization,community economic development,or energy conservation project.
The funded project activities may include those listed as eligible under this subpart,and,except as described in
paragraph(b)of this section,activities not otherwise listed as eligible under this subpart.For purposes of qualifying
as a project under paragraphs(a)(1),(a)(2),and(a)(3)of this section,the funded activity or activities may be
considered either alone or in concert with other project activities either being carried out or for which funding has
been committed.For purposes of this section:
(1)Neighborhood revitalization project includes activities of sufficient size and scope to have an impact on the decline
of a geographic location within the jurisdiction of a unit of general local government(but not the entire jurisdiction)
designated in comprehensive plans,ordinances,or other local documents as a neighborhood,village,or similar
geographical designation;or the entire jurisdiction of a unit of general local government which is under 25,000
population;
(2)Community economic development project includes activities that increase economic opportunity,principally for
persons of low-and moderate-income,or that stimulate or retain businesses or permanent jobs,including projects
that include one or more such activities that are clearly needed to address a lack of affordable housing accessible to
existing or planned jobs and those activities specified at 24 CFR 91.1(a)(1)(iii);activities under this paragraph may
include costs associated with project-specific assessment or remediation of known or suspected environmental
contamination;
(3)Energy conservation project includes activities that address energy conservation,principally for the benefit of the
residents of the recipient's jurisdiction;and
(4)To carry out a project means that the CBDO undertakes the funded activities directly or through contract with an
entity other than the grantee,or through the provision of financial assistance for activities in which it retains a direct
and controlling involvement and responsibilities.
(b)Ineligible activities. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this
subpart,this section does not authorize:
(1)Carrying out an activity described as ineligible in§570.207(a);
(2)Carrying out public services that do not meet the requirements of§570.201(e),except that:
(i)Services carried out under this section that are specifically designed to increase economic opportunities through
job training and placement and other employment support services,including,but not limited to,peer support
programs,counseling,child care,transportation,and other similar services;and
(ii)Services of any type carried out under this section pursuant to a strategy approved by HUD under the provisions
of 24 CFR 91.215(e)shall not be subject to the limitations in§570.201(ex1)or(2),as applicable;
(3)Providing assistance to activities that would otherwise be eligible under§570.203 that do not meet the
requirements of§570.209;or
(4)Carrying out an activity that would otherwise be eligible under§570.205 or§570.206,but that would result in the
recipient's exceeding the spending limitation in§570.200(g).
(c)Eligible CBDOs.(1)A CBDO qualifying under this section is an organization which has the following
characteristics:
10
CDBG Regulations 24 CFR Part 570
Pages 11-156 will be furnished upon request
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
/ 1.
A
Tab z
"Eib•t D"
Participant Income
Eli 'bili Forrn
tY
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'a Floor-Augusta,Georgia 30901
ICI
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov
EXHIBIT "D"
PARTICIPANT INCOME ELIGIBILITY FORM
(Documentation of Income Must be Attached to this Form-See#8)
The information requested below is confidential. This information is used only to track financial
and social status under federal regulations as required for the funding of programs by the U.S.
Department of Housing and Urban Development (HUD) and administered by the Housing and
Community Development Department on behalf of the City of Augusta. Programs requiring this
information include the Community Development Block Grant Program, Emergency Shelter Grant
Program, HOME and Housing Opportunities for Persons With AIDS.
Client Name:
(If services are provided to the child,please put child's name above.)
Client Address:
Parent Name(If applicable):
Neighborhood: Phone#: (Work) Home
1. Number of persons in household:
2. Total annual income of ALL persons residing in household: $
(Show calculation: Monthly income$ x(12 or 26)=$ )
3. Race:
[ ] White [ ] Black/African American [ ] Black/African American&White
[ ] Asian [ ] Asian&White [ ] Am. Indian/Alaskan Native&Black/African Am.
[ ] Am.Indian/Alaskan Native [ ] Native Hawaiian/Other Pacific Islander
[ ] Am. Indian/Alaskan Native&White [ ] Other Multi-Racial
[ ] Hispanic(of the race identified,check this block if the person is of Hispanic origin
4. Sex: [ ] Male [ ] Female
5. Female Head of Household? [ ] Yes [ ] No
6. Client 62 or older? [ ] Yes [ ] No
7. Disabled? [ ] Yes [ ] No
8. Attach Income verification(s) [ ] Yes [ ] No
(Verification of Income MUST BE ATTACHED. Examples of income verifications include check stubs,W-2 form,SSI,TANF,
Social Security,etc.)
Client Signature Witness Date
FOR OFFICE USE ONLY:
(Circle number of persons in household and indicate income by circling column a, b,c or d horizontally.)
Year 2018 Income Limits
Family Size a. Extremely Low Income b. Low Income c. Low/Moderate Income d. Not LM
(persons) (0%-30%of Median) (31%-50%of Median) (51%-80%of Median)
1 $0- 13,100 $13,101 -21,850 $21,851 -34,900 $34,901+
2 $0-16,460 $16,461 -24,950 $24,951 -39,900 $39,901+
3 $0-20,780 $20,781 -28,050 $28,051 -44,900 $44,901+
4 $0-25,100 $25,101 -31,150 $31,151 -49,850 $49,851+
5 $0-29,420 $29,421 -33,650 $33,651 -53,850 $53,851+
6 $0-33,740 $33,741 -36,150 $36,151 -57,850 $57,851+
7 $0-38,060 $38,061 -38,650 $38,651 -61,850 $61,851+
8 $0-41,150 $0-$41,150 $41,151 -65,850 $65,851+
CDBG 2018
MEMORANDUM OF AGREEMENT
November 27, 2018
Seeds For Life Community Development Block Grant (CDBG) Program
This Memorandum of Understanding is for the purpose of establishing the
responsibilities and requirements to be assumed by(name of grant recipient)and the City
of Augusta' Housing and Community Development (HCD) Department in providing a
Business Development grant of$10,000 (ten thousand) dollars to awarded recipients of
the Seeds For Life Grant program.
PROJECT DESCRIPTION
The Seeds For Life Business Development Grant is intended to provide an established
business of twelve months or of more working capital in the amount of$10,000 to foster
both business growth and additional employee retainage or hiring of low-mod eligible
employees. There will be 1o(ten) $10,000 dollar grants awarded: four to "pilot program"
recipients, with the remaining chosen through a competitive panel and a voter selection
process. This grant is intended to give established businesses a monetary infusion to help
them grow and expand their workforce while using the funds for but not limited to: new
or upgraded equipment, increased inventory, employee training, marketing and
advertising activities, new or upgraded signage, working or operating capital to include
salaries of newly hired employees.
GRANT FUNDS
Funding for this Project has been approved by the Augusta-Richmond County
Commission and the U.S. Department of Housing and Urban Development (U.S. HUD)
in the amount of $100,000 as part of the funding established for the Small Business
Development Loan fund. Overall there will be ten grants of $10,000 made to ten
businesses that all must be located in Augusta-Richmond County.
PROJECT ACTIVITIES
Mr. Timothy Wilson for Magnolia Mortgage Company and HCD agree to jointly
administer the "Project" as follows:
Mr. Wilson shall:
1. Comply with the Community Development Block Grant regulations as set forth at
24 CFR Part 570. (attached)
2. Must retain or hire a minimum of one HUD eligible low-moderate employee full
or part-time (see Exhibit D for eligibility requirements attached) with continuing
service for a minimum of twelve months of employment upon receipt of the grant.
(Exhibit D attached)
' 1111111•111111
3. Magnolia Mortgage Company shall, within six months of receiving funds
from AHCD, provide any and all requested documentation to substantiate the
retaining or hiring of a new full or part-time employee providing background
information of that eligible employee with their hours and responsibilities required
for the business.
4. At the end of the one-year award term, recipient will provide AHCD any and all
information requested related to the use of the CDBG funds for the improvement
of the business and the status of all full and part-time employees involved in this
grant MOA.
5. In the event that Magnolia Mortgage Company is not able to retain or
hire a part or fulltime employee(s) or if for any reason, AHCD finds
reason that the recipient business misrepresented its intentions or the
use of the funds, HCD retains the right to rescind the grant and recall
the money to be repaid back to the City of Augusta.
6. Magnolia Mortgage Company is aware that they can receive only one awarded
grant over the entire course of the grant program and once they are awarded can
no longer apply in the future.
The City of Augusta's Housing and Community Development Department shall report to
the U.S. Department of Housing and Urban Development statistics on the number of
persons employed by Magnolia Mortgage Company.
In Witness Whereof, the parties have set their hands and seals as of the date first written
above.
Attest: Augusta, Georgia
By: Hardie Davis Date:
As Its Maw
By anice Allen Jackson Date: Low\ (o 1
sAdm.a's r. or
1
By:` - .wthorne Weer,Jr., Director Date: 12. 31 I L
__
Approv- as to Form bN t i! , /,u I Date: /2/Of
Andrew . acK-nzie
General Counsel
By: Timo y Wilson, Ma: • �.rtgage Company Date: f/‘ '2 I 1
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
01
Tab
CDBG Regulations
24 CFR Part 570
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'd Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov `T ``
§570.1 Purpose and primary objective.
(a)This part describes policies and procedures applicable to the following programs authorized under title I of the
Housing and Community Development Act of 1974,as amended:
(1)Entitlement grants program(subpart D);
(2)Nonentitlement Funds:HUD-administered Small Cities and Insular Area programs(subpart F);
(3)State program:State-administered CDBG nonentitlement funds(subpart I);
(4)Special Purpose Grants(subpart E);
(5)Urban Development Action Grant program(subpart G);and
(6)Loan Guarantees(subpart M).
(b)Subparts A,C,J, K,and 0 apply to all programs in paragraph(a)except as modified or limited under the
provisions of these subparts or the applicable program regulations. In the application of the subparts to Special
Purpose Grants or the Urban Development Action Grant program,the reference to funds in the form of grants in the
term `CDBG funds", as defined in§570.3,shall mean the grant funds under those programs.The subparts do not
apply to the State program(subpart I)except to the extent expressly referred to.
(c)The primary objective of the programs authorized under title I of the Housing and Community Development Act of
1974,as amended,is described in section 101(c)of the Act(42 U.S.C.5301(c)).
[53 FR 34437,Sept.6, 1988,as amended at 56 FR 56126,Oct.31, 1991;61 FR 11475,Mar.20, 1996;69 FR
32778,June 10,2004]
§570.3 Definitions.
The terms HUD and Secretary are defined in 24 CFR part 5.All of the following definitions in this section that rely on
data from the United States Bureau of the Census shall rely upon the data available from the latest decennial census.
Act means title I of the Housing and Community Development Act of 1974 as amended(42 U.S.C.5301 et seq. ).
Age of housing means the number of year-round housing units,as further defined in section 102(a)(11)of the Act.
Applicant means a State or unit of general local government that makes application pursuant to the provisions of
subpart E, F,G or M.
Buildings for the general conduct of government shall have the meaning provided in section 102(a)(21)of the Act.
CDBG funds means Community Development Block Grant funds,including funds received in the form of grants under
subpart D, F,or§570.405 of this part,funds awarded under section 108(q)of the Housing and Community
6
Development Act of 1974,loans guaranteed under subpart M of this part, urban renewal surplus grant funds,and
program income as defined in§570.500(a).
Chief executive officer of a State or unit of general local government means the elected official or the legally
designated official,who has the primary responsibility for the conduct of that entity's governmental affairs.Examples
of the`chief executive officer"of a unit of general local government are:the elected mayor of a municipality;the
elected county executive of a county;the chairperson of a county commission or board in a county that has no
elected county executive;and the official designated pursuant to law by the governing body of a unit of general local
government.
City means the following:
(1)For purposes of Entitlement Community Development lock Grant and Urban Development Action Grant
eligibility:
(i)Any unit of general local government that is classified as a municipality by the United States Bureau of the Census,
or
(ii)Any other unit of general local government that is a town or township and that,in the determination of the
Secretary:
(A)Possesses powers and performs functions comparable to those associated with municipalities;
(B)Is closely settled(except that the Secretary may reduce or waive this requirement on a case by case basis for the
purposes of the Action Grant program);and
(C)Contains within its boundaries no incorporated places as defined by the United States Bureau of the Census that
have not entered into cooperation agreements with the town or township for a period covering at least 3 years to
undertake or assist in the undertaking of essential community development and housing assistance activities.The
determination of eligibility of a town or township to qualify as a city will be based on information available from the
United States Bureau of the Census and information provided by the town or township and its included units of
general local government.
(2)For purposes of Urban Development Action Grant eligibility only,Guam,the Virgin Islands,American Samoa,the
Commonwealth of the Northern Mariana Islands,the counties of Kauai,Maui,and Hawaii in the State of Hawaii,and
Indian tribes that are eligible recipients under the State and Local Government Fiscal Assistance Act of 1972 and
located on reservations in Oklahoma as determined by the Secretary of the Interior or in Alaskan Native Villages.
Community Development Financial Institution has the same meaning as used in the Community Development
Banking and Financial Institutions Act of 1994(12 U.S.C.4701 note).
Consolidated plan.The plan prepared in accordance with 24 CFR part 91,which describes needs,resources,
priorities and proposed activities to be undertaken with respect to HUD programs,including the CDBG program.An
approved consolidated plan means a consolidated plan that has been approved by HUD in accordance with 24 CFR
part 91.
Discretionary grant means a grant made from the various Special Purpose Grants in accordance with subpart E of
this part.
1
Entitlement amount means the amount of funds which a metropolitan city is entitled to receive under the Entitlement
grant program,as determined by formula set forth in section 106 of the Act.
Extent of growth lag shall have the meaning provided in section 102(a)(12)of the Act.
Extent of housing overcrowding shall have the meaning provided in section 102(ax10)of the Act.
7
Extent of poverty means the number of persons whose incomes are below the poverty level based on data compiled
and published by the United States Bureau of the Census available from the latest census referable to the same point
or period in time and the latest reports from the Office of Management and Budget. For purposes of this part,the
Secretary has determined that it is neither feasible nor appropriate to make adjustments at this time in the
computations of"extent of poverty"for regional or area variations in income and cost of living.
Family means all persons living in the same household who are related by birth,marriage or adoption.
Household means all the persons who occupy a housing unit.The occupants may be a single family,one person
living alone,two or more families living together,or any other group of related or unrelated persons who share living
arrangements.
Income.For the purpose of determining whether a family or household is low-and moderate-income under subpart C
of this part,grantees may select any of the three definitions listed below for each activity,except that integrally related
activities of the same type and qualifying under the same paragraph of§570.208(a)shall use the same definition of
income.The option to choose a definition does not apply to activities that qualify under§570.208(a)(1)(Area benefit
activities),except when the recipient carries out a survey under§570.208(a)(1 Xvi).Activities qualifying under
§570.208(ax1)generally must use the area income data supplied to recipients by HUD.The three definitions are as
follows:
(1 Xi)"Annual income"as defined under the Section 8 Housing Assistance Payments program at 24 CFR 813.106
(except that if the CDBG assistance being provided is homeowner rehabilitation under§570.202,the value of the
homeowner's primary residence may be excluded from any calculation of Net Family Assets);or
(ii)Annual income as reported under the Census long-form for the most recent available decennial Census.This
definition includes:
(A)Wages,salaries,tips,commissions,etc.;
(B)Self-employment income from own nonfarm business,including proprietorships and partnerships;
(C)Farm self-employment income;
(D)Interest,dividends,net rental income,or income from estates or trusts;
(E)Social Security or railroad retirement;
(F)Supplemental Security Income,Aid to Families with Dependent Children,or other public assistance or public
welfare programs;
(G)Retirement,survivor,or disability pensions;and
(H)Any other sources of income received regularly,including Veterans'(VA)payments,unemployment
compensation,and alimony;or
(iii)Adjusted gross income as defined for purposes of reporting under Internal Revenue Service(IRS)Form 1040 for
individual Federal annual income tax purposes.
(2)Estimate the annual income of a family or household by projecting the prevailing rate of income of each person at
the time assistance is provided for the individual,family,or household(as applicable).Estimated annual income shall
include income from all family or household members,as applicable. Income or asset enhancement derived from the
CDBG-assisted activity shall not be considered in calculating estimated annual income.
Insular area shall have the meaning provided in section 102(a)(24)of the Act.
8
Low-and moderate-income household means a household having an income equal to or less than the Section 8
lowincome
limit established by HUD.
Low-and moderate-income person means a member of a family having an income equal to or less than the Section 8
low-income limit established by HUD.Unrelated individuals will be considered as one-person families for this
purpose.
Low-income household means a household having an income equal to or less than the Section 8 very low-income
limit established by HUD.
Low-income person means a member of a family that has an income equal to or less than the Section 8 very
lowincome
limit established by HUD. Unrelated individuals shall be considered as one-person families for this purpose.
Metropolitan area shall have the meaning provided in section 102(a)(3)of the Act.
Metropolitan city shall have the meaning provided in section 102(a)(4)of the Act except that the term"central city"is
replaced by"principal city."
Microenterprise shall have the meaning provided in section 102(ax22)of the Act.
Moderate-income household means a household having an income equal to or less than the Section 8 low-income
limit and greater than the Section 8 very low-income limit,established by HUD.
Moderate-income person means a member of a family that has an income equal to or less than the Section 8
lowincome
limit and greater than the Section 8 very low-income limit,established by HUD. Unrelated individuals shall be
2
considered as one-person families for this purpose.
Nonentitlement amount means the amount of funds which is allocated for use in a State's nonentitlement areas as
determined by formula set forth in section 106 of the Act.
Nonentitlement area shall have the meaning provided in section 102(a)(7)of the Act.
Population means the total resident population based on data compiled and published by the United States Bureau of
the Census available from the latest census or which has been upgraded by the Bureau to reflect the changes
resulting from the Boundary and Annexation Survey, new incorporations and consolidations of governments pursuant
to§570.4,and which reflects,where applicable,changes resulting from the Bureau's latest population determination
through its estimating technique using natural changes(birth and death)and net migration,and is referable to the
same point or period in time.
Small business means a business that meets the criteria set forth in section 3(a)of the Small Business Act(15 U.S.C.
631,636,637).
State shall have the meaning provided in section 102(ax2)of the Act.
Unit of general local government shall have the meaning provided in section 102(ax1)of the Act.
Urban county shall have the meaning provided in section 102(ax6)of the Act. For the purposes of this definition,
HUD will determine whether the county's combined population contains the required percentage of low-and
moderate-income persons by identifying the number of persons that resided in applicable areas and units of general
local government based on data from the most recent decennial census,and using income limits that would have
applied for the year in which that census was taken.
Urban Development Action Grant(UDAG)means a grant made by the Secretary pursuant to section 119 of the Act
and subpart G of this part.
9
[53 FR 34437,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 56 FR 56126,Oct.31, 1991;60 FR 1915,
1943,Jan.5, 1995;60 FR 56909,Nov.9, 1995;61 FR 5209,Feb.9, 1996;61 FR 11475,Mar.20, 1996;61 FR
18674,Apr.29, 1996;68 FR 69582, Dec. 12,2003;69 FR 32778,June 10,2004]
§570.4 Allocation of funds.
(a)The determination of eligibility of units of general local government to receive entitlement grants,the entitlement
amounts,the allocation of appropriated funds to States for use in nonentitlement areas,the reallocation of funds,the
allocation of appropriated funds to insular areas,and the allocation of appropriated funds for discretionary grants
under the Secretary's Fund shall be governed by the policies and procedures described in sections 106 and 107 of
the Act,as appropriate.
(b)The definitions in§570.3 shall govern in applying the policies and procedures described in sections 106 and 107
of the Act.
