Appropriations Update
The House and Senate have been in recess since late July but will return to DC on September 9 with little time to pass the FY25 spending bills. Congress will likely pass a short-term continuing resolution (CR) to keep federal agencies operating past the November elections. House conservatives are advocating for the CR to expire in 2025 to allow the new Administration to weigh in on the spending bills, but House and Senate appropriation leaders want the CR to expire in early November to allow them time to finish negotiations on the FY25 spending bills.
Both parties are preparing their policy agendas for the 