(c)In determining eligibility for entitlement and in allocating funds under section 106 of the Act for any federal fiscal
year,HUD will recognize corporate status and geographical boundaries and the status of metropolitan areas and
principal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1)With respect to corporate status as certified by the applicable State and available for processing by the Census
Bureau as of such date;
(2)With respect to boundary changes or annexations,as are used by the Census Bureau in preparing population
estimates for all general purpose governmental units and are available for processing by the Census Bureau as of
such date,except that any such boundary changes or annexations which result in the population of a unit of general
local govemment reaching or exceeding 50,000 shall be recognized for this purpose whether or not such chan9es are
used by the Census Bureau in preparing such population estimates;and
(3)With respect to the status of Metropolitan Statistical Areas and principal cities,as officially designated by the
Office of Management and Budget as of such date.
(d)In determining whether a county qualifies as an urban county,and in computing entitlement amounts for urban
counties,the demographic values of population,poverty,housing overcrowding,and age of housing of any Indian
tribes located within the county shall be excluded.In allocating amounts to States for use in nonentitlement areas,the
demographic values of population,poverty,housing overcrowding and age of housing of all Indian tribes located in all
nonentitled areas shall be excluded. It is recognized that all such data on Indian tribes are not generally available
from the United States Bureau of the Census and that missing portions of data will have to be estimated.In
accomplishing any such estimates the Secretary may use such other related information available from reputable
sources as may seem appropriate,regardless of the data's point or period of time and shall use the best judgement
possible in adjusting such data to reflect the same point or period of time as the overall data from which the Indian
tribes are being deducted,so that such deduction shall not create an imbalance with those overall data.
(e)Amounts remaining after closeout of a grant which are required to be returned to HUD under the provisions of
§570.509,Grant closeout procedures,shall be considered as funds available for reallocation unless the appropriation
under which the funds were provided to the Department has lapsed.
[53 FR 34437,Sept.6, 1988,as amended at 68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.5 Waivers.
HUD's authority for the waiver of regulations and for the suspension of requirements to address damage in a
Presidentially declared disaster area is described in 24 CFR part 5 and in section 122 of the Act, respectively.
[61 FR 11476, Mar.20, 1996]
Subpart B [Reserved]
3
10
Subpart C—Eligible Activities
Source: 53 FR 34439, Sept. 6, 1988, unless otherwise noted.
§570.200 General policies.
(a)Determination of eligibility.An activity may be assisted in whole or in part with CDBG funds only if all of the
following requirements are met:
(1)Compliance with section 105 of the Act. Each activity must meet the eligibility requirements of section 105 of the
Act as further defined in this subpart.
(2)Compliance with national objectives.Grant recipients under the Entitlement and HUD-administered Small Cities
programs and recipients of insular area funds under section 106 of the Act must certify that their projected use of
funds has been developed so as to give maximum feasible priority to activities which will carry out one of the national
objectives of benefit to low-and moderate-income families or aid in the prevention or elimination of slums or blight.
The projected use of funds may also include activities that the recipient certifies are designed to meet other
community development needs having a particular urgency because existing conditions pose a serious and
immediate threat to the health or welfare of the community where other financial resources are not available to meet
such needs.Consistent with the foregoing,each recipient under the Entitlement or HUD-administered Small Cities
programs,and each recipient of insular area funds under section 106 of the Act must ensure and maintain evidence
that each of its activities assisted with CDBG funds meets one of the three national objectives as contained in its
certification.Criteria for determining whether an activity addresses one or more of these objectives are found in
§570.208.
(3)Compliance with the primary objective.The primary objective of the Act is described in section 101(c)of the Act.
Consistent with this objective,entitlement recipients,non-entitlement CDBG grantees in Hawaii,and recipients of
insular area funds under section 106 of the Act must ensure that,over a period of time specified in their certification
not to exceed three years,not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities
meeting the criteria under§570.208(a)or under§570.208(dX5)or(6)for benefiting low-and moderate-income
persons.For grants under section 107 of the Act,insular area recipients must meet this requirement for each
separate grant.See§570.420(d)(3)for additional discussion of the primary objective requirement for insular areas
funded under section 106 of the Act.The requirements for the HUD-administered Small Cities program in New York
are at§570.420(d)(2).In determining the percentage of funds expended for such activities:
(i)Cost of administration and planning eligible under§570.205 and§570.206 will be assumed to benefit low and
moderate income persons in the same proportion as the remainder of the CDBG funds and,accordingly shall be
excluded from the calculation;
(ii)Funds deducted by HUD for repayment of urban renewal temporary loans pursuant to§570.802(b)shall be
excluded;
(iii)Funds expended for the repayment of loans guaranteed under the provisions of subpart M shall also be excluded;
(iv)Funds expended for the acquisition,new construction or rehabilitation of property for housing that qualifies under
§570.208(aX3)shall be counted for this purpose but shall be limited to an amount determined by multiplying the total
cost(including CDBG and non-CDBG costs)of the acquisition,construction or rehabilitation by the percent of units in
such housing to be occupied by low and moderate income persons.
(v)Funds expended for any other activities qualifying under§570.208(a)shall be counted for this purpose in their
entirety.
(4)Compliance with environmental review procedures.The environmental review procedures set forth at 24 CFR part
58 must be completed for each activity(or project as defined in 24 CFR part 58),as applicable.
(5)Cost principles. Costs incurred,whether charged on a direct or an indirect basis,must be in conformance with
OMB Circulars A-87,"Cost Principles for State,Local and Indian Tribal Governments";A-122,"Cost Principles for
11
Non-profit Organizations";or A-21,"Cost Principles for Educational Institutions,"as applicable.i All items of cost
listed in Attachment B of these Circulars that require prior Federal agency approval are allowable without prior
approval of HUD to the extent they comply with the general policies and principles stated in Attachment A of such
circulars and are otherwise eligible under this subpart C,except for the following:
These circulars are available from the American Communities Center by calling the following toll-free
numbers: (800)998-9999 or(800)483-2209(TDD).
(i)Depreciation methods for fixed assets shall not be changed without HUD's specific approval or,if charged through
a cost allocation plan,the Federal cognizant agency.
(ii)Fines and penalties(including punitive damages)are unallowable costs to the CDBG program.
(iii)Pre-award costs are limited to those authorized under paragraph(h)of this section.
(b)Special policies governing facilities.The following special policies apply to:
(1)Facilities containing both eligible and ineligible uses.A public facility otherwise eligible for assistance under the
CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible
uses,if:
(i)The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area
within the larger facility;and
(ii)The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct
from the overall costs of the multiple-use building and/or facility.
4
Allowable costs are limited to those attributable to the eligible portion of the building or facility.
(2)Fees for use of facilities. Reasonable fees may be charged for the use of the facilities assisted with CDBG funds,
but charges such as excessive membership fees,which will have the effect of precluding low and moderate income
persons from using the facilities,are not permitted.
(c)Special assessments under the CDBG program. The following policies relate to special assessments under the
CDBG program:
(1)Definition of special assessment.The term"special assessment"means the recovery of the capital costs of a
public improvement,such as streets,water or sewer lines,curbs,and gutters,through a fee or charge levied or filed
as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public
improvement,or a one-time charge made as a condition of access to a public improvement.This term does not relate
to taxes,or the establishment of the value of real estate for the purpose of levying real estate,property,or ad valorem
taxes,and does not include periodic charges based on the use of a public improvement,such as water or sewer user
charges,even if such charges include the recovery of all or some portion of the capital costs of the public
improvement.
(2)Special assessments to recover capital costs.Where CDBG funds are used to pay all or part of the cost of a
public improvement,special assessments may be imposed as follows:
(i)Special assessments to recover the CDBG funds may be made only against properties owned and occupied by
persons not of low and moderate income.Such assessments constitute program income.
(ii)Special assessments to recover the non-CDBG portion may be made provided that CDBG funds are used to pay
the special assessment in behalf of all properties owned and occupied by low and moderate income persons;except
that CDBG funds need not be used to pay the special assessments in behalf of properties owned and occupied by
moderate income persons if the grant recipient certifies that it does not have sufficient CDBG funds to pay the
assessments in behalf of all of the low and moderate income owner-occupant persons.Funds collected through such
special assessments are not program income.
12
(3)Public improvements not initially assisted with CDBG funds. The payment of special assessments with CDBG
funds constitutes CDBG assistance to the public improvement.Therefore,CDBG funds may be used to pay special
assessments provided:
(i)The installation of the public improvements was carried out in compliance with requirements applicable to activities
assisted under this part including environmental,citizen participation and Davis-Bacon requirements;
(ii)The installation of the public improvement meets a criterion for national objectives in§570.208(ax1),(b),or(c);
and
(iii)The requirements of§570.200(c)(2)(ii)are met.
(d)Consultant activities. Consulting services are eligible for assistance under this part for professional assistance in
program planning,development of community development objectives,and other general professional guidance
relating to program execution.The use of consultants is governed by the following:
(1)Employer-employee type of relationship. No person providing consultant services in an employer-employee type
of relationship shall receive more than a reasonable rate of compensation for personal services paid with CDBG
funds. In no event,however,shall such compensation exceed the equivalent of the daily rate paid for Level IV of the
Executive Schedule.Such services shall be evidenced by written agreements between the parties which detail the
responsibilities,standards,and compensation.
(2)Independent contractor relationship. Consultant services provided under an independent contractor relationship
are governed by the procurement requirements in 24 CFR 85.36,and are not subject to the compensation limitation
of Level IV of the Executive Schedule.
(e)Recipient determinations required as a condition of eligibility. In several instances under this subpart,the eligibility
of an activity depends on a special local determination. Recipients shall maintain documentation of all such
determinations.A written determination is required for any activity carried out under the authority of§§570.201(f),
570.201(i)(2),570.201(p),570.201(q),570.202(b)(3),570.206(f),570.209,570.210,and 570.309.
(f)Means of carrying out eligible activities.(1)Activities eligible under this subpart,other than those authorized under
§570.204(a), may be undertaken,subject to local law:
(i)By the recipient through:
(A)Its employees,or
(B)Procurement contracts governed by the requirements of 24 CFR 85.36;or
(ii)Through loans or grants under agreements with subrecipients,as defined at§570.500(c);or
(iii)By one or more public agencies,including existing local public agencies,that are designated by the chief
executive officer of the recipient.
(2)Activities made eligible under§570.204(a)may only be undertaken by entities specified in that section.
(g)Limitation on planning and administrative costs. No more than 20 percent of the sum of any grant,plus program
income,shall be expended for planning and program administrative costs,as defined in§§570.205 and 507.206,
respectively. Recipients of entitlement grants under subpart D of this part shall conform with this requirement by
limiting the amount of CDBG funds obligated for planning plus administration during each program year to an amount
no greater than 20 percent of the sum of its entitlement grant made for that program year(if any)plus the program
income received by the recipient and its subrecipients(if any)during that program year.
(h)Reimbursement for pre-award costs.The effective date of the grant agreement is the program year start date or
the date that the consolidated plan is received by HUD,whichever is later.For a Section 108 loan guarantee,the
5
13
effective date of the grant agreement is the date of HUD execution of the grant agreement amendment for the
particular loan guarantee commitment.
(1)Prior to the effective date of the grant agreement,a recipient may incur costs or may authorize a subrecipient to
incur costs,and then after the effective date of the grant agreement pay for those costs using its CDBG funds,
provided that:
(i)The activity for which the costs are being incurred is included,prior to the costs being incurred,in a consolidated
plan action plan,an amended consolidated plan action plan,or an application under subpart M of this part,except
that a new entitlement grantee preparing to receive its first allocation of CDBG funds may incur costs necessary to
develop its consolidated plan and undertake other administrative actions necessary to receive its first grant,prior to
the costs being included in its consolidated plan;
(ii)Citizens are advised of the extent to which these pre-award costs will affect future grants;
(iii)The costs and activities funded are in compliance with the requirements of this part and with the Environmental
Review Procedures stated in 24 CFR part 58;
(iv)The activity for which payment is being made complies with the statutory and regulatory provisions in effect at the
time the costs are paid for with CDBG funds;
(v)CDBG payment will be made during a time no longer than the next two program years following the effective date
of the grant agreement or amendment in which the activity is first included;and
(vi)The total amount of pre-award costs to be paid during any program year pursuant to this provision is no more
than the greater of 25 percent of the amount of the grant made for that year or$300,000.
(2)Upon the written request of the recipient,HUD may authorize payment of pre-award costs for activities that do not
meet the criteria at paragraph(hx1 Xv)or(h)(1 Xvi)of this section,if HUD determines,in writing,that there is good
cause for granting an exception upon consideration of the following factors,as applicable:
(i)Whether granting the authority would result in a significant contribution to the goals and purposes of the CDBG
program;
(ii)Whether failure to grant the authority would result in undue hardship to the recipient or beneficiaries of the activity;
(iii)Whether granting the authority would not result in a violation of a statutory provision or any other regulatory
provision;
(iv)Whether circumstances are clearly beyond the recipient's control;or
(v)Any other relevant considerations.
(i)Urban Development Action Grant. Grant assistance may be provided with Urban Development Action Grant funds,
subject to the provisions of subpart G,for:
(1)Activities eligible for assistance under this subpart;and
(2)Notwithstanding the provisions of§570.207,such other activities as the Secretary may determine to be consistent
with the purposes of the Urban Development Action Grant program.
(j)Faith-based activities.(1)Organizations that are religious or faith-based are eligible,on the same basis as any
other organization,to participate in the CDBG program. Neither the Federal government nor a State or local
government receiving funds under CDBG programs shall discriminate against an organization on the basis of the
organization's religious character or affiliation.
2)Organizations that are directly funded under the CDBG program may not engage in inherently religious activities,
such as worship,religious instruction,or proselytization,as part of the programs or services funded under this part. If
an organization conducts such activities,the activities must be offered separately,in time or location,from the
programs or services funded under this part,and participation must be voluntary for the beneficiaries of the
HUDfunded
programs or services.
(3)A religious organization that participates in the CDBG program will retain its independence from Federal,State,
and local governments,and may continue to carry out its mission,including the definition,practice,and expression of
its religious beliefs,provided that it does not use direct CDBG funds to support any inherently religious activities,such
as worship,religious instruction,or proselytization.Among other things,faith-based organizations may use space in
their facilities to provide CDBG-funded services,without removing religious art,icons,scriptures,or other religious
symbols. In addition,a CDBG-funded religious organization retains its authority over its internal govemance,and it
may retain religious terms in its organization's name,select its board members on a religious basis,and include
religious references in its organization's mission statements and other governing documents.
(4)An organization that participates in the CDBG program shall not,in providing program assistance,discriminate
against a program beneficiary or prospective program beneficiary on the basis of religion or religious belief.
(5)CDBG funds may not be used for the acquisition,construction,or rehabilitation of structures to the extent that
those structures are used for inherently religious activities.CDBG funds may be used for the acquisition,construction,
or rehabilitation of structures only to the extent that those structures are used for conducting eligible activities under
this part.Where a structure is used for both eligible and inherently religious activities,CDBG funds may not exceed
the cost of those portions of the acquisition,construction,or rehabilitation that are attributable to eligible activities in
accordance with the cost accounting requirements applicable to CDBG funds in this part.Sanctuaries,chapels,or
other rooms that a CDBG-funded religious congregation uses as its principal place of worship,however,are ineligible
for CDBG-funded improvements.Disposition of real property after the term of the grant,or any change in use of the
property during the term of the grant,is subject to government-wide regulations governing real property disposition
6
see 24 CFR parts 84 and 85).
(6)If a State or local government voluntarily contributes its own funds to supplement federally funded activities,the
State or local government has the option to segregate the Federal funds or commingle them. However,if the funds
are commingled,this section applies to all of the commingled funds.
[53 FR 34439,Sept.6, 1988,as amended at 54 FR 47031,Nov.8, 1989;57 FR 27119,June 17, 1992;60 FR 1943,
Jan.5, 1995;60 FR 17445,Apr.6, 1995;60 FR 56910, Nov.9, 1995;61 FR 11476,Mar.20, 1996;61 FR 18674,
Apr.29, 1996;65 FR 70215,Nov.21,2000;68 FR 56404,Sept.30,2003;69 FR 32778,June 10,2004;70 FR
76369, Dec.23,2005;72 FR 46370,Aug. 17,2007]
§570.201 Basic eligible activities.
CDBG funds may be used for the following activities:
(a)Acquisition.Acquisition in whole or in part by the recipient,or other public or private nonprofit entity,by purchase,
long-term lease,donation,or otherwise,of real property(including air rights,water rights,rights-of-way,easements,
and other interests therein)for any public purpose,subject to the limitations of§570.207.
(b)Disposition. Disposition,through sale, lease,donation,or otherwise,of any real property acquired with CDBG
funds or its retention for public purposes, including reasonable costs of temporarily managing such property or
property acquired under urban renewal,provided that the proceeds from any such disposition shall be program
income subject to the requirements set forth in§570.504.
(c)Public facilities and improvements.Acquisition,construction, reconstruction,rehabilitation or installation of public
facilities and improvements,except as provided in§570.207(a),carried out by the recipient or other public or private
nonprofit entities.(However,activities under this paragraph may be directed to the removal of material and
architectural barriers that restrict the mobility and accessibility of elderly or severely disabled persons to public
facilities and improvements,including those provided for in§570.207(a)(1).)In undertaking such activities,design
features and improvements which promote energy efficiency may be included.Such activities may also include the
execution of architectural design features,and similar treatments intended to enhance the aesthetic quality of
15
facilities and improvements receiving CDBG assistance,such as decorative pavements,railings,sculptures, pools of
water and fountains,and other works of art. Facilities designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the prohibition of new housing construction described in
§570.207(bX3).Such facilities include shelters for the homeless;convalescent homes;hospitals,nursing homes;
battered spouse shelters;halfway houses for run-away children,drug offenders or parolees;group homes for
mentally retarded persons and temporary housing for disaster victims. In certain cases,nonprofit entities and
subrecipients including those specified in§570.204 may acquire title to public facilities.When such facilities are
owned by nonprofit entities or subrecipients,they shall be operated so as to be open for use by the general public
during all normal hours of operation. Public facilities and improvements eligible for assistance under this paragraph
are subject to the policies in§570.200(b).
(d)Clearance and remediation activities. Clearance,demolition,and removal of buildings and improvements,
including movement of structures to other sites and remediation of known or suspected environmental contamination.
Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.
Remediation may include project-specific environmental assessment costs not otherwise eligible under§570.205.
(e)Public services. Provision of public services(including labor,supplies,and materials)including but not limited to
those concerned with employment,crime prevention,child care, health,drug abuse,education,fair housing
counseling,energy conservation,welfare(but excluding the provision of income payments identified under
§570.207(b)(4)),homebuyer downpayment assistance,or recreational needs.To be eligible for CDBG assistance,a
public service must be either a new service or a quantifiable increase in the level of an existing service above that
which has been provided by or on behalf of the unit of general local government(through funds raised by the unit or
received by the unit from the State in which it is located)in the 12 calendar months before the submission of the
action plan.(An exception to this requirement may be made if HUD determines that any decrease in the level of a
service was the result of events not within the control of the unit of general local government.)The amount of CDBG
funds used for public services shall not exceed paragraphs(e)(1)or(2)of this section,as applicable:
(1)The amount of CDBG funds used for public services shall not exceed 15 percent of each grant,except that for
entitlement grants made under subpart D of this part,the amount shall not exceed 15 percent of the grant plus 15
percent of program income,as defined in§570.500(a). For entitlement grants under subpart D of this part,
compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program
year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of
the program income received during the grantee's immediately preceding program year.
(2)A recipient which obligated more CDBG funds for public services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law
98-8),may obligate more CDBG funds than allowable under paragraph(e)(1)of this section,so long as the total
amount obligated in any program year does not exceed:
(i)For an entitlement grantee,15%of the program income it received during the preceding program year;plus
(ii)A portion of the grant received for the program year which is the highest of the following amounts:
(A)The amount determined by applying the percentage of the grant it obligated for public services in the 1982
program year against the grant for its current program year;
(B)The amount determined by applying the percentage of the grant it obligated for public services in the 1983
program year against the grant for its current program year;
7
(C)The amount of funds it obligated for public services in the 1982 program year;or,
(D)The amount of funds it obligated for public services in the 1983 program year.
(f)Interim assistance. (1)The following activities may be undertaken on an interim basis in areas exhibiting
objectively determinable signs of physical deterioration where the recipient has determined that immediate action is
necessary to arrest the deterioration and that permanent improvements will be carried out as soon as practicable:
(i)The repairing of streets,sidewalks,parks,playgrounds,publicly owned utilities,and public buildings;and
16
(ii)The execution of special garbage,trash,and debris removal,including neighborhood cleanup campaigns,but not
the regular curbside collection of garbage or trash in an area.
(2)In order to alleviate emergency conditions threatening the public health and safety in areas where the chief
executive officer of the recipient determines that such an emergency condition exists and requires immediate
resolution,CDBG funds may be used for.
(i)The activities specified in paragraph(f)(1)of this section,except for the repair of parks and playgrounds;
(ii)The clearance of streets,including snow removal and similar activities,and
(iii)The improvement of private properties.
(3)All activities authorized under paragraph(f)(2)of this section are limited to the extent necessary to alleviate
emergency conditions.
(g)Payment of non-Federal share. Payment of the non-Federal share required in connection with a Federal grant-
inaid
program undertaken as part of CDBG activities,provided,that such payment shall be limited to activities
otherwise eligible and in compliance with applicable requirements under this subpart.
(h)Urban renewal completion. Payment of the cost of completing an urban renewal project funded under title I of the
Housing Act of 1949 as amended.Further information regarding the eligibility of such costs is set forth in§570.801.
(i)Relocation. Relocation payments and other assistance for permanently and temporarily relocated individuals
families,businesses,nonprofit organizations,and farm operations where the assistance is(1)required under the
provisions of§570.606(b)or(c);or(2)determined by the grantee to be appropriate under the provisions of
§570.606(d).
(j)Loss of rental income. Payments to housing owners for losses of rental income incurred in holding,for temporary
periods,housing units to be used for the relocation of individuals and families displaced by program activities assisted
under this part.
(k)Housing services. Housing services,as provided in section 105(a)(21)of the Act(42 U.S.C.5305(a)(21)).
(I)Privately owned utilities. CDBG funds may be used to acquire,construct,reconstruct,rehabilitate,or install the
distribution lines and facilities of privately owned utilities,including the placing underground of new or existing
distribution facilities and lines.
(m)Construction of housing. CDBG funds may be used for the construction of housing assisted under section 17 of
the United States Housing Act of 1937.
(n)Homeownership assistance. CDBG funds may be used to provide direct homeownership assistance to low-or
moderate-income households in accordance with section 105(a)of the Act.
(o)(1)The provision of assistance either through the recipient directly or through public and private organizations,
agencies,and other subrecipients(including nonprofit and for-profit subrecipients)to facilitate economic development
by:
(i)Providing credit,including,but not limited to,grants,loans,loan guarantees,and other forms of financial support,
for the establishment,stabilization,and expansion of microenterprises;
(ii)Providing technical assistance,advice,and business support services to owners of microenterprises and persons
developing microenterprises;and
(iii)Providing general support,including,but not limited to,peer support programs,counseling,child care,
transportation,and other similar services,to owners of microenterprises and persons developing microenterprises.
17
(2)Services provided this paragraph(o)shall not be subject to the restrictions on public services contained in
paragraph(e)of this section.
(3)For purposes of this paragraph(o),"persons developing microenterprises"means such persons who have
expressed interest and who are,or after an initial screening process are expected to be,actively working toward
developing businesses,each of which is expected to be a microenterprise at the time it is formed.
(4)Assistance under this paragraph(o)may also include training,technical assistance,or other support services to
increase the capacity of the recipient or subrecipient to carry out the activities under this paragraph(o).
(p) Technical assistance. Provision of technical assistance to public or nonprofit entities to increase the capacity of
such entities to carry out eligible neighborhood revitalization or economic development activities.(The recipient must
determine,prior to the provision of the assistance,that the activity for which it is attempting to build capacity would be
eligible for assistance under this subpart C,and that the national objective claimed by the grantee for this assistance
can reasonably be expected to be met once the entity has received the technical assistance and undertakes the
activity.)Capacity building for private or public entities(including grantees)for other purposes may be eligible under
§570.205.
(q)Assistance to institutions of higher education. Provision of assistance by the recipient to institutions of higher
education when the grantee determines that such an institution has demonstrated a capacity to carry out eligible
8
activities under this subpart C.
[53 FR 34439,Sept.6, 1988,as amended at 53 FR 31239,Aug. 17, 1988;55 FR 29308,July 18, 1990;57 FR
27119,June 17, 1992;60 FR 1943,Jan.5, 1995;60 FR 56911, Nov.9, 1995;61 FR 18674,Apr.29, 1996;65 FR
70215, Nov.21,2000;67 FR 47213,July 17,2002;71 FR 30034,May 24,2006]
§570.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation assistance. CDBG funds may be used to finance
the rehabilitation of:
(1)Privately owned buildings and improvements for residential purposes;improvements to a single-family residential
property which is also used as a place of business,which are required in order to operate the business,need not be
considered to be rehabilitation of a commercial or industrial building,if the improvements also provide general benefit
to the residential occupants of the building;
(2)Low-income public housing and other publicly owned residential buildings and improvements;
(3)Publicly or privately owned commercial or industrial buildings,except that the rehabilitation of such buildings
owned by a private for-profit business is limited to improvement to the exterior of the building,abatement of asbestos
hazards,lead-based paint hazard evaluation and reduction,and the correction of code violations;
(4)Nonprofit-owned nonresidential buildings and improvements not eligible under§570.201(c);and
(5)Manufactured housing when such housing constitutes part of the community's permanent housing stock.
(b) Types of assistance. CDBG funds may be used to finance the following types of rehabilitation activities,and
related costs,either singly,or in combination,through the use of grants,loans, loan guarantees,interest
supplements,or other means for buildings and improvements described in paragraph(a)of this section,except that
rehabilitation of commercial or industrial buildings is limited as described in paragraph(aX3)of this section.
(1)Assistance to private individuals and entities,including profit making and nonprofit organizations,to acquire for the
purpose of rehabilitation,and to rehabilitate properties,for use or resale for residential purposes;
(2)Labor,materials,and other costs of rehabilitation of properties,including repair directed toward an accumulation
of deferred maintenance,replacement of principal fixtures and components of existing structures,installation of
security devices,including smoke detectors and dead bolt locks,and renovation through alterations,additions to,or
18
enhancement of existing structures and improvements,abatement of asbestos hazards(and other contaminants)in
buildings and improvements that may be undertaken singly,or in combination;
(3)Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such
financing is determined by the recipient to be necessary or appropriate to achieve the locality's community
development objectives;
(4)Improvements to increase the efficient use of energy in structures through such means as installation of storm
windows and doors,siding,wall and attic insulation,and conversion,modification,or replacement of heating and
cooling equipment,including the use of solar energy equipment;
(5)Improvements to increase the efficient use of water through such means as water savings faucets and shower
heads and repair of water leaks;
(6)Connection of residential structures to water distribution lines or local sewer collection lines;
(7)For rehabilitation carried out with CDBG funds,costs of:
(i)Initial homeowner warranty premiums;
(ii)Hazard insurance premiums,except where assistance is provided in the form of a grant;and
(iii)Flood insurance premiums for properties covered by the Flood Disaster Protection Act of 1973,pursuant to
§570.605.
(8)Costs of acquiring tools to be lent to owners,tenants,and others who will use such tools to carry out rehabilitation;
(9)Rehabilitation services,such as rehabilitation counseling,energy auditing,preparation of work specifications,loan
processing,inspections,and other services related to assisting owners,tenants,contractors,and other entities,
participating or seeking to participate in rehabilitation activities authorized under this section,under section 312 of the
Housing Act of 1964,as amended, under section 810 of the Act,or under section 17 of the United States Housing Act
of 1937;
(10)Assistance for the rehabilitation of housing under section 17 of the United States Housing Act of 1937;and
(11)Improvements designed to remove material and architectural barriers that restrict the mobility and accessibility of
elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph(a)of this
section.
(c)Code enforcement. Costs incurred for inspection for code violations and enforcement of codes(e.g.,salaries and
related expenses of code enforcement inspectors and legal proceedings,but not including the cost of correcting the
violations)in deteriorating or deteriorated areas when such enforcement together with public or private
improvements,rehabilitation,or services to be provided may be expected to arrest the decline of the area.
(d)Historic preservation. CDBG funds may be used for the rehabilitation,preservation or restoration of historic
properties,whether publicly or privately owned.Historic properties are those sites or structures that are either listed in
or eligible to be listed in the National Register of Historic Places,listed in a State or local inventory of historic places,
or designated as a State or local landmark or historic district by appropriate law or ordinance. Historic preservation,
however,is not authorized for buildings for the general conduct of government.
(e)Renovation of closed buildings. CDBG funds may be used to renovate closed buildings,such as closed school
buildings,for use as an eligible public facility or to rehabilitate such buildings for housing.
(f)Lead-based paint activities.Lead-based paint activities pursuant to§570.608.
9
[53 FR 34439,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 60 FR 1944,Jan.5, 1995;60 FR 56911,
Nov.9, 1995;64 FR 50225,Sept. 15, 1999;71 FR 30035,May 24,2006]
§570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development activities in addition to other activities authorized
in this subpart that may be carried out as part of an economic development project.Guidelines for selecting activities
to assist under this paragraph are provided at§570.209.The recipient must ensure that the appropriate level of public
benefit will be derived pursuant to those guidelines before obligating funds under this authority.Special activities
authorized under this section do not include assistance for the construction of new housing.Activities eligible under
this section may include costs associated with project-specific assessment or remediation of known or suspected
environmental contamination.Special economic development activities include:
(a)The acquisition,construction,reconstruction,rehabilitation or installation of commercial or industrial buildings,
structures,and other real property equipment and improvements,including railroad spurs or similar extensions.Such
activities may be carried out by the recipient or public or private nonprofit subrecipients.
(b)The provision of assistance to a private for-profit business,including,but not limited to,grants,loans,loan
guarantees,interest supplements,technical assistance,and other forms of support,for any activity where the
assistance is appropriate to carry out an economic development project,excluding those described as ineligible in
§570.207(a). In selecting businesses to assist under this authority,the recipient shall minimize,to the extent
practicable,displacement of existing businesses and jobs in neighborhoods.
(c)Economic development services in connection with activities eligible under this section,including,but not limited
to,outreach efforts to market available forms of assistance;screening of applicants;reviewing and underwriting
applications for assistance;preparation of all necessary agreements;management of assisted activities;and the
screening,referral,and placement of applicants for employment opportunities generated by CDBG-eligible economic
development activities,including the costs of providing necessary training for persons filling those positions.
[53 FR 34439,Sept.6, 1988,as amended at 60 FR 1944,Jan.5, 1995;71 FR 30035,May 24,2006]
§570.204 Special activities by Community-Based Development Organizations(CBDOs).
(a)Eligible activities.The recipient may provide CDBG funds as grants or loans to any CBDO qualified under this
section to carry out a neighborhood revitalization,community economic development,or energy conservation project.
The funded project activities may include those listed as eligible under this subpart,and,except as described in
paragraph(b)of this section,activities not otherwise listed as eligible under this subpart.For purposes of qualifying
as a project under paragraphs(a)(1),(a)(2),and(a)(3)of this section,the funded activity or activities may be
considered either alone or in concert with other project activities either being carried out or for which funding has
been committed.For purposes of this section:
(1)Neighborhood revitalization project includes activities of sufficient size and scope to have an impact on the decline
of a geographic location within the jurisdiction of a unit of general local government(but not the entire jurisdiction)
designated in comprehensive plans,ordinances,or other local documents as a neighborhood,village,or similar
geographical designation;or the entire jurisdiction of a unit of general local government which is under 25,000
population;
(2)Community economic development project includes activities that increase economic opportunity, principally for
persons of low-and moderate-income,or that stimulate or retain businesses or permanent jobs,including projects
that include one or more such activities that are clearly needed to address a lack of affordable housing accessible to
existing or planned jobs and those activities specified at 24 CFR 91.1(a)(1)(iii);activities under this paragraph may
include costs associated with project-specific assessment or remediation of known or suspected environmental '
contamination;
(3)Energy conservation project includes activities that address energy conservation,principally for the benefit of the
residents of the recipient's jurisdiction;and
(4)To carry out a project means that the CBDO undertakes the funded activities directly or through contract with an
entity other than the grantee,or through the provision of financial assistance for activities in which it retains a direct
and controlling involvement and responsibilities.
(b)Ineligible activities. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this
subpart,this section does not authorize:
(1)Carrying out an activity described as ineligible in§570.207(a);
(2)Carrying out public services that do not meet the requirements of§570.201(e),except that:
(i)Services carried out under this section that are specifically designed to increase economic opportunities through
job training and placement and other employment support services,including, but not limited to,peer support
programs,counseling,child care,transportation,and other similar services;and
(ii)Services of any type carried out under this section pursuant to a strategy approved by HUD under the provisions
of 24 CFR 91.215(e)shall not be subject to the limitations in§570.201(ex1)or(2),as applicable;
(3)Providing assistance to activities that would otherwise be eligible under§570.203 that do not meet the
requirements of§570.209;or
(4)Carrying out an activity that would otherwise be eligible under§570.205 or§570.206,but that would result in the
recipient's exceeding the spending limitation in§570.200(g).
(c)Eligible CBDOs.(1)A CBDO qualifying under this section is an organization which has the following
characteristics:
10
CDBG Regulations 24 CFR Part 570
Pages 11-156 will be furnished upon request
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
' .64140111100.-
Tab 2
"Exhibit D"
Participant Income
Eli: 'bility
Forrn
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'4 Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783lini
www.augustaga.gov T:;'*
MI\ _
EXHIBIT "D"
PARTICIPANT INCOME ELIGIBILITY FORM
(Documentation of Income Must be Attached to this Form-See#8)
The information requested below is confidential. This information is used only to track financial
and social status under federal regulations as required for the funding of programs by the U.S.
Department of Housing and Urban Development (HUD) and administered by the Housing and
Community Development Department on behalf of the City of Augusta. Programs requiring this
information include the Community Development Block Grant Program, Emergency Shelter Grant
Program, HOME and Housing Opportunities for Persons With AIDS.
Client Name:
(If services are provided to the child,please put child's name above.)
Client Address:
Parent Name(If applicable):
Neighborhood: Phone#: (Work) Home
1. Number of persons in household:
2. Total annual income of ALL persons residing in household: $
(Show calculation: Monthly income$ x(12 or 26)_$ )
3. Race:
[ ] White [ ] Black/African American [ ] Black/African American&White
[ ] Asian [ ] Asian&White [ ] Am.Indian/Alaskan Native&Black/African Am.
[ ] Am. Indian/Alaskan Native [ ] Native Hawaiian/Other Pacific Islander
[ ] Am.Indian/Alaskan Native&White [ ] Other Multi-Racial
[ ] Hispanic(of the race identified,check this block if the person is of Hispanic origin
4. Sex: [ ] Male [ ] Female
5. Female Head of Household? [ ] Yes [ ] No
6. Client 62 or older? [ ] Yes [ ] No
7. Disabled? [ ] Yes [ ] No
8. Attach Income verification(s) [ ] Yes [ ] No
(Verification of Income MUST BE ATTACHED. Examples of income verifications include check stubs,W-2 form,SSI, TANF,
Social Security,etc.)
Client Signature Witness Date
FOR OFFICE USE ONLY:
(Circle number of persons in household and indicate income by circling column a, b,c or d horizontally.)
Year 2018 Income Limits
Family Size a. Extremely Low Income b. Low Income c. Low/Moderate Income d. Not LM
(persons) (0%-30%of Median) (31%-50%of Median) (51%-80%-
80/of Median)
1 $0- 13,100 $13,101 -21,850 $21,851 -34,900 $34,901+
2 $0- 16,460 $16,461 -24,950 $24,951 -39,900 $39,901+
3 $0-20,780 $20,781 -28,050 $28,051 -44,900 $44,901+
4 $0-25,100 $25,101 -31,150 $31,151 -49,850 $49,851+
5 $0-29,420 $29,421 -33,650 $33,651 -53,850 $53,851+
6 $0-33,740 $33,741 -36,150 $36,151 -57,850 $57,851+
7 $0-38,060 _ $38,061 -38,650 $38,651 -61,850 $61,851+
8 $0-41,150 $0-$41,150 $41,151 -65,850 $65,851+
CDBG 2018
MEMORANDUM OF AGREEMENT
November 27, 2018
Seeds For Life Community Development Block Grant (CDBG) Program
This Memorandum of Understanding is for the purpose of establishing the
responsibilities and requirements to be assumed by(name of grant recipient)and the City
of Augusta' Housing and Community Development (HCD) Department in providing a
Business Development grant of$10,000 (ten thousand) dollars to awarded recipients of
the Seeds For Life Grant program.
PROJECT DESCRIPTION
The Seeds For Life Business Development Grant is intended to provide an established
business of twelve months or of more working capital in the amount of$10,000 to foster
both business growth and additional employee retainage or hiring of low-mod eligible
employees. There will be 1o(ten) $10,000 dollar grants awarded: four to "pilot program"
recipients, with the remaining chosen through a competitive panel and a voter selection
process. This grant is intended to give established businesses a monetary infusion to help
them grow and expand their workforce while using the funds for but not limited to: new
or upgraded equipment, increased inventory, employee training, marketing and
advertising activities, new or upgraded signage, working or operating capital to include
salaries of newly hired employees.
GRANT FUNDS
Funding for this Project has been approved by the Augusta-Richmond County
Commission and the U.S. Department of Housing and Urban Development (U.S. HUD)
in the amount of $100,000 as part of the funding established for the Small Business
Development Loan fund. Overall there will be ten grants of $10,000 made to ten
businesses that all must be located in Augusta-Richmond County.
PROJECT ACTIVITIES
Mr. Christopher Wright for Grindhouse Training Studios, LLC and HCD agree
to jointly administer the "Project" as follows:
Mr. Wright shall:
1. Comply with the Community Development Block Grant regulations as set forth at
24 CFR Part 570. (attached)
2. Must retain or hire a minimum of one HUD eligible low-moderate employee full
or part-time (see Exhibit D for eligibility requirements attached) with continuing
service for a minimum of twelve months of employment upon receipt of the grant.
(Exhibit D attached)
I
1
3. Grindhouse Training Studios shall,within six months of receiving funds from
AHCD, provide any and all requested documentation to substantiate the retaining
or hiring of a new full or part-time employee providing background information of
that eligible employee with their hours and responsibilities required for the
business.
4. At the end of the one-year award term, recipient will provide AHCD any and all
information requested related to the use of the CDBG funds for the improvement
of the business and the status of all full and part-time employees involved in this
grant MOA.
5. In the event that Grindhouse Training Studios is not able to retain or
hire a part or fulltime employee(s) or if for any reason, AHCD finds
reason that the recipient business misrepresented its intentions or the
use of the funds, HCD retains the right to rescind the grant and recall
the money to be repaid back to the City of Augusta.
6. Grindhouse Training Studios is aware that they can receive only one awarded
grant over the entire course of the grant program and once they are awarded can
no longer apply in the future.
The City of Augusta's Housing and Community Development Department shall report to
the U.S. Department of Housing and Urban Development statistics on the number of
persons employed by Grindhouse Training Studios.
In Witness Whereof,the parties have set their hands and seals as of the date first written
above.
Attest: Augusta, Georgia
By: Hardie Davis Date:
As Its Mayor liejlp
By: Janice Allen Jacks• • Date: \ °� \( cs I 1 q
• Its Adm i i a A°
I
:'i : wthorne Welc Jr., Director Date: I 4 3 Ikee
�S
Appro : as to Form by 4 Date: /2,/Il//f
Andrew G. Mac nzie
General Counsel
By: Chri opher Wrigh rindhouse Training Studios Date: //' c9..-7'-/t
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
ti ,
v 0,-,n A
/ —.4111111111000w-
Tab 1
CDBG Regal.
ations
24 CFR Part 570
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3rd Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783in
www.augustaga.gov `:';<
Mk.
,
§570.1 Purpose and primary objective.
(a)This part describes policies and procedures applicable to the following programs authorized under title I of the
Housing and Community Development Act of 1974,as amended:
(1)Entitlement grants program(subpart D);
(2)Nonentitlement Funds:HUD-administered Small Cities and Insular Area programs(subpart F);
(3)State program:State-administered CDBG nonentitlement funds(subpart I);
(4)Special Purpose Grants(subpart E);
(5)Urban Development Action Grant program(subpart G);and
(6)Loan Guarantees(subpart M).
(b)Subparts A,C,J, K,and 0 apply to all programs in paragraph(a)except as modified or limited under the
provisions of these subparts or the applicable program regulations. In the application of the subparts to Special
Purpose Grants or the Urban Development Action Grant program,the reference to funds in the form of grants in the
term "CDBG funds", as defined in§570.3,shall mean the grant funds under those programs.The subparts do not
apply to the State program(subpart I)except to the extent expressly referred to.
(c)The primary objective of the programs authorized under title I of the Housing and Community Development Act of
1974,as amended,is described in section 101(c)of the Act(42 U.S.C.5301(c)).
[53 FR 34437,Sept.6, 1988,as amended at 56 FR 56126,Oct.31, 1991;61 FR 11475,Mar.20, 1996;69 FR
32778,June 10,2004]
§570.3 Definitions.
The terms HUD and Secretary are defined in 24 CFR part 5.All of the following definitions in this section that rely on
data from the United States Bureau of the Census shall rely upon the data available from the latest decennial census.
Act means title I of the Housing and Community Development Act of 1974 as amended(42 U.S.C.5301 et seq. ).
Age of housing means the number of year-round housing units,as further defined in section 102(a)(11)of the Act.
Applicant means a State or unit of general local government that makes application pursuant to the provisions of
subpart E, F,G or M.
Buildings for the general conduct of government shall have the meaning provided in section 102(ax21)of the Act.
CDBG funds means Community Development Block Grant funds,including funds received in the form of grants under
subpart D, F,or§570.405 of this part,funds awarded under section 108(q)of the Housing and Community
6
Development Act of 1974,loans guaranteed under subpart M of this part, urban renewal surplus grant funds,and
program income as defined in§570.500(a).
Chief executive officer of a State or unit of general local government means the elected official or the legally
designated official,who has the primary responsibility for the conduct of that entity's governmental affairs. Examples
of the"chief executive officer"of a unit of general local government are:the elected mayor of a municipality;the
elected county executive of a county;the chairperson of a county commission or board in a county that has no
elected county executive;and the official designated pursuant to law by the governing body of a unit of general local
government.
City means the following:
(1)For purposes of Entitlement Community Development Block Grant and Urban Development Action Grant
eligibility:
(i)Any unit of general local government that is classified as a municipality by the United States Bureau of the Census,
or
(ii)Any other unit of general local government that is a town or township and that,in the determination of the
Secretary:
(A)Possesses powers and performs functions comparable to those associated with municipalities;
(B)Is closely settled(except that the Secretary may reduce or waive this requirement on a case by case basis for the
purposes of the Action Grant program);and
(C)Contains within its boundaries no incorporated places as defined by the United States Bureau of the Census that
have not entered into cooperation agreements with the town or township for a period covering at least 3 years to
undertake or assist in the undertaking of essential community development and housing assistance activities.The
determination of eligibility of a town or township to qualify as a city will be based on information available from the
United States Bureau of the Census and information provided by the town or township and its included units of
general local government.
(2)For purposes of Urban Development Action Grant eligibility only, Guam,the Virgin Islands,American Samoa,the
Commonwealth of the Northern Mariana Islands,the counties of Kauai, Maui,and Hawaii in the State of Hawaii,and
Indian tribes that are eligible recipients under the State and Local Government Fiscal Assistance Act of 1972 and
located on reservations in Oklahoma as determined by the Secretary of the Interior or in Alaskan Native Villages.
Community Development Financial Institution has the same meaning as used in the Community Development
Banking and Financial Institutions Act of 1994(12 U.S.C.4701 note).
Consolidated plan.The plan prepared in accordance with 24 CFR part 91,which describes needs,resources,
priorities and proposed activities to be undertaken with respect to HUD programs,including the CDBG program.An
approved consolidated plan means a consolidated plan that has been approved by HUD in accordance with 24 CFR
part 91.
Discretionary grant means a grant made from the various Special Purpose Grants in accordance with subpart E of
this part.
1
Entitlement amount means the amount of funds which a metropolitan city is entitled to receive under the Entitlement
grant program,as determined by formula set forth in section 106 of the Act.
Extent of growth lag shall have the meaning provided in section 102(a)(12)of the Act.
Extent of housing overcrowding shall have the meaning provided in section 102(ax10)of the Act.
7
Extent of poverty means the number of persons whose incomes are below the poverty level based on data compiled
and published by the United States Bureau of the Census available from the latest census referable to the same point
or period in time and the latest reports from the Office of Management and Budget.For purposes of this part,the
Secretary has determined that it is neither feasible nor appropriate to make adjustments at this time in the
computations of"extent of poverty"for regional or area variations in income and cost of living.
Family means all persons living in the same household who are related by birth,marriage or adoption.
Household means all the persons who occupy a housing unit.The occupants may be a single family,one person
living alone,two or more families living together,or any other group of related or unrelated persons who share living
arrangements.
Income.For the purpose of determining whether a family or household is low-and moderate-income under subpart C
of this part,grantees may select any of the three definitions listed below for each activity,except that integrally related
activities of the same type and qualifying under the same paragraph of§570.208(a)shall use the same definition of
income.The option to choose a definition does not apply to activities that qualify under§570.208(a)(1)(Area benefit
activities),except when the recipient carries out a survey under§570.208(a)(1)(vi).Activities qualifying under
§570.208(ax1)generally must use the area income data supplied to recipients by HUD.The three definitions are as
follows:
(1)(i)"Annual income"as defined under the Section 8 Housing Assistance Payments program at 24 CFR 813.106
(except that if the CDBG assistance being provided is homeowner rehabilitation under§570.202,the value of the
homeowner's primary residence may be excluded from any calculation of Net Family Assets);or
(ii)Annual income as reported under the Census long-form for the most recent available decennial Census.This
definition includes:
(A)Wages,salaries,tips,commissions,etc.;
(B)Self-employment income from own nonfarm business,including proprietorships and partnerships;
(C)Farm self-employment income;
(D)Interest,dividends,net rental income,or income from estates or trusts;
(E)Social Security or railroad retirement;
(F)Supplemental Security Income,Aid to Families with Dependent Children,or other public assistance or public
welfare programs;
(G)Retirement,survivor,or disability pensions;and
(H)Any other sources of income received regularly,including Veterans'(VA)payments,unemployment
compensation,and alimony;or
(iii)Adjusted gross income as defined for purposes of reporting under Internal Revenue Service(IRS)Form 1040 for
individual Federal annual income tax purposes.
(2)Estimate the annual income of a family or household by projecting the prevailing rate of income of each person at
the time assistance is provided for the individual,family,or household(as applicable).Estimated annual income shall
include income from all family or household members,as applicable.Income or asset enhancement derived from the
CDBG-assisted activity shall not be considered in calculating estimated annual income.
Insular area shall have the meaning provided in section 102(ax24)of the Act.
8
Low-and moderate-income household means a household having an income equal to or less than the Section 8
lowincome
limit established by HUD.
Low-and moderate-income person means a member of a family having an income equal to or less than the Section 8
low-income limit established by HUD.Unrelated individuals will be considered as one-person families for this
purpose.
Low-income household means a household having an income equal to or less than the Section 8 very low-income
limit established by HUD.
Low-income person means a member of a family that has an income equal to or less than the Section 8 very
lowincome
limit established by HUD.Unrelated individuals shall be considered as one-person families for this purpose.
Metropolitan area shall have the meaning provided in section 102(a)(3)of the Act.
Metropolitan city shall have the meaning provided in section 102(a)(4)of the Act except that the term"central city"is
replaced by"principal city."
Microenterprise shall have the meaning provided in section 102(a)(22)of the Act.
Moderate-income household means a household having an income equal to or less than the Section 8 low-income
limit and greater than the Section 8 very low-income limit,established by HUD.
Moderate-income person means a member of a family that has an income equal to or less than the Section 8
lowincome
limit and greater than the Section 8 very low-income limit,established by HUD. Unrelated individuals shall be
2
considered as one-person families for this purpose.
Nonentitlement amount means the amount of funds which is allocated for use in a State's nonentitlement areas as
determined by formula set forth in section 106 of the Act.
Nonentitlement area shall have the meaning provided in section 102(a)(7)of the Act.
Population means the total resident population based on data compiled and published by the United States Bureau of
the Census available from the latest census or which has been upgraded by the Bureau to reflect the changes
resulting from the Boundary and Annexation Survey,new incorporations and consolidations of governments pursuant
to§570.4,and which reflects,where applicable,changes resulting from the Bureau's latest population determination
through its estimating technique using natural changes(birth and death)and net migration,and is referable to the
same point or period in time.
Small business means a business that meets the criteria set forth in section 3(a)of the Small Business Act(15 U.S.C.
631,636,637).
State shall have the meaning provided in section 102(ax2)of the Act.
Unit of general local government shall have the meaning provided in section 102(ax1)of the Act.
Urban county shall have the meaning provided in section 102(a)(6)of the Act. For the purposes of this definition,
HUD will determine whether the county's combined population contains the required percentage of low-and
moderate-income persons by identifying the number of persons that resided in applicable areas and units of general
local government based on data from the most recent decennial census,and using income limits that would have
applied for the year in which that census was taken.
Urban Development Action Grant(UDAG)means a grant made by the Secretary pursuant to section 119 of the Act
and subpart G of this part.
9
[53 FR 34437,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 56 FR 56126,Oct.31, 1991;60 FR 1915,
1943,Jan.5, 1995;60 FR 56909,Nov.9, 1995;61 FR 5209, Feb.9, 1996;61 FR 11475, Mar.20, 1996;61 FR
18674,Apr.29, 1996;68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.4 Allocation of funds.
(a)The determination of eligibility of units of general local government to receive entitlement grants,the entitlement
amounts,the allocation of appropriated funds to States for use in nonentitlement areas,the reallocation of funds,the
allocation of appropriated funds to insular areas,and the allocation of appropriated funds for discretionary grants
under the Secretary's Fund shall be governed by the policies and procedures described in sections 106 and 107 of
the Act,as appropriate.
(b)The definitions in§570.3 shall govern in applying the policies and procedures described in sections 106 and 107
of the Act.
(c)In determining eligibility for entitlement and in allocating funds under section 106 of the Act for any federal fiscal
year,HUD will recognize corporate status and geographical boundaries and the status of metropolitan areas and
principal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1)With respect to corporate status as certified by the applicable State and available for processing by the Census
Bureau as of such date;
(2)With respect to boundary changes or annexations,as are used by the Census Bureau in preparing population
estimates for all general purpose governmental units and are available for processing by the Census Bureau as of
such date,except that any such boundary changes or annexations which result in the population of a unit of general
local government reaching or exceeding 50,000 shall be recognized for this purpose whether or not such changes are
used by the Census Bureau in preparing such population estimates;and
(3)With respect to the status of Metropolitan Statistical Areas and principal cities,as officially designated by the
Office of Management and Budget as of such date.
(d)In determining whether a county qualifies as an urban county,and in computing entitlement amounts for urban
counties,the demographic values of population,poverty,housing overcrowding,and age of housing of any Indian
tribes located within the county shall be excluded.In allocating amounts to States for use in nonentitlement areas,the
demographic values of population,poverty,housing overcrowding and age of housing of all Indian tribes located in all
nonentitled areas shall be excluded. It is recognized that all such data on Indian tribes are not generally available
from the United States Bureau of the Census and that missing portions of data will have to be estimated. In
accomplishing any such estimates the Secretary may use such other related information available from reputable
sources as may seem appropriate, regardless of the data's point or period of time and shall use the best judgement
possible in adjusting such data to reflect the same point or period of time as the overall data from which the Indian
tribes are being deducted,so that such deduction shall not create an imbalance with those overall data.
(e)Amounts remaining after closeout of a grant which are required to be returned to HUD under the provisions of
§570.509,Grant closeout procedures,shall be considered as funds available for reallocation unless the appropriation
under which the funds were provided to the Department has lapsed.
[53 FR 34437,Sept.6, 1988,as amended at 68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.5 Waivers.
HUD's authority for the waiver of regulations and for the suspension of requirements to address damage in a
Presidentially declared disaster area is described in 24 CFR part 5 and in section 122 of the Act,respectively.
[61 FR 11476, Mar.20, 1996]
Subpart B [Reserved]
3
10
Subpart C—Eligible Activities
Source: 53 FR 34439, Sept. 6, 1988, unless otherwise noted.
§570.200 General policies.
(a)Determination of eligibility.An activity may be assisted in whole or in part with CDBG funds only if all of the
following requirements are met:
(1)Compliance with section 105 of the Act. Each activity must meet the eligibility requirements of section 105 of the
Act as further defined in this subpart.
(2)Compliance with national objectives.Grant recipients under the Entitlement and HUD-administered Small Cities
programs and recipients of insular area funds under section 106 of the Act must certify that their projected use of
funds has been developed so as to give maximum feasible priority to activities which will carry out one of the national
objectives of benefit to low-and moderate-income families or aid in the prevention or elimination of slums or blight.
The projected use of funds may also include activities that the recipient certifies are designed to meet other
community development needs having a particular urgency because existing conditions pose a serious and
immediate threat to the health or welfare of the community where other financial resources are not available to meet
such needs.Consistent with the foregoing,each recipient under the Entitlement or HUD-administered Small Cities
programs,and each recipient of insular area funds under section 106 of the Act must ensure and maintain evidence
that each of its activities assisted with CDBG funds meets one of the three national objectives as contained in its
certification.Criteria for determining whether an activity addresses one or more of these objectives are found in
§570208.
(3)Compliance with the primary objective.The primary objective of the Act is described in section 101(c)of the Act.
Consistent with this objective,entitlement recipients,non-entitlement CDBG grantees in Hawaii,and recipients of
insular area funds under section 106 of the Act must ensure that,over a period of time specified in their certification
not to exceed three years,not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities
meeting the criteria under§570.208(a)or under§570.208(dx5)or(6)for benefiting low-and moderate-income
persons.For grants under section 107 of the Act,insular area recipients must meet this requirement for each
separate grant.See§570.420(d)(3)for additional discussion of the primary objective requirement for insular areas
funded under section 106 of the Act.The requirements for the HUD-administered Small Cities program in New York
are at§570.420(d)(2). In determining the percentage of funds expended for such activities:
(i)Cost of administration and planning eligible under§570.205 and§570.206 will be assumed to benefit low and
moderate income persons in the same proportion as the remainder of the CDBG funds and,accordingly shall be
excluded from the calculation;
(ii)Funds deducted by HUD for repayment of urban renewal temporary loans pursuant to§570.802(b)shall be
excluded;
(iii)Funds expended for the repayment of loans guaranteed under the provisions of subpart M shall also be excluded;
(iv)Funds expended for the acquisition,new construction or rehabilitation of property for housing that qualifies under
§570.208(aX3)shall be counted for this purpose but shall be limited to an amount determined by multiplying the total
cost(including CDBG and non-CDBG costs)of the acquisition,construction or rehabilitation by the percent of units in
such housing to be occupied by low and moderate income persons.
(v)Funds expended for any other activities qualifying under§570208(a)shall be counted for this purpose in their
entirety.
(4)Compliance with environmental review procedures.The environmental review procedures set forth at 24 CFR part
58 must be completed for each activity(or project as defined in 24 CFR part 58),as applicable.
(5)Cost principles.Costs incurred,whether charged on a direct or an indirect basis,must be in conformance with
OMB Circulars A-87,"Cost Principles for State,Local and Indian Tribal Governments";A-122,"Cost Principles for
11
Non-profit Organizations";or A-21,"Cost Principles for Educational Institutions,"as applicable.i All items of cost
listed in Attachment B of these Circulars that require prior Federal agency approval are allowable without prior
approval of HUD to the extent they comply with the general policies and principles stated in Attachment A of such
circulars and are otherwise eligible under this subpart C,except for the following:
These circulars are available from the American Communities Center by calling the following toll-free
numbers: (800)998-9999 or(800)483-2209(TDD).
(i)Depreciation methods for fixed assets shall not be changed without HUD's specific approval or,if charged through
a cost allocation plan,the Federal cognizant agency.
(ii)Fines and penalties(including punitive damages)are unallowable costs to the CDBG program.
(iii)Pre-award costs are limited to those authorized under paragraph(h)of this section.
(b)Special policies governing facilities.The following special policies apply to:
(1)Facilities containing both eligible and ineligible uses.A public facility otherwise eligible for assistance under the
CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible
uses,it
(i)The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area
within the larger facility;and
(ii)The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct
from the overall costs of the multiple-use building and/or facility.
4
Allowable costs are limited to those attributable to the eligible portion of the building or facility.
(2)Fees for use of facilities. Reasonable fees may be charged for the use of the facilities assisted with CDBG funds,
but charges such as excessive membership fees,which will have the effect of precluding low and moderate income
persons from using the facilities,are not permitted.
(c)Special assessments under the CDBG program. The following policies relate to special assessments under the
CDBG program:
(1)Definition of special assessment. The term"special assessment"means the recovery of the capital costs of a
public improvement,such as streets,water or sewer lines,curbs,and gutters,through a fee or charge levied or filed
as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public
improvement,or a one-time charge made as a condition of access to a public improvement.This term does not relate
to taxes,or the establishment of the value of real estate for the purpose of levying real estate,property,or ad valorem
taxes,and does not include periodic charges based on the use of a public improvement,such as water or sewer user
charges,even if such charges include the recovery of all or some portion of the capital costs of the public
improvement.
(2)Special assessments to recover capital costs.Where CDBG funds are used to pay all or part of the cost of a
public improvement,special assessments may be imposed as follows:
(i)Special assessments to recover the CDBG funds may be made only against properties owned and occupied by
persons not of low and moderate income.Such assessments constitute program income.
(ii)Special assessments to recover the non-CDBG portion may be made provided that CDBG funds are used to pay
the special assessment in behalf of all properties owned and occupied by low and moderate income persons;except
that CDBG funds need not be used to pay the special assessments in behalf of properties owned and occupied by
moderate income persons if the grant recipient certifies that it does not have sufficient CDBG funds to pay the
assessments in behalf of all of the low and moderate income owner-occupant persons.Funds collected through such
special assessments are not program income.
12
(3)Public improvements not initially assisted with CDBG funds. The payment of special assessments with CDBG
funds constitutes CDBG assistance to the public improvement.Therefore,CDBG funds may be used to pay special
assessments provided:
(i)The installation of the public improvements was carried out in compliance with requirements applicable to activities
assisted under this part including environmental,citizen participation and Davis-Bacon requirements;
(ii)The installation of the public improvement meets a criterion for national objectives in§570.208(ax1),(b),or(c);
and
(iii)The requirements of§570.200(c)(2)(ii)are met.
(d)Consultant activities. Consulting services are eligible for assistance under this part for professional assistance in
program planning,development of community development objectives,and other general professional guidance
relating to program execution.The use of consultants is governed by the following:
(1)Employer-employee type of relationship. No person providing consultant services in an employer-employee type
of relationship shall receive more than a reasonable rate of compensation for personal services paid with CDBG
funds. In no event,however,shall such compensation exceed the equivalent of the daily rate paid for Level IV of the
Executive Schedule.Such services shall be evidenced by written agreements between the parties which detail the
responsibilities,standards,and compensation.
(2)Independent contractor relationship. Consultant services provided under an independent contractor relationship
are governed by the procurement requirements in 24 CFR 85.36,and are not subject to the compensation limitation
of Level IV of the Executive Schedule.
(e)Recipient determinations required as a condition of eligibility. In several instances under this subpart,the eligibility
of an activity depends on a special local determination.Recipients shall maintain documentation of all such
determinations.A written determination is required for any activity carried out under the authority of§§570.201(f),
570.201(i)(2),570.201(p),570.201(q),570.202(b)(3),570.206(f),570.209,570.210,and 570.309.
(f)Means of canying out eligible activities.(1)Activities eligible under this subpart,other than those authorized under
§570.204(a),may be undertaken, subject to local law:
(i)By the recipient through:
(A)Its employees,or
(B)Procurement contracts governed by the requirements of 24 CFR 85.36;or
(ii)Through loans or grants under agreements with subrecipients,as defined at§570.500(c);or
(iii)By one or more public agencies,including existing local public agencies,that are designated by the chief
executive officer of the recipient.
(2)Activities made eligible under§570.204(a)may only be undertaken by entities specified in that section.
(g)Limitation on planning and administrative costs. No more than 20 percent of the sum of any grant,plus program
income,shall be expended for planning and program administrative costs,as defined in§§570.205 and 507.206,
respectively. Recipients of entitlement grants under subpart D of this part shall conform with this requirement by
limiting the amount of CDBG funds obligated for planning plus administration during each program year to an amount
no greater than 20 percent of the sum of its entitlement grant made for that program year(if any)plus the program
income received by the recipient and its subrecipients(if any)during that program year.
(h)Reimbursement for pre-award costs.The effective date of the grant agreement is the program year start date or
the date that the consolidated plan is received by HUD,whichever is later. For a Section 108 loan guarantee,the
5
13
effective date of the grant agreement is the date of HUD execution of the grant agreement amendment for the
particular loan guarantee commitment.
(1)Prior to the effective date of the grant agreement,a recipient may incur costs or may authorize a subrecipient to
incur costs,and then after the effective date of the grant agreement pay for those costs using its CDBG funds,
provided that:
(i)The activity for which the costs are being incurred is included,prior to the costs being incurred,in a consolidated
plan action plan,an amended consolidated plan action plan,or an application under subpart M of this part,except
that a new entitlement grantee preparing to receive its first allocation of CDBG funds may incur costs necessary to
develop its consolidated plan and undertake other administrative actions necessary to receive its first grant,prior to
the costs being included in its consolidated plan;
(ii)Citizens are advised of the extent to which these pre-award costs will affect future grants;
(iii)The costs and activities funded are in compliance with the requirements of this part and with the Environmental
Review Procedures stated in 24 CFR part 58;
(iv)The activity for which payment is being made complies with the statutory and regulatory provisions in effect at the
time the costs are paid for with CDBG funds;
(v)CDBG payment will be made during a time no longer than the next two program years following the effective date
of the grant agreement or amendment in which the activity is first included;and
(vi)The total amount of pre-award costs to be paid during any program year pursuant to this provision is no more
than the greater of 25 percent of the amount of the grant made for that year or$300,000.
(2)Upon the written request of the recipient,HUD may authorize payment of pre-award costs for activities that do not
meet the criteria at paragraph(hx1 Xv)or(h)(1 Xvi)of this section,if HUD determines,in writing,that there is good
cause for granting an exception upon consideration of the following factors,as applicable:
(i)Whether granting the authority would result in a significant contribution to the goals and purposes of the CDBG
program;
(ii)Whether failure to grant the authority would result in undue hardship to the recipient or beneficiaries of the activity;
(iii)Whether granting the authority would not result in a violation of a statutory provision or any other regulatory
provision;
(iv)Whether circumstances are clearly beyond the recipient's control;or
(v)Any other relevant considerations.
(i)Urban Development Action Grant.Grant assistance may be provided with Urban Development Action Grant funds,
subject to the provisions of subpart G,for:
(1)Activities eligible for assistance under this subpart;and
(2)Notwithstanding the provisions of§570.207,such other activities as the Secretary may determine to be consistent
with the purposes of the Urban Development Action Grant program.
(j)Faith-based activities.(1)Organizations that are religious or faith-based are eligible,on the same basis as any
other organization,to participate in the CDBG program.Neither the Federal government nor a State or local
government receiving funds under CDBG programs shall discriminate against an organization on the basis of the
organization's religious character or affiliation.
2)Organizations that are directly funded under the CDBG program may not engage in inherently religious activities,
such as worship,religious instruction,or proselytization,as part of the programs or services funded under this part. If
an organization conducts such activities,the activities must be offered separately,in time or location,from the
programs or services funded under this part,and participation must be voluntary for the beneficiaries of the
HUDfunded
programs or services.
(3)A religious organization that participates in the CDBG program will retain its independence from Federal,State,
and local governments,and may continue to carry out its mission,including the definition,practice,and expression of
its religious beliefs,provided that it does not use direct CDBG funds to support any inherently religious activities,such
as worship,religious instruction,or proselytization.Among other things,faith-based organizations may use space in
their facilities to provide CDBG-funded services,without removing religious art,icons,scriptures,or other religious
symbols. In addition,a CDBG-funded religious organization retains its authority over its internal governance,and it
may retain religious terms in its organization's name,select its board members on a religious basis,and include
religious references in its organization's mission statements and other governing documents.
(4)An organization that participates in the CDBG program shall not,in providing program assistance,discriminate
against a program beneficiary or prospective program beneficiary on the basis of religion or religious belief.
(5)CDBG funds may not be used for the acquisition,construction,or rehabilitation of structures to the extent that
those structures are used for inherently religious activities.CDBG funds may be used for the acquisition,construction,
or rehabilitation of structures only to the extent that those structures are used for conducting eligible activities under
this part.Where a structure is used for both eligible and inherently religious activities,CDBG funds may not exceed
the cost of those portions of the acquisition,construction,or rehabilitation that are attributable to eligible activities in
accordance with the cost accounting requirements applicable to CDBG funds in this part.Sanctuaries,chapels,or
other rooms that a CDBG-funded religious congregation uses as its principal place of worship,however,are ineligible
for CDBG-funded improvements. Disposition of real property after the term of the grant,or any change in use of the
property during the term of the grant,is subject to government-wide regulations governing real property disposition
6
see 24 CFR parts 84 and 85).
(6)If a State or local government voluntarily contributes its own funds to supplement federally funded activities,the
State or local government has the option to segregate the Federal funds or commingle them.However,if the funds
are commingled,this section applies to all of the commingled funds.
[53 FR 34439,Sept. 6, 1988,as amended at 54 FR 47031,Nov.8, 1989;57 FR 27119,June 17, 1992;60 FR 1943,
Jan.5, 1995;60 FR 17445,Apr.6, 1995;60 FR 56910,Nov.9, 1995;61 FR 11476,Mar.20, 1996;61 FR 18674,
Apr.29, 1996;65 FR 70215,Nov.21,2000;68 FR 56404,Sept.30,2003;69 FR 32778,June 10,2004;70 FR
76369, Dec.23,2005; 72 FR 46370,Aug. 17,2007]
§ 570.201 Basic eligible activities.
CDBG funds may be used for the following activities:
(a)Acquisition.Acquisition in whole or in part by the recipient,or other public or private nonprofit entity,by purchase,
long-term lease,donation,or otherwise,of real property(including air rights,water rights,rights-of-way,easements,
and other interests therein)for any public purpose,subject to the limitations of§570.207.
(b)Disposition. Disposition,through sale,lease,donation,or otherwise,of any real property acquired with CDBG
funds or its retention for public purposes, including reasonable costs of temporarily managing such property or
property acquired under urban renewal,provided that the proceeds from any such disposition shall be program
income subject to the requirements set forth in§570.504.
(c)Public facilities and improvements.Acquisition,construction,reconstruction,rehabilitation or installation of public
facilities and improvements,except as provided in§570.207(a),carried out by the recipient or other public or private
nonprofit entities.(However,activities under this paragraph may be directed to the removal of material and
architectural barriers that restrict the mobility and accessibility of elderly or severely disabled persons to public
facilities and improvements,including those provided for in§570.207(ax1).)In undertaking such activities,design
features and improvements which promote energy efficiency may be included.Such activities may also include the
execution of architectural design features,and similar treatments intended to enhance the aesthetic quality of
15
facilities and improvements receiving CDBG assistance,such as decorative pavements,railings,sculptures,pools of
water and fountains,and other works of art.Facilities designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the prohibition of new housing construction described in
§570.207(bX3).Such facilities include shelters for the homeless;convalescent homes;hospitals,nursing homes;
battered spouse shelters;halfway houses for run-away children,drug offenders or parolees;group homes for
mentally retarded persons and temporary housing for disaster victims. In certain cases,nonprofit entities and
subrecipients including those specified in§570.204 may acquire title to public facilities.When such facilities are
owned by nonprofit entities or subrecipients,they shall be operated so as to be open for use by the general public
during all normal hours of operation.Public facilities and improvements eligible for assistance under this paragraph
are subject to the policies in§570.200(b).
(d)Clearance and remediation activities. Clearance,demolition,and removal of buildings and improvements,
including movement of structures to other sites and remediation of known or suspected environmental contamination.
Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.
Remediation may include project-specific environmental assessment costs not otherwise eligible under§570.205.
(e)Public services. Provision of public services(including labor,supplies,and materials)including but not limited to
those concerned with employment,crime prevention,child care, health,drug abuse,education,fair housing
counseling,energy conservation,welfare(but excluding the provision of income payments identified under
§570.207(b)(4)), homebuyer downpayment assistance,or recreational needs.To be eligible for CDBG assistance,a
public service must be either a new service or a quantifiable increase in the level of an existing service above that
which has been provided by or on behalf of the unit of general local government(through funds raised by the unit or
received by the unit from the State in which it is located)in the 12 calendar months before the submission of the
action plan.(An exception to this requirement may be made if HUD determines that any decrease in the level of a
service was the result of events not within the control of the unit of general local government.)The amount of CDBG
funds used for public services shall not exceed paragraphs(e)(1)or(2)of this section,as applicable:
(1)The amount of CDBG funds used for public services shall not exceed 15 percent of each grant,except that for
entitlement grants made under subpart D of this part,the amount shall not exceed 15 percent of the grant plus 15
percent of program income,as defined in§570.500(a). For entitlement grants under subpart D of this part,
compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program
year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of
the program income received during the grantee's immediately preceding program year.
(2)A recipient which obligated more CDBG funds for public services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law
98-8),may obligate more CDBG funds than allowable under paragraph(ex1)of this section,so long as the total
amount obligated in any program year does not exceed:
(i)For an entitlement grantee, 15%of the program income it received during the preceding program year;plus
(ii)A portion of the grant received for the program year which is the highest of the following amounts:
(A)The amount determined by applying the percentage of the grant it obligated for public services in the 1982
program year against the grant for its current program year;
(B)The amount determined by applying the percentage of the grant it obligated for public services in the 1983
programyear against the grant for its
current program year;
7
(C)The amount of funds it obligated for public services in the 1982 program year;or,
(D)The amount of funds it obligated for public services in the 1983 program year.
(f)Interim assistance.(1)The following activities may be undertaken on an interim basis in areas exhibiting
objectively determinable signs of physical deterioration where the recipient has determined that immediate action is
necessary to arrest the deterioration and that permanent improvements will be carried out as soon as practicable:
(i)The repairing of streets,sidewalks,parks,playgrounds,publicly owned utilities,and public buildings;and
16
(ii)The execution of special garbage,trash,and debris removal,including neighborhood cleanup campaigns,but not
the regular curbside collection of garbage or trash in an area.
(2)In order to alleviate emergency conditions threatening the public health and safety in areas where the chief
executive officer of the recipient determines that such an emergency condition exists and requires immediate
resolution,CDBG funds may be used for:
(i)The activities specified in paragraph(f)(1)of this section,except for the repair of parks and playgrounds;
(ii)The clearance of streets,including snow removal and similar activities,and
(iii)The improvement of private properties.
(3)All activities authorized under paragraph(0(2)of this section are limited to the extent necessary to alleviate
emergency conditions.
(g)Payment of non-Federal share. Payment of the non-Federal share required in connection with a Federal grant-
inaid
program undertaken as part of CDBG activities,provided,that such payment shall be limited to activities
otherwise eligible and in compliance with applicable requirements under this subpart.
(h)Urban renewal completion. Payment of the cost of completing an urban renewal project funded under title I of the
Housing Act of 1949 as amended.Further information regarding the eligibility of such costs is set forth in§570.801.
(i)Relocation. Relocation payments and other assistance for permanently and temporarily relocated individuals
families,businesses,nonprofit organizations,and farm operations where the assistance is(1)required under the
provisions of§570.606(b)or(c);or(2)determined by the grantee to be appropriate under the provisions of
§570.606(d).
(j)Loss of rental income. Payments to housing owners for losses of rental income incurred in holding,for temporary
periods,housing units to be used for the relocation of individuals and families displaced by program activities assisted
under this part.
(k)Housing services. Housing services,as provided in section 105(ax21)of the Act(42 U.S.C.5305(a)(21)).
(I)Privately owned utilities.CDBG funds may be used to acquire,construct,reconstruct,rehabilitate,or install the
distribution lines and facilities of privately owned utilities,including the placing underground of new or existing
distribution facilities and lines.
(m)Construction of housing. CDBG funds may be used for the construction of housing assisted under section 17 of
the United States Housing Act of 1937.
(n)Homeownership assistance. CDBG funds may be used to provide direct homeownership assistance to low-or
moderate-income households in accordance with section 105(a)of the Act.
(o)(1)The provision of assistance either through the recipient directly or through public and private organizations,
agencies,and other subrecipients(including nonprofit and for-profit subrecipients)to facilitate economic development
by:
(i)Providing credit,including,but not limited to,grants,loans,loan guarantees,and other forms of financial support,
for the establishment,stabilization,and expansion of microenterprises;
(ii)Providing technical assistance,advice,and business support services to owners of microenterprises and persons
developing microenterprises;and
(iii)Providing general support,including,but not limited to,peer support programs,counseling,child care,
transportation,and other similar services,to owners of microenterprises and persons developing microenterprises.
17
(2)Services provided this paragraph(o)shall not be subject to the restrictions on public services contained in
paragraph(e)of this section.
(3)For purposes of this paragraph(o),"persons developing microenterprises"means such persons who have
expressed interest and who are,or after an initial screening process are expected to be,actively working toward
developing businesses,each of which is expected to be a microenterprise at the time it is formed.
(4)Assistance under this paragraph(o)may also include training,technical assistance,or other support services to
increase the capacity of the recipient or subrecipient to carry out the activities under this paragraph(o).
(p)Technical assistance. Provision of technical assistance to public or nonprofit entities to increase the capacity of
such entities to carry out eligible neighborhood revitalization or economic development activities.(The recipient must
determine,prior to the provision of the assistance,that the activity for which it is attempting to build capacity would be
eligible for assistance under this subpart C,and that the national objective claimed by the grantee for this assistance
can reasonably be expected to be met once the entity has received the technical assistance and undertakes the
activity.)Capacity building for private or public entities(including grantees)for other purposes may be eligible under
§570205.
(q)Assistance to institutions of higher education. Provision of assistance by the recipient to institutions of higher
education when the grantee determines that such an institution has demonstrated a capacity to carry out eligible
8
activities under this subpart C.
[53 FR 34439,Sept.6, 1988,as amended at 53 FR 31239,Aug. 17, 1988;55 FR 29308,July 18, 1990;57 FR
27119,June 17, 1992;60 FR 1943,Jan.5, 1995;60 FR 56911, Nov.9, 1995;61 FR 18674,Apr.29, 1996;65 FR
70215, Nov.21,2000;67 FR 47213,July 17,2002;71 FR 30034, May 24,2006]
§570.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation assistance. CDBG funds may be used to finance
the rehabilitation of:
(1)Privately owned buildings and improvements for residential purposes;improvements to a single-family residential
property which is also used as a place of business,which are required in order to operate the business,need not be
considered to be rehabilitation of a commercial or industrial building,if the improvements also provide general benefit
to the residential occupants of the building;
(2)Low-income public housing and other publicly owned residential buildings and improvements;
(3)Publicly or privately owned commercial or industrial buildings,except that the rehabilitation of such buildings
owned by a private for-profit business is limited to improvement to the exterior of the building,abatement of asbestos
hazards,lead-based paint hazard evaluation and reduction,and the correction of code violations;
(4)Nonprofit-owned nonresidential buildings and improvements not eligible under§570.201(c);and
(5)Manufactured housing when such housing constitutes part of the community's permanent housing stock.
(b) Types of assistance.CDBG funds may be used to finance the following types of rehabilitation activities,and
related costs,either singly,or in combination,through the use of grants,loans, loan guarantees,interest
supplements,or other means for buildings and improvements described in paragraph(a)of this section,except that
rehabilitation of commercial or industrial buildings is limited as described in paragraph(a)(3)of this section.
(1)Assistance to private individuals and entities,including profit making and nonprofit organizations,to acquire for the
purpose of rehabilitation,and to rehabilitate properties,for use or resale for residential purposes;
(2)Labor, materials,and other costs of rehabilitation of properties,including repair directed toward an accumulation
of deferred maintenance,replacement of principal fixtures and components of existing structures,installation of
security devices, including smoke detectors and dead bolt locks,and renovation through alterations,additions to,or
18
enhancement of existing structures and improvements,abatement of asbestos hazards(and other contaminants)in
buildings and improvements that may be undertaken singly,or in combination;
(3)Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such
financing is determined by the recipient to be necessary or appropriate to achieve the locality's community
development objectives;
(4)Improvements to increase the efficient use of energy in structures through such means as installation of storm
windows and doors,siding,wall and attic insulation,and conversion,modification,or replacement of heating and
cooling equipment,including the use of solar energy equipment;
(5)Improvements to increase the efficient use of water through such means as water savings faucets and shower
heads and repair of water leaks;
(6)Connection of residential structures to water distribution lines or local sewer collection lines;
(7)For rehabilitation carried out with CDBG funds,costs of:
(i)Initial homeowner warranty premiums;
(ii)Hazard insurance premiums,except where assistance is provided in the form of a grant;and
(iii)Flood insurance premiums for properties covered by the Flood Disaster Protection Act of 1973,pursuant to
§570.605.
(8)Costs of acquiring tools to be lent to owners,tenants,and others who will use such tools to carry out rehabilitation;
(9)Rehabilitation services,such as rehabilitation counseling,energy auditing,preparation of work specifications,loan
processing,inspections,and other services related to assisting owners,tenants,contractors,and other entities,
participating or seeking to participate in rehabilitation activities authorized under this section,under section 312 of the
Housing Act of 1964,as amended,under section 810 of the Act,or under section 17 of the United States Housing Act
of 1937;
(10)Assistance for the rehabilitation of housing under section 17 of the United States Housing Act of 1937;and
(11)Improvements designed to remove material and architectural barriers that restrict the mobility and accessibility of
elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph(a)of this
section.
(c)Code enforcement. Costs incurred for inspection for code violations and enforcement of codes(e.g.,salaries and
related expenses of code enforcement inspectors and legal proceedings,but not including the cost of correcting the
violations)in deteriorating or deteriorated areas when such enforcement together with public or private
improvements,rehabilitation,or services to be provided may be expected to arrest the decline of the area.
(d)Historic preservation. CDBG funds may be used for the rehabilitation,preservation or restoration of historic
properties,whether publicly or privately owned. Historic properties are those sites or structures that are either listed in
or eligible to be listed in the National Register of Historic Places,listed in a State or local inventory of historic places,
or designated as a State or local landmark or historic district by appropriate law or ordinance. Historic preservation,
however,is not authorized for buildings for the general conduct of government.
(e)Renovation of closed buildings. CDBG funds may be used to renovate closed buildings,such as closed school
buildings,for use as an eligible public facility or to rehabilitate such buildings for housing.
(f)Lead-based paint activities.Lead-based paint activities pursuant to§570.608.
9
[53 FR 34439,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 60 FR 1944,Jan.5, 1995;60 FR 56911,
Nov.9, 1995;64 FR 50225,Sept. 15, 1999;71 FR 30035,May 24,2006]
§570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development activities in addition to other activities authorized
in this subpart that may be carried out as part of an economic development project.Guidelines for selecting activities
to assist under this paragraph are provided at§570.209.The recipient must ensure that the appropriate level of public
benefit will be derived pursuant to those guidelines before obligating funds under this authority.Special activities
authorized under this section do not include assistance for the construction of new housing.Activities eligible under
this section may include costs associated with project-specific assessment or remediation of known or suspected
environmental contamination.Special economic development activities include:
(a)The acquisition,construction, reconstruction,rehabilitation or installation of commercial or industrial buildings,
structures,and other real property equipment and improvements,including railroad spurs or similar extensions.Such
activities may be carried out by the recipient or public or private nonprofit subrecipients.
(b)The provision of assistance to a private for-profit business,including,but not limited to,grants,loans,loan
guarantees,interest supplements,technical assistance,and other forms of support,for any activity where the
assistance is appropriate to carry out an economic development project,excluding those described as ineligible in
§570.207(a). In selecting businesses to assist under this authority,the recipient shall minimize,to the extent
practicable,displacement of existing businesses and jobs in neighborhoods.
(c)Economic development services in connection with activities eligible under this section,including,but not limited
to,outreach efforts to market available forms of assistance;screening of applicants;reviewing and underwriting
applications for assistance;preparation of all necessary agreements;management of assisted activities;and the
screening,referral,and placement of applicants for employment opportunities generated by CDBG-eligible economic
development activities,including the costs of providing necessary training for persons filling those positions.
[53 FR 34439,Sept.6,1988,as amended at 60 FR 1944,Jan.5,1995;71 FR 30035,May 24,2006]
§570.204 Special activities by Community-Based Development Organizations(CBDOs).
(a)Eligible activities.The recipient may provide CDBG funds as grants or loans to any CBDO qualified under this
section to carry out a neighborhood revitalization,community economic development,or energy conservation project.
The funded project activities may include those listed as eligible under this subpart,and,except as described in
paragraph(b)of this section,activities not otherwise listed as eligible under this subpart.For purposes of qualifying
as a project under paragraphs(a)(1),(a)(2),and(a)(3)of this section,the funded activity or activities may be
considered either alone or in concert with other project activities either being carried out or for which funding has
been committed.For purposes of this section:
(1)Neighborhood revitalization project includes activities of sufficient size and scope to have an impact on the decline
of a geographic location within the jurisdiction of a unit of general local government(but not the entire jurisdiction)
designated in comprehensive plans,ordinances,or other local documents as a neighborhood,village,or similar
geographical designation;or the entire jurisdiction of a unit of general local government which is under 25,000
population;
(2)Community economic development project includes activities that increase economic opportunity,principally for
persons of low-and moderate-income,or that stimulate or retain businesses or permanent jobs,including projects
that include one or more such activities that are clearly needed to address a lack of affordable housing accessible to
existing or planned jobs and those activities specified at 24 CFR 91.1(ax1 Xiii);activities under this paragraph may
include costs associated with project-specific assessment or remediation of known or suspected environmental
contamination;
(3)Energy conservation project includes activities that address energy conservation,principally for the benefit of the
residents of the recipient's jurisdiction;and
(4)To carry out a project means that the CBDO undertakes the funded activities directly or through contract with an
entity other than the grantee,or through the provision of financial assistance for activities in which it retains a direct
and controlling involvement and responsibilities.
(b)Ineligible activities. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this
subpart,this section does not authorize:
(1)Carrying out an activity described as ineligible in§570.207(a);
(2)Carrying out public services that do not meet the requirements of§570.201(e),except that:
(i)Services carried out under this section that are specifically designed to increase economic opportunities through
job training and placement and other employment support services,including,but not limited to,peer support
programs,counseling,child care,transportation,and other similar services;and byHUD under the provisions
(ii)Services of any type carried out under this section pursuant to a strategy approved
of 24 CFR 91.215(e)shall not be subject to the limitations in§570.201(e)(1)or(2),as applicable;
(3)Providing assistance to activities that would otherwise be eligible under§570.203 that do not meet the
requirements of§570.209;or
(4)Carrying out an activity that would otherwise be eligible under§570.205 or§570.206,but that would result in the
recipient's exceeding the spending limitation in§570.200(g).
(c)Eligible CBDOs.(1)A CBDO qualifying under this section is an organization which has the following
characteristics:
10
CDBG Regulations 24 CFR Part 570
Pages 11-156 will be furnished upon request
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
viol p1,=
Tab 2
"Exhibit D"
Participant Income
Eligibility Form
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3'd Floor-Augusta,Georgia 30901 ■ 7
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783 7
www.augustaga.gov
EXHIBIT "D"
PARTICIPANT INCOME ELIGIBILITY FORM
(Documentation of Income Must be Attached to this Form-See#8)
The information requested below is confidential. This information is used only to track financial
and social status under federal regulations as required for the funding of programs by the U.S.
Department of Housing and Urban Development (HUD) and administered by the Housing and
Community Development Department on behalf of the City of Augusta. Programs requiring this
information include the Community Development Block Grant Program, Emergency Shelter Grant
Program, HOME and Housing Opportunities for Persons With AIDS.
Client Name:
(If services are provided to the child,please put child's name above.)
Client Address:
Parent Name(If applicable):
Neighborhood: Phone#: (Work) Home
1. Number of persons in household:
2. Total annual income of ALL persons residing in household: $
(Show calculation: Monthly income$ x(12 or 26)=$ )
3. Race:
[ ] White [ ] Black/African American [ ] Black/African American&White
[ ] Asian [ ] Asian&White [ ] Am.Indian/Alaskan Native&Black/African Am.
[ ] Am. Indian/Alaskan Native [ ] Native Hawaiian/Other Pacific Islander
[ ] Am. Indian/Alaskan Native&White [ ] Other Multi-Racial
[ ] Hispanic(of the race identified,check this block if the person is of Hispanic origin
4. Sex: [ ] Male [ ] Female
5. Female Head of Household? [ ] Yes [ ] No
6. Client 62 or older? [ ] Yes [ ] No
7. Disabled? [ ] Yes [ ] No
8. Attach Income verification(s) [ ] Yes [ ] No
(Verification of Income MUST BE ATTACHED. Examples of income verifications include check stubs,W-2 form,SSI,TANF,
Social Security,etc.)
Client Signature Witness Date
FOR OFFICE USE ONLY:
(Circle number of persons in*household and indicate income by circling column a, b,c or d horizontally.)
Year 2018 Income Limits
Family Size a. Extremely Low Income b. Low Income c. Low/Moderate income d. Not LM
(persons) (0%-30%of Median) (31%-50%of Median) (51%-80%of Median)
1 $0- 13,100 $13,101 -21,850 $21,851 -34,900 $34,901+
2 $0- 16,460 $16,461 -24,950 $24,951 -39,900 $39,901+
3 $0-20,780 $20,781 -28,050 $28,051 -44,900 $44,901+
4 $0-25,100 $25,101 -31,150 $31,151 -49,850 $49,851+
5 $0-29,420 $29,421 -33,650 $33,651 -53,850 $53,851+
6 $0-33,740 $33,741 -36,150 $36,151 -57,850 $57,851+
7 $0-38,060 $38,061 -38,650 $38,651 -61,850 $61,851+
8 $0-41,150 $0-$41,150 $41,151 -65,850 $65,851+
CDBG 2018
MEMORANDUM OF AGREEMENT
November 27, 2018
Seeds For Life Community Development Block Grant (CDBG) Program
This Memorandum of Understanding is for the purpose of establishing the
responsibilities and requirements to be assumed by(name of grant recipient)and the City
of Augusta' Housing and Community Development (HCD) Department in providing a
Business Development grant of$10,000 (ten thousand) dollars to awarded recipients of
the Seeds For Life Grant program.
PROJECT DESCRIPTION
The Seeds For Life Business Development Grant is intended to provide an established
business of twelve months or of more working capital in the amount of$10,000 to foster
both business growth and additional employee retainage or hiring of low-mod eligible
employees. There will be io(ten) $10,000 dollar grants awarded: four to "pilot program"
recipients, with the remaining chosen through a competitive panel and a voter selection
process. This grant is intended to give established businesses a monetary infusion to help
them grow and expand their workforce while using the funds for but not limited to: new
or upgraded equipment, increased inventory, employee training, marketing and
advertising activities, new or upgraded signage, working or operating capital to include
salaries of newly hired employees.
GRANT FUNDS
Funding for this Project has been approved by the Augusta-Richmond County
Commission and the U.S. Department of Housing and Urban Development (U.S. HUD)
in the amount of $100,000 as part of the funding established for the Small Business
Development Loan fund. Overall there will be ten grants of $10,000 made to ten
businesses that all must be located in Augusta-Richmond County.
PROJECT ACTIVITIES
Ms. Jennifer D. Tinsley for Field Botanicals LLC and HCD agree to jointly
administer the "Project" as follows:
Ms. Tinsley shall:
1. Comply with the Community Development Block Grant regulations as set forth at
24 CFR Part 570. (attached)
2. Must retain or hire a minimum of one HUD eligible low-moderate employee full
or part-time (see Exhibit D for eligibility requirements attached) with continuing
service for a minimum of twelve months of employment upon receipt of the grant.
(Exhibit D attached)
3. Field Botanicals LLC shall, within six months of receiving funds from AHCD,
provide any and all requested documentation to substantiate the retaining or
hiring of a new full or part-time employee providing background information of
that eligible employee with their hours and responsibilities required for the
business.
4. At the end of the one-year award term, recipient will provide AHCD any and all
information requested related to the use of the CDBG funds for the improvement
of the business and the status of all full and part-time employees involved in this
grant MOA.
5. In the event that Field Botanicals LLC is not able to retain or hire a part
or fulltime employee(s) or if for any reason, AHCD finds reason that
the recipient business misrepresented its intentions or the use of the
funds, HCD retains the right to rescind the grant and recall the money
to be repaid back to the City of Augusta.
6. Field Botanicals LLC is aware that they can receive only one awarded grant over
the entire course of the grant program and once they are awarded can no longer
apply in the future.
The City of Augusta's Housing and Community Development Department shall report to
the U.S. Department of Housing and Urban Development statistics on the number of
persons employed by Field Botanicals LLC.
In Witness Whereof, the parties have set their hands and seals as of the date first written
above.
Attest: Augusta, Georgia
By: Hardie Davis Date:
As Its M.y•r //OW
By: Janice -n Jackson Date: k 2-4 \
Its Adiiini.ii, at•
Ah
By: P.
wthorne We s h•r, 4 r., Director Date: ( 2 3 I�6
i
Appro ea as to Form D .l it � L! !� Date: /2 Mf
Andrew G. MacK- zie
General Counsel
By: Jen ler TinfAelfl Tin -elfBotanicals LLC Date: 11/M 1261g
1
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
VA
Tab
CDBG Regulations
24 CFR Part 570
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3rd Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov ' '
1
,
1
§570.1 Purpose and primary objective.
(a)This part describes policies and procedures applicable to the following programs authorized under title I of the
Housing and Community Development Act of 1974,as amended:
(1)Entitlement grants program(subpart 0);
(2)Nonentitlement Funds: HUD-administered Small Cities and Insular Area programs(subpart F);
(3)State program:State-administered CDBG nonentitlement funds(subpart I);
(4)Special Purpose Grants(subpart E);
(5)Urban Development Action Grant program(subpart 0);and
(6)Loan Guarantees(subpart M).
(b)Subparts A,C,J, K,and 0 apply to all programs in paragraph(a)except as modified or limited under the
provisions of these subparts or the applicable program regulations. In the application of the subparts to Special
Purpose Grants or the Urban Development Action Grant program,the reference to funds in the form of grants in the
term "CDBG funds", as defined in§570.3,shall mean the grant funds under those programs.The subparts do not
apply to the State program(subpart I)except to the extent expressly referred to.
(c)The primary objective of the programs authorized under title I of the Housing and Community Development Act of
1974,as amended,is described in section 101(c)of the Act(42 U.S.C.5301(c)).
[53 FR 34437,Sept.6, 1988,as amended at 56 FR 56126,Oct.31, 1991;61 FR 11475,Mar.20, 1996;69 FR
32778,June 10,2004]
§570.3 Definitions.
The terms HUD and Secretary are defined in 24 CFR part 5.All of the following definitions in this section that rely on
data from the United States Bureau of the Census shall rely upon the data available from the latest decennial census.
Act means title I of the Housing and Community Development Act of 1974 as amended(42 U.S.C.5301 et seq. ).
Age of housing means the number of year-round housing units,as further defined in section 102(a)(11)of the Act.
Applicant means a State or unit of general local government that makes application pursuant to the provisions of
subpart E, F,G or M.
Buildings for the general conduct of government shall have the meaning provided in section 102(a)(21)of the Act.
CDBG funds means Community Development Block Grant funds, including funds received in the form of grants under
subpart D, F,or§570.405 of this part,funds awarded under section 108(q)of the Housing and Community
6
Development Act of 1974,loans guaranteed under subpart M of this part, urban renewal surplus grant funds,and
program income as defined in§570.500(a).
Chief executive officer of a State or unit of general local government means the elected official or the legally
designated official,who has the primary responsibility for the conduct of that entity's governmental affairs. Examples
of the"chief executive officer of a unit of general local government are:the elected mayor of a municipality;the
elected county executive of a county;the chairperson of a county commission or board in a county that has no
elected county executive;and the official designated pursuant to law by the governing body of a unit of general local
government.
City means the following:
(1)For purposes of Entitlement Community Development Block Grant and Urban Development Action Grant
eligibility:
(i)Any unit of general local government that is classified as a municipality by the United States Bureau of the Census,
or
(ii)Any other unit of general local government that is a town or township and that,in the determination of the
Secretary:
(A)Possesses powers and performs functions comparable to those associated with municipalities;
(B)Is closely settled(except that the Secretary may reduce or waive this requirement on a case by case basis for the
purposes of the Action Grant program);and
(C)Contains within its boundaries no incorporated places as defined by the United States Bureau of the Census that
have not entered into cooperation agreements with the town or township for a period covering at least 3 years to
undertake or assist in the undertaking of essential community development and housing assistance activities.The
determination of eligibility of a town or township to qualify as a city will be based on information available from the
United States Bureau of the Census and information provided by the town or township and its included units of
general local government.
(2)For purposes of Urban Development Action Grant eligibility only,Guam,the Virgin Islands,American Samoa,the
Commonwealth of the Northern Mariana Islands,the counties of Kauai,Maui,and Hawaii in the State of Hawaii,and
Indian tribes that are eligible recipients under the State and Local Government Fiscal Assistance Act of 1972 and
located on reservations in Oklahoma as determined by the Secretary of the Interior or in Alaskan Native Villages.
Community Development Financial Institution has the same meaning as used in the Community Development
Banking and Financial Institutions Act of 1994(12 U.S.C.4701 note).
Consolidated plan.The plan prepared in accordance with 24 CFR part 91,which describes needs,resources,
priorities and proposed activities to be undertaken with respect to HUD programs,including the CDBG program.An
approved consolidated plan means a consolidated plan that has been approved by HUD in accordance with 24 CFR
part 91.
Discretionary grant means a grant made from the various Special Purpose Grants in accordance with subpart E of
this part.
1
Entitlement amount means the amount of funds which a metropolitan city is entitled to receive under the Entitlement
grant program,as determined by formula set forth in section 106 of the Act.
Extent of growth lag shall have the meaning provided in section 102(ax12)of the Act.
Extent of housing overcrowding shall have the meaning provided in section 102(ax10)of the Act.
7
Extent of poverty means the number of persons whose incomes are below the poverty level based on data compiled
and published by the United States Bureau of the Census available from the latest census referable to the same point
or period in time and the latest reports from the Office of Management and Budget. For purposes of this part,the
Secretary has determined that it is neither feasible nor appropriate to make adjustments at this time in the
computations of"extent of poverty"for regional or area variations in income and cost of living.
Family means all persons living in the same household who are related by birth,marriage or adoption.
Household means all the persons who occupy a housing unit.The occupants may be a single family,one person
living alone,two or more families living together,or any other group of related or unrelated persons who share living
arrangements.
Income.For the purpose of determining whether a family or household is low-and moderate-income under subpart C
of this part,grantees may select any of the three definitions listed below for each activity,except that integrally related
activities of the same type and qualifying under the same paragraph of§570.208(a)shall use the same definition of
income.The option to choose a definition does not apply to activities that qualify under§570.208(a)(1)(Area benefit
activities),except when the recipient carries out a survey under§570.208(a)(1)(vi).Activities qualifying under
§570.208(ax1)generally must use the area income data supplied to recipients by HUD.The three definitions are as
follows:
(1 Xi)"Annual income"as defined under the Section 8 Housing Assistance Payments program at 24 CFR 813.106
(except that if the CDBG assistance being provided is homeowner rehabilitation under§570202,the value of the
homeowner's primary residence may be excluded from any calculation of Net Family Assets);or
(ii)Annual income as reported under the Census long-form for the most recent available decennial Census.This
definition includes:
(A)Wages,salaries,tips,commissions,etc.;
(B)Self-employment income from own nonfarm business,including proprietorships and partnerships;
(C)Farm self-employment income;
(D)Interest,dividends,net rental income,or income from estates or trusts;
(E)Social Security or railroad retirement;
(F)Supplemental Security Income,Aid to Families with Dependent Children,or other public assistance or public
welfare programs;
(G)Retirement,survivor,or disability pensions;and
(H)Any other sources of income received regularly,including Veterans'(VA)payments,unemployment
compensation,and alimony;or
(iii)Adjusted gross income as defined for purposes of reporting under Internal Revenue Service(IRS)Form 1040 for
individual Federal annual income tax purposes.
(2)Estimate the annual income of a family or household by projecting the prevailing rate of income of each person at
the time assistance is provided for the individual,family,or household(as applicable).Estimated annual income shall
include income from all family or household members,as applicable. Income or asset enhancement derived from the
CDBG-assisted activity shall not be considered in calculating estimated annual income.
Insular area shall have the meaning provided in section 102(a)(24)of the Act.
8
Low-and moderate-income household means a household having an income equal to or less than the Section 8
lowincome
limit established by HUD.
Low-and moderate-income person means a member of a family having an income equal to or less than the Section 8
low-income limit established by HUD.Unrelated individuals will be considered as one-person families for this
purpose.
Low-income household means a household having an income equal to or less than the Section 8 very low-income
limit established by HUD.
Low-income person means a member of a family that has an income equal to or less than the Section 8 very
lowincome
limit established by HUD.Unrelated individuals shall be considered as one-person families for this purpose.
Metropolitan area shall have the meaning provided in section 102(a)(3)of the Act.
Metropolitan city shall have the meaning provided in section 102(a)(4)of the Act except that the term"central city"is
replaced by"principal city."
Microenterprise shall have the meaning provided in section 102(a)(22)of the Act.
Moderate-income household means a household having an income equal to or less than the Section 8 low-income
limit and greater than the Section 8 very low-income limit,established by HUD.
Moderate-income person means a member of a family that has an income equal to or less than the Section 8
lowincome
limit and greater than the Section 8 very low-income limit,established by HUD. Unrelated individuals shall be
2
considered as one-person families for this purpose.
Nonentitlement amount means the amount of funds which is allocated for use in a State's nonentitlement areas as
determined by formula set forth in section 106 of the Act.
Nonentitlement area shall have the meaning provided in section 102(ax7)of the Act.
Population means the total resident population based on data compiled and published by the United States Bureau of
the Census available from the latest census or which has been upgraded by the Bureau to reflect the changes
resulting from the Boundary and Annexation Survey,new incorporations and consolidations of governments pursuant
to§570.4,and which reflects,where applicable,changes resulting from the Bureau's latest population determination
through its estimating technique using natural changes(birth and death)and net migration,and is referable to the
same point or period in time.
Small business means a business that meets the criteria set forth in section 3(a)of the Small Business Act(15 U.S.C.
631,636,637).
State shall have the meaning provided in section 102(ax2)of the Act.
Unit of general local government shall have the meaning provided in section 102(a)(1)of the Act.
Urban county shall have the meaning provided in section 102(a)(6)of the Act. For the purposes of this definition,
HUD will determine whether the county's combined population contains the required percentage of low-and
moderate-income persons by identifying the number of persons that resided in applicable areas and units of general
local government based on data from the most recent decennial census,and using income limits that would have
applied for the year in which that census was taken.
Urban Development Action Grant(UDAG)means a grant made by the Secretary pursuant to section 119 of the Act
and subpart G of this part.
9
[53 FR 34437,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 56 FR 56126,Oct.31, 1991;60 FR 1915,
1943,Jan.5, 1995;60 FR 56909, Nov.9, 1995;61 FR 5209,Feb.9, 1996;61 FR 11475, Mar.20, 1996;61 FR
18674,Apr.29, 1996;68 FR 69582, Dec. 12,2003;69 FR 32778,June 10,2004]
§570.4 Allocation of funds.
(a)The determination of eligibility of units of general local government to receive entitlement grants,the entitlement
amounts,the allocation of appropriated funds to States for use in nonentitlement areas,the reallocation of funds,the
allocation of appropriated funds to insular areas,and the allocation of appropriated funds for discretionary grants
under the Secretary's Fund shall be governed by the policies and procedures described in sections 106 and 107 of
the Act,as appropriate.
(b)The definitions in§570.3 shall govern in applying the policies and procedures described in sections 106 and 107
of the Act.
(c)In determining eligibility for entitlement and in allocating funds under section 106 of the Act for any federal fiscal
year, HUD will recognize corporate status and geographical boundaries and the status of metropolitan areas and
principal cities effective as of July 1 preceding such federal fiscal year,subject to the following limitations:
(1)With respect to corporate status as certified by the applicable State and available for processing by the Census
Bureau as of such date;
(2)With respect to boundary changes or annexations,as are used by the Census Bureau in preparing population
estimates for all general purpose governmental units and are available for processing by the Census Bureau as of
such date,except that any such boundary changes or annexations which result in the population of a unit of general
local government reaching or exceeding 50,000 shall be recognized for this purpose whether or not such changes are
used by the Census Bureau in preparing such population estimates;and
(3)With respect to the status of Metropolitan Statistical Areas and principal cities,as officially designated by the
Office of Management and Budget as of such date.
(d)In determining whether a county qualifies as an urban county,and in computing entitlement amounts for urban
counties,the demographic values of population, poverty,housing overcrowding,and age of housing of any Indian
tribes located within the county shall be excluded. In allocating amounts to States for use in nonentitlement areas,the
demographic values of population,poverty,housing overcrowding and age of housing of all Indian tribes located in all
nonentitled areas shall be excluded. It is recognized that all such data on Indian tribes are not generally available
from the United States Bureau of the Census and that missing portions of data will have to be estimated. In
accomplishing any such estimates the Secretary may use such other related information available from reputable
sources as may seem appropriate,regardless of the data's point or period of time and shall use the best judgement
possible in adjusting such data to reflect the same point or period of time as the overall data from which the Indian
tribes are being deducted,so that such deduction shall not create an imbalance with those overall data.
(e)Amounts remaining after closeout of a grant which are required to be returned to HUD under the provisions of
§570.509,Grant closeout procedures,shall be considered as funds available for reallocation unless the appropriation
under which the funds were provided to the Department has lapsed.
[53 FR 34437,Sept.6, 1988,as amended at 68 FR 69582,Dec. 12,2003;69 FR 32778,June 10,2004]
§570.5 Waivers.
HUD's authority for the waiver of regulations and for the suspension of requirements to address damage in a
Presidentially declared disaster area is described in 24 CFR part 5 and in section 122 of the Act,respectively.
[61 FR 11476, Mar.20, 1996]
Subpart B [Reserved]
3
10
Subpart C—Eligible Activities
Source: 53 FR 34439, Sept. 6, 1988, unless otherwise noted.
§570.200 General policies.
(a)Determination of eligibility.An activity may be assisted in whole or in part with CDBG funds only if all of the
following requirements are met:
(1)Compliance with section 105 of the Act. Each activity must meet the eligibility requirements of section 105 of the
Act as further defined in this subpart.
(2)Compliance with national objectives. Grant recipients under the Entitlement and HUD-administered Small Cities
programs and recipients of insular area funds under section 106 of the Act must certify that their projected use of
funds has been developed so as to give maximum feasible priority to activities which will carry out one of the national
objectives of benefit to low-and moderate-income families or aid in the prevention or elimination of slums or blight.
The projected use of funds may also include activities that the recipient certifies are designed to meet other
community development needs having a particular urgency because existing conditions pose a serious and
immediate threat to the health or welfare of the community where other financial resources are not available to meet
such needs.Consistent with the foregoing,each recipient under the Entitlement or HUD-administered Small Cities
programs,and each recipient of insular area funds under section 106 of the Act must ensure and maintain evidence
that each of its activities assisted with CDBG funds meets one of the three national objectives as contained in its
certification.Criteria for determining whether an activity addresses one or more of these objectives are found in
§570.208.
(3)Compliance with the primary objective.The primary objective of the Act is described in section 101(c)of the Act.
Consistent with this objective,entitlement recipients,non-entitlement CDBG grantees in Hawaii,and recipients of
insular area funds under section 106 of the Act must ensure that,over a period of time specified in their certification
not to exceed three years,not less than 70 percent of the aggregate of CDBG fund expenditures shall be for activities
meeting the criteria under§570.208(a)or under§570.208(dx5)or(6)for benefiting low-and moderate-income
persons.For grants under section 107 of the Act,insular area recipients must meet this requirement for each
separate grant.See§570.420(dx3)for additional discussion of the primary objective requirement for insular areas
funded under section 106 of the Act.The requirements for the HUD-administered Small Cities program in New York
are at§570.420(d)(2).In determining the percentage of funds expended for such activities:
(i)Cost of administration and planning eligible under§570.205 and§570.206 will be assumed to benefit low and
moderate income persons in the same proportion as the remainder of the CDBG funds and,accordingly shall be
excluded from the calculation;
(ii)Funds deducted by HUD for repayment of urban renewal temporary loans pursuant to§570.802(b)shall be
excluded;
(iii)Funds expended for the repayment of loans guaranteed under the provisions of subpart M shall also be excluded;
(iv)Funds expended for the acquisition,new construction or rehabilitation of property for housing that qualifies under
§570.208(aX3)shall be counted for this purpose but shall be limited to an amount determined by multiplying the total
cost(including CDBG and non-CDBG costs)of the acquisition,construction or rehabilitation by the percent of units in
such housing to be occupied by low and moderate income persons.
(v)Funds expended for any other activities qualifying under§570.208(a)shall be counted for this purpose in their
entirety.
(4)Compliance with environmental review procedures.The environmental review procedures set forth at 24 CFR part
58 must be completed for each activity(or project as defined in 24 CFR part 58),as applicable.
(5)Cost principles. Costs incurred,whether charged on a direct or an indirect basis,must be in conformance with
OMB Circulars A-87,"Cost Principles for State,Local and Indian Tribal Governments";A-122,"Cost Principles for
11
Non-profit Organizations";or A-21,"Cost Principles for Educational Institutions,"as applicable.i All items of cost
listed in Attachment B of these Circulars that require prior Federal agency approval are allowable without prior
approval of HUD to the extent they comply with the general policies and principles stated in Attachment A of such
circulars and are otherwise eligible under this subpart C,except for the following:
iThese circulars are available from the American Communities Center by calling the following toll-free
numbers: (800)998-9999 or(800)483-2209(TDD).
(i)Depreciation methods for fixed assets shall not be changed without HUD's specific approval or,if charged through
a cost allocation plan,the Federal cognizant agency.
(ii)Fines and penalties(including punitive damages)are unallowable costs to the CDBG program.
(iii)Pre-award costs are limited to those authorized under paragraph(h)of this section.
(b)Special policies governing facilities.The following special policies apply to:
(1)Facilities containing both eligible and ineligible uses.A public facility otherwise eligible for assistance under the
CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible
uses,if:
(i)The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area
within the larger facility;and
(ii)The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct
from the overall costs of the multiple-use building and/or facility.
4
Allowable costs are limited to those attributable to the eligible portion of the building or facility.
(2)Fees for use of facilities. Reasonable fees may be charged for the use of the facilities assisted with CDBG funds,
but charges such as excessive membership fees,which will have the effect of precluding low and moderate income
persons from using the facilities,are not permitted.
(c)Special assessments under the CDBG program. The following policies relate to special assessments under the
CDBG program:
(1)Definition of special assessment.The term"special assessment"means the recovery of the capital costs of a
public improvement,such as streets,water or sewer lines,curbs,and gutters,through a fee or charge levied or filed
as a lien against a parcel of real estate as a direct result of benefit derived from the installation of a public
improvement,or a one-time charge made as a condition of access to a public improvement.This term does not relate
to taxes,or the establishment of the value of real estate for the purpose of levying real estate,property,or ad valorem
taxes,and does not include periodic charges based on the use of a public improvement,such as water or sewer user
charges,even if such charges include the recovery of all or some portion of the capital costs of the public
improvement.
(2)Special assessments to recover capital costs.Where CDBG funds are used to pay all or part of the cost of a
public improvement,special assessments may be imposed as follows:
(i)Special assessments to recover the CDBG funds may be made only against properties owned and occupied by
persons not of low and moderate income.Such assessments constitute program income.
(ii)Special assessments to recover the non-CDBG portion may be made provided that CDBG funds are used to pay
the special assessment in behalf of all properties owned and occupied by low and moderate income persons;except
that CDBG funds need not be used to pay the special assessments in behalf of properties owned and occupied by
moderate income persons if the grant recipient certifies that it does not have sufficient CDBG funds to pay the
assessments in behalf of all of the low and moderate income owner-occupant persons.Funds collected through such
special assessments are not program income.
12
(3)Public improvements not initially assisted with CDBG funds. The payment of special assessments with CDBG
funds constitutes CDBG assistance to the public improvement.Therefore,CDBG funds may be used to pay special
assessments provided:
(i)The installation of the public improvements was carried out in compliance with requirements applicable to activities
assisted under this part including environmental,citizen participation and Davis-Bacon requirements;
(ii)The installation of the public improvement meets a criterion for national objectives in§570.208(ax1),(b),or(c);
and
(iii)The requirements of§570.200(c)(2)(ii)are met.
(d)Consultant activities. Consulting services are eligible for assistance under this part for professional assistance in
program planning,development of community development objectives,and other general professional guidance
relating to program execution.The use of consultants is govemed by the following:
(1)Employer-employee type of relationship. No person providing consultant services in an employer-employee type
of relationship shall receive more than a reasonable rate of compensation for personal services paid with CDBG
funds. In no event,however,shall such compensation exceed the equivalent of the daily rate paid for Level IV of the
Executive Schedule.Such services shall be evidenced by written agreements between the parties which detail the
responsibilities,standards,and compensation.
(2)Independent contractor relationship. Consultant services provided under an independent contractor relationship
are governed by the procurement requirements in 24 CFR 85.36,and are not subject to the compensation limitation
of Level IV of the Executive Schedule.
(e)Recipient determinations required as a condition of eligibility. In several instances under this subpart,the eligibility
of an activity depends on a special local determination.Recipients shall maintain documentation of all such
determinations.A written determination is required for any activity carried out under the authority of§§570.201(f),
570.201(i)(2),570.201(p),570.201(q),570.202(bX3),570.206(f),570.209,570.210,and 570.309.
(f)Means of carrying out eligible activities.(1)Activities eligible under this subpart,other than those authorized under
§570.204(a),may be undertaken,subject to local law:
(i)By the recipient through:
(A)Its employees,or
(B)Procurement contracts govemed by the requirements of 24 CFR 85.36;or
(ii)Through loans or grants under agreements with subrecipients,as defined at§570.500(c);or
(iii)By one or more public agencies,including existing local public agencies,that are designated by the chief
executive officer of the recipient.
(2)Activities made eligible under§570.204(a)may only be undertaken by entities specified in that section.
(g)Limitation on planning and administrative costs. No more than 20 percent of the sum of any grant,plus program
income,shall be expended for planning and program administrative costs,as defined in§§570.205 and 507.206,
respectively. Recipients of entitlement grants under subpart D of this part shall conform with this requirement by
limiting the amount of CDBG funds obligated for planning plus administration during each program year to an amount
no greater than 20 percent of the sum of its entitlement grant made for that program year(if any)plus the program
income received by the recipient and its subrecipients(if any)during that program year.
(h)Reimbursement for preaward costs.The effective date of the grant agreement is the program year start date or
the date that the consolidated plan is received by HUD,whichever is later.For a Section 108 loan guarantee,the
5
13
effective date of the grant agreement is the date of HUD execution of the grant agreement amendment for the
particular loan guarantee commitment.
(1)Prior to the effective date of the grant agreement,a recipient may incur costs or may authorize a subrecipient to
incur costs,and then after the effective date of the grant agreement pay for those costs using its CDBG funds,
provided that:
(i)The activity for which the costs are being incurred is included,prior to the costs being incurred,in a consolidated
plan action plan,an amended consolidated plan action plan,or an application under subpart M of this part,except
that a new entitlement grantee preparing to receive its first allocation of CDBG funds may incur costs necessary to
develop its consolidated plan and undertake other administrative actions necessary to receive its first grant,prior to
the costs being included in its consolidated plan;
(ii)Citizens are advised of the extent to which these pre-award costs will affect future grants;
(iii)The costs and activities funded are in compliance with the requirements of this part and with the Environmental
Review Procedures stated in 24 CFR part 58;
(iv)The activity for which payment is being made complies with the statutory and regulatory provisions in effect at the
time the costs are paid for with CDBG funds;
(v)CDBG payment will be made during a time no longer than the next two program years following the effective date
of the grant agreement or amendment in which the activity is first included;and
(vi)The total amount of pre-award costs to be paid during any program year pursuant to this provision is no more
than the greater of 25 percent of the amount of the grant made for that year or$300,000.
(2)Upon the written request of the recipient,HUD may authorize payment of pre-award costs for activities that do not
meet the criteria at paragraph(h)(1)(v)or(hx1 Xvi)of this section,if HUD determines,in writing,that there is good
cause for granting an exception upon consideration of the following factors,as applicable:
(i)Whether granting the authority would result in a significant contribution to the goals and purposes of the CDBG
program;
(ii)Whether failure to grant the authority would result in undue hardship to the recipient or beneficiaries of the activity;
(iii)Whether granting the authority would not result in a violation of a statutory provision or any other regulatory
provision;
(iv)Whether circumstances are clearly beyond the recipient's control;or
(v)Any other relevant considerations.
(i)Urban Development Action Grant. Grant assistance may be provided with Urban Development Action Grant funds,
subject to the provisions of subpart G,for:
(1)Activities eligible for assistance under this subpart;and
(2)Notwithstanding the provisions of§570.207,such other activities as the Secretary may determine to be consistent
with the purposes of the Urban Development Action Grant program.
(j)Faith-based activities. (1)Organizations that are religious or faith-based are eligible,on the same basis as any
other organization,to participate in the CDBG program.Neither the Federal government nor a State or local
government receiving funds under CDBG programs shall discriminate against an organization on the basis of the
organization's religious character or affiliation.
2)Organizations that are directly funded under the CDBG program may not engage in inherently religious activities,
such as worship,religious instruction,or proselytization,as part of the programs or services funded under this part. If
an organization conducts such activities,the activities must be offered separately,in time or location,from the
programs or services funded under this part,and participation must be voluntary for the beneficiaries of the
HUDfunded
programs or services.
(3)A religious organization that participates in the CDBG program will retain its independence from Federal,State,
and local governments,and may continue to carry out its mission,including the definition,practice,and expression of
its religious beliefs,provided that it does not use direct CDBG funds to support any inherently religious activities,such
as worship,religious instruction,or proselytization.Among other things,faithbased organizations may use space in
their facilities to provide CDBG-funded services,without removing religious art,icons,scriptures,or other religious
symbols.In addition,a CDBG-funded religious organization retains its authority over its internal governance,and it
may retain religious terms in its organization's name,select its board members on a religious basis,and include
religious references in its organization's mission statements and other governing documents.
(4)An organization that participates in the CDBG program shall not,in providing program assistance,discriminate
against a program beneficiary or prospective program beneficiary on the basis of religion or religious belief.
(5)CDBG funds may not be used for the acquisition,construction,or rehabilitation of structures to the extent that
those structures are used for inherently religious activities.CDBG funds may be used for the acquisition,construction,
or rehabilitation of structures only to the extent that those structures are used for conducting eligible activities under
this part.Where a structure is used for both eligible and inherently religious activities,CDBG funds may not exceed
the cost of those portions of the acquisition,construction,or rehabilitation that are attributable to eligible activities in
accordance with the cost accounting requirements applicable to CDBG funds in this part.Sanctuaries,chapels,or
other rooms that a CDBG-funded religious congregation uses as its principal place of worship,however,are ineligible
for CDBG-funded improvements. Disposition of real property after the term of the grant,or any change in use of the
property during the term of the grant,is subject to government-wide regulations governing real property disposition
6
see 24 CFR parts 84 and 85).
(6)If a State or local government voluntarily contributes its own funds to supplement federally funded activities,the
State or local government has the option to segregate the Federal funds or commingle them.However,if the funds
are commingled,this section applies to all of the commingled funds.
[53 FR 34439,Sept.6, 1988,as amended at 54 FR 47031,Nov.8, 1989;57 FR 27119,June 17, 1992;60 FR 1943,
Jan.5, 1995;60 FR 17445,Apr.6, 1995;60 FR 56910,Nov.9, 1995;61 FR 11476,Mar.20, 1996;61 FR 18674,
Apr.29, 1996;65 FR 70215,Nov.21,2000;68 FR 56404,Sept.30,2003;69 FR 32778,June 10,2004;70 FR
76369, Dec.23,2005;72 FR 46370,Aug. 17,2007]
§570.201 Basic eligible activities.
CDBG funds may be used for the following activities:
(a)Acquisition.Acquisition in whole or in part by the recipient,or other public or private nonprofit entity,by purchase,
long-term lease,donation,or otherwise,of real property(including air rights,water rights,rights-of-way,easements,
and other interests therein)for any public purpose,subject to the limitations of§570.207.
(b)Disposition. Disposition,through sale,lease,donation,or otherwise,of any real property acquired with CDBG
funds or its retention for public purposes, including reasonable costs of temporarily managing such property or
property acquired under urban renewal,provided that the proceeds from any such disposition shall be program
income subject to the requirements set forth in§570.504.
(c)Public facilities and improvements.Acquisition,construction, reconstruction,rehabilitation or installation of public
facilities and improvements,except as provided in§570.207(a),carried out by the recipient or other public or private
nonprofit entities.(However,activities under this paragraph may be directed to the removal of material and
architectural barriers that restrict the mobility and accessibility of elderly or severely disabled persons to public
facilities and improvements,including those provided for in§570.207(ax1).)In undertaking such activities,design
features and improvements which promote energy efficiency may be included.Such activities may also include the
execution of architectural design features,and similar treatments intended to enhance the aesthetic quality of
15
facilities and improvements receiving CDBG assistance,such as decorative pavements,railings,sculptures,pools of
water and fountains,and other works of art. Facilities designed for use in providing shelter for persons having special
needs are considered public facilities and not subject to the prohibition of new housing construction described in
§570.207(bX3).Such facilities include shelters for the homeless;convalescent homes;hospitals,nursing homes;
battered spouse shelters;halfway houses for run-away children,drug offenders or parolees;group homes for
mentally retarded persons and temporary housing for disaster victims.In certain cases,nonprofit entities and
subrecipients including those specified in§570.204 may acquire title to public facilities.When such facilities are
owned by nonprofit entities or subrecipients,they shall be operated so as to be open for use by the general public
during all normal hours of operation. Public facilities and improvements eligible for assistance under this paragraph
are subject to the policies in§570.200(b).
(d)Clearance and remediation activities. Clearance,demolition,and removal of buildings and improvements,
including movement of structures to other sites and remediation of known or suspected environmental contamination.
Demolition of HUD-assisted or HUD-owned housing units may be undertaken only with the prior approval of HUD.
Remediation may include project-specific environmental assessment costs not otherwise eligible under§570.205.
(e)Public services. Provision of public services(including labor,supplies,and materials)including but not limited to
those concerned with employment,crime prevention,child care, health,drug abuse,education,fair housing
counseling,energy conservation,welfare(but excluding the provision of income payments identified under
§570.207(b)(4)),homebuyer downpayment assistance,or recreational needs.To be eligible for CDBG assistance,a
public service must be either a new service or a quantifiable increase in the level of an existing service above that
which has been provided by or on behalf of the unit of general local government(through funds raised by the unit or
received by the unit from the State in which it is located)in the 12 calendar months before the submission of the
action plan.(An exception to this requirement may be made if HUD determines that any decrease in the level of a
service was the result of events not within the control of the unit of general local government.)The amount of CDBG
funds used for public services shall not exceed paragraphs(e)(1)or(2)of this section,as applicable:
(1)The amount of CDBG funds used for public services shall not exceed 15 percent of each grant,except that for
entitlement grants made under subpart D of this part,the amount shall not exceed 15 percent of the grant plus 15
percent of program income,as defined in§570.500(a).For entitlement grants under subpart D of this part,
compliance is based on limiting the amount of CDBG funds obligated for public service activities in each program
year to an amount no greater than 15 percent of the entitlement grant made for that program year plus 15 percent of
the program income received during the grantee's immediately preceding program year.
(2)A recipient which obligated more CDBG funds for public services than 15 percent of its grant funded from Federal
fiscal year 1982 or 1983 appropriations(excluding program income and any assistance received under Public Law
98-8),may obligate more CDBG funds than allowable under paragraph(e)(1)of this section,so long as the total
amount obligated in any program year does not exceed:
(i)For an entitlement grantee,15%of the program income it received during the preceding program year;plus
(ii)A portion of the grant received for the program year which is the highest of the following amounts:
(A)The amount determined by applying the percentage of the grant it obligated for public services in the 1982
program year against the grant for its current program year;
(B)The amount determined by applying the percentage of the grant it obligated for public services in the 1983
program year against the grant for its current program year;
7
(C)The amount of funds it obligated for public services in the 1982 program year;or,
(D)The amount of funds it obligated for public services in the 1983 program year.
(f)Interim assistance.(1)The following activities may be undertaken on an interim basis in areas exhibiting
objectively determinable signs of physical deterioration where the recipient has determined that immediate action is
necessary to arrest the deterioration and that permanent improvements will be carried out as soon as practicable:
(i)The repairing of streets,sidewalks,parks,playgrounds,publicly owned utilities,and public buildings;and
16
(ii)The execution of special garbage,trash,and debris removal,including neighborhood cleanup campaigns,but not
the regular curbside collection of garbage or trash in an area.
(2)In order to alleviate emergency conditions threatening the public health and safety in areas where the chief
executive officer of the recipient determines that such an emergency condition exists and requires immediate
resolution,CDBG funds may be used for.
(i)The activities specified in paragraph(f)(1)of this section,except for the repair of parks and playgrounds;
(ii)The clearance of streets,including snow removal and similar activities,and
(iii)The improvement of private properties.
(3)All activities authorized under paragraph(f)(2)of this section are limited to the extent necessary to alleviate
emergency conditions.
(g)Payment of non-Federal share. Payment of the non-Federal share required in connection with a Federal grant-
inaid
program undertaken as part of CDBG activities,provided,that such payment shall be limited to activities
otherwise eligible and in compliance with applicable requirements under this subpart.
(h)Urban renewal completion. Payment of the cost of completing an urban renewal project funded under title I of the
Housing Act of 1949 as amended.Further information regarding the eligibility of such costs is set forth in§570.801.
(i)Relocation. Relocation payments and other assistance for permanently and temporarily relocated individuals
families,businesses,nonprofit organizations,and farm operations where the assistance is(1)required under the
provisions of§570.606(b)or(c);or(2)determined by the grantee to be appropriate under the provisions of
§570.606(d).
(j)Loss of rental income. Payments to housing owners for losses of rental income incurred in holding,for temporary
periods,housing units to be used for the relocation of individuals and families displaced by program activities assisted
under this part.
(k)Housing services. Housing services,as provided in section 105(a)(21)of the Act(42 U.S.C.5305(a)(21)).
(I)Privately owned utilities. CDBG funds may be used to acquire,construct,reconstruct,rehabilitate,or install the
distribution lines and facilities of privately owned utilities,including the placing underground of new or existing
distribution facilities and lines.
(m)Construction of housing. CDBG funds may be used for the construction of housing assisted under section 17 of
the United States Housing Act of 1937.
(n)Homeownership assistance. CDBG funds may be used to provide direct homeownership assistance to low-or
moderate-income households in accordance with section 105(a)of the Act.
(o)(1)The provision of assistance either through the recipient directly or through public and private organizations,
agencies,and other subrecipients(including nonprofit and for-profit subrecipients)to facilitate economic development
by:
(i)Providing credit,including,but not limited to,grants,loans,loan guarantees,and other forms of financial support,
for the establishment,stabilization,and expansion of microenterprises;
(ii)Providing technical assistance,advice,and business support services to owners of microenterprises and persons
developing microenterprises;and
(iii)Providing general support,including,but not limited to,peer support programs,counseling,child care,
transportation,and other similar services,to owners of microenterprises and persons developing microenterprises.
17
(2)Services provided this paragraph(o)shall not be subject to the restrictions on public services contained in
paragraph(e)of this section.
(3)For purposes of this paragraph(o),"persons developing microenterprises"means such persons who have
expressed interest and who are,or after an initial screening process are expected to be,actively working toward
developing businesses,each of which is expected to be a microenterprise at the time it is formed.
(4)Assistance under this paragraph(o)may also include training,technical assistance,or other support services to
increase the capacity of the recipient or subrecipient to carry out the activities under this paragraph(o).
(p)Technical assistance. Provision of technical assistance to public or nonprofit entities to increase the capacity of
such entities to carry out eligible neighborhood revitalization or economic development activities.(The recipient must
determine,prior to the provision of the assistance,that the activity for which it is attempting to build capacity would be
eligible for assistance under this subpart C,and that the national objective claimed by the grantee for this assistance
can reasonably be expected to be met once the entity has received the technical assistance and undertakes the
activity.)Capacity building for private or public entities(including grantees)for other purposes may be eligible under
§570.205.
(q)Assistance to institutions of higher education. Provision of assistance by the recipient to institutions of higher
education when the grantee determines that such an institution has demonstrated a capacity to carry out eligible
8
activities under this subpart C.
[53 FR 34439,Sept.6, 1988,as amended at 53 FR 31239,Aug. 17, 1988;55 FR 29308,July 18, 1990;57 FR
27119,June 17, 1992;60 FR 1943,Jan.5, 1995;60 FR 56911, Nov.9, 1995;61 FR 18674,Apr.29, 1996;65 FR
70215, Nov.21,2000;67 FR 47213,July 17,2002;71 FR 30034, May 24,2006j
§570.202 Eligible rehabilitation and preservation activities.
(a) Types of buildings and improvements eligible for rehabilitation assistance.CDBG funds may be used to finance
the rehabilitation of:
(1)Privately owned buildings and improvements for residential purposes;improvements to a single-family residential
property which is also used as a place of business,which are required in order to operate the business,need not be
considered to be rehabilitation of a commercial or industrial building,if the improvements also provide general benefit
to the residential occupants of the building;
(2)Low-income public housing and other publicly owned residential buildings and improvements;
(3)Publicly or privately owned commercial or industrial buildings,except that the rehabilitation of such buildings
owned by a private for-profit business is limited to improvement to the exterior of the building,abatement of asbestos
hazards,lead-based paint hazard evaluation and reduction,and the correction of code violations;
(4)Nonprofit-owned nonresidential buildings and improvements not eligible under§570.201(c);and
(5)Manufactured housing when such housing constitutes part of the community's permanent housing stock.
(b) Types of assistance.CDBG funds may be used to finance the following types of rehabilitation activities,and
related costs,either singly,or in combination,through the use of grants,loans,loan guarantees,interest
supplements,or other means for buildings and improvements described in paragraph(a)of this section,except that
rehabilitation of commercial or industrial buildings is limited as described in paragraph(a)(3)of this section.
(1)Assistance to private individuals and entities,including profit making and nonprofit organizations,to acquire for the
purpose of rehabilitation,and to rehabilitate properties,for use or resale for residential purposes;
(2)Labor,materials,and other costs of rehabilitation of properties,including repair directed toward an accumulation
of deferred maintenance,replacement of principal fixtures and components of existing structures,installation of
security devices, including smoke detectors and dead bolt locks,and renovation through alterations,additions to,or
18
enhancement of existing structures and improvements,abatement of asbestos hazards(and other contaminants)in
buildings and improvements that may be undertaken singly,or in combination;
(3)Loans for refinancing existing indebtedness secured by a property being rehabilitated with CDBG funds if such
financing is determined by the recipient to be necessary or appropriate to achieve the locality's community
development objectives;
(4)Improvements to increase the efficient use of energy in structures through such means as installation of storm
windows and doors,siding,wall and attic insulation,and conversion,modification,or replacement of heating and
cooling equipment,including the use of solar energy equipment;
(5)Improvements to increase the efficient use of water through such means as water savings faucets and shower
heads and repair of water leaks;
(6)Connection of residential structures to water distribution lines or local sewer collection lines;
(7)For rehabilitation carried out with CDBG funds,costs of:
(i)Initial homeowner warranty premiums;
(ii)Hazard insurance premiums,except where assistance is provided in the form of a grant;and
(iii)Flood insurance premiums for properties covered by the Flood Disaster Protection Act of 1973,pursuant to
§570.605.
(8)Costs of acquiring tools to be lent to owners,tenants,and others who will use such tools to carry out rehabilitation;
(9)Rehabilitation services,such as rehabilitation counseling,energy auditing,preparation of work specifications, loan
processing,inspections,and other services related to assisting owners,tenants,contractors,and other entities,
participating or seeking to participate in rehabilitation activities authorized under this section,under section 312 of the
Housing Act of 1964,as amended, under section 810 of the Act,or under section 17 of the United States Housing Act
of 1937;
(10)Assistance for the rehabilitation of housing under section 17 of the United States Housing Act of 1937;and
(11)Improvements designed to remove material and architectural barriers that restrict the mobility and accessibility of
elderly or severely disabled persons to buildings and improvements eligible for assistance under paragraph(a)of this
section.
(c)Code enforcement.Costs incurred for inspection for code violations and enforcement of codes(e.g.,salaries and
related expenses of code enforcement inspectors and legal proceedings,but not including the cost of correcting the
violations)in deteriorating or deteriorated areas when such enforcement together with public or private
improvements,rehabilitation,or services to be provided may be expected to arrest the decline of the area.
(d)Historic preservation. CDBG funds may be used for the rehabilitation,preservation or restoration of historic
properties,whether publicly or privately owned.Historic properties are those sites or structures that are either listed in
or eligible to be listed in the National Register of Historic Places,listed in a State or local inventory of historic places,
or designated as a State or local landmark or historic district by appropriate law or ordinance.Historic preservation,
however,is not authorized for buildings for the general conduct of government.
(e)Renovation of closed buildings. CDBG funds may be used to renovate closed buildings,such as closed school
buildings,for use as an eligible public facility or to rehabilitate such buildings for housing.
(f)Lead-based paint activities.Lead-based paint activities pursuant to§570.608.
9
[53 FR 34439,Sept.6, 1988;53 FR 41330,Oct.21, 1988,as amended at 60 FR 1944,Jan.5, 1995;60 FR 56911,
Nov.9, 1995;64 FR 50225,Sept. 15, 1999;71 FR 30035,May 24,2006]
§570.203 Special economic development activities.
A recipient may use CDBG funds for special economic development activities in addition to other activities authorized
in this subpart that may be carried out as part of an economic development project.Guidelines for selecting activities
to assist under this paragraph are provided at§570.209.The recipient must ensure that the appropriate level of public
benefit will be derived pursuant to those guidelines before obligating funds under this authority.Special activities
authorized under this section do not include assistance for the construction of new housing.Activities eligible under
this section may include costs associated with project-specific assessment or remediation of known or suspected
environmental contamination.Special economic development activities include:
(a)The acquisition,construction,reconstruction,rehabilitation or installation of commercial or industrial buildings,
structures,and other real property equipment and improvements,including railroad spurs or similar extensions.Such
activities may be carried out by the recipient or public or private nonprofit subrecipients.
(b)The provision of assistance to a private for-profit business,including,but not limited to,grants,loans,loan
guarantees,interest supplements,technical assistance,and other forms of support,for any activity where the
assistance is appropriate to carry out an economic development project,excluding those described as ineligible in
§570.207(a).In selecting businesses to assist under this authority,the recipient shall minimize,to the extent
practicable,displacement of existing businesses and jobs in neighborhoods.
(c)Economic development services in connection with activities eligible under this section,including,but not limited
to,outreach efforts to market available forms of assistance;screening of applicants;reviewing and underwriting
applications for assistance;preparation of all necessary agreements;management of assisted activities;and the
screening,referral,and placement of applicants for employment opportunities generated by CDBG-eligible economic
development activities,including the costs of providing necessary training for persons filling those positions.
[53 FR 34439,Sept.6,1988,as amended at 60 FR 1944,Jan.5,1995;71 FR 30035,May 24,2006]
§570.204 Special activities by Community-Based Development Organizations(CBDOs).
(a)Eligible activities.The recipient may provide CDBG funds as grants or loans to any CBDO qualified under this
section to carry out a neighborhood revitalization,community economic development,or energy conservation project.
The funded project activities may include those listed as eligible under this subpart,and,except as described in
paragraph(b)of this section,activities not otherwise listed as eligible under this subpart.For purposes of qualifying
as a project under paragraphs(a)(1),(a)(2),and(a)(3)of this section,the funded activity or activities may be
considered either alone or in concert with other project activities either being carried out or for which funding has
been committed.For purposes of this section:
(1)Neighborhood revitalization project includes activities of sufficient size and scope to have an impact on the decline
of a geographic location within the jurisdiction of a unit of general local government(but not the entire jurisdiction)
designated in comprehensive plans,ordinances,or other local documents as a neighborhood,village,or similar
geographical designation;or the entire jurisdiction of a unit of general local government which is under 25,000
population;
(2)Community economic development project includes activities that increase economic opportunity,principally for
persons of low-and moderate-income,or that stimulate or retain businesses or permanent jobs,including projects
that include one or more such activities that are clearly needed to address a lack of affordable housing accessible to
existing or planned jobs and those activities specified at 24 CFR 91.1(a)(1)(iii);activities under this paragraph may
include costs associated with project-specific assessment or remediation of known or suspected environmental '
contamination;
(3)Energy conservation project includes activities that address energy conservation,principally for the benefit of the
residents of the recipient's jurisdiction;and
(4)To carry out a project means that the CBDO undertakes the funded activities directly or through contract with an
entity other than the grantee,or through the provision of financial assistance for activities in which it retains a direct
and controlling involvement and responsibilities.
(b)Ineligible activities. Notwithstanding that CBDOs may carry out activities that are not otherwise eligible under this
subpart,this section does not authorize:
(1)Carrying out an activity described as ineligible in§570.207(a);
(2)Carrying out public services that do not meet the requirements of§570.201(e),except that:
(i)Services carried out under this section that are specifically designed to increase economic opportunities through
job training and placement and other employment support services,including,but not limited to,peer support
programs,counseling,child care,transportation,and other similar services;and
(ii)Services of any type carried out under this section pursuant to a strategy approved by HUD under the provisions
of 24 CFR 91.215(e)shall not be subject to the limitations in§570.201(eX1)or(2),as applicable;
(3)Providing assistance to activities that would otherwise be eligible under§570.203 that do not meet the
requirements of§570.209;or
(4)Carrying out an activity that would otherwise be eligible under§570.205 or§570.206,but that would result in the
recipient's exceeding the spending limitation in§570.200(g).
(c)Eligible CBDOs.(1)A CBDO qualifying under this section is an organization which has the following
characteristics:
10
CDBG Regulations 24 CFR Part 570
Pages 11-156 will be furnished upon request
HOUSING&COMMUNITY DEVELOPMENT DEPARTMENT
Tab 2
"Exhibit 99
D
Partici: ant Income
Eli 'bili ty Form
Augusta Housing&Community Development Department
925 Laney-Walker Boulevard,3rd Floor-Augusta,Georgia 30901
(706)821-1797—Fax(706)821-1784—TDD(706)821-1783
www.augustaga.gov °;
EXHIBIT "D"
PARTICIPANT INCOME ELIGIBILITY FORM
(Documentation of Income Must be Attached to this Form-See#8)
The information requested below is confidential. This information is used only to track financial
and social status under federal regulations as required for the funding of programs by the U.S.
Department of Housing and Urban Development (HUD) and administered by the Housing and
Community Development Department on behalf of the City of Augusta. Programs requiring this
information include the Community Development Block Grant Program, Emergency Shelter Grant
Program, HOME and Housing Opportunities for Persons With AIDS.
Client Name:
(If services are provided to the child,please put child's name above.)
Client Address:
Parent Name(If applicable):
Neighborhood: Phone#: (Work) Home
1. Number of persons in household:
2. Total annual income of ALL persons residing in household: $
(Show calculation: Monthly income$ x(12 or 26)=$ )
3. Race:
[ ] White [ ] Black/African American [ ] Black/African American&White
[ ] Asian [ ] Asian&White [ ] Am.Indian/Alaskan Native&Black/African Am.
[ ] Am. Indian/Alaskan Native [ ] Native Hawaiian/Other Pacific Islander
[ ] Am. Indian/Alaskan Native&White [ ] Other Multi-Racial
[ ] Hispanic(of the race identified,check this block if the person is of Hispanic origin
4. Sex: [ ] Male [ ] Female
5. Female Head of Household? [ ] Yes [ ] No
6. Client 62 or older? [ ] Yes [ ] No
7. Disabled? [ ] Yes [ ] No
8. Attach Income verification(s) [ ] Yes [ ] No
(Verification of Income MUST BE ATTACHED. Examples of income verifications include check stubs,W-2 form,SSI,TANF,
Social Security,etc.)
Client Signature Witness Date
FOR OFFICE USE ONLY:
(Circle number of persons in household and indicate income by circling column a, b,c or d horizontally.)
Year 2018 Income Limits
Family Size a. Extremely Low Income b. Low Income c. Low/Moderate Income d. Not LM
(persons) (0%-30%of Median) (31%-50%of Median) (51%-80%of Median)
1 $0- 13,100 $13,101 -21,850 $21,851 -34,900 $34,901+
2 $0- 16,460 $16,461 -24,950 $24,951 -39,900 $39,901+
3 $0-20,780 $20,781 -28,050 $28,051 -44,900 $44,901+
4 $0-25,100 $25,101 -31,150 $31,151 -49,850 $49,851+
5 $0-29,420 $29,421 -33,650 $33,651 -53,850 $53,851+
6 $0-33,740 $33,741 -36,150 $36,151 -57,850 $57,851+
7 $0-38,060 $38,061 -38,650 $38,651 -61,850 $61,851+
-
8 $0-41,150 $0-$41,150 $41,151 -65,850 $65,851+
CDBG 2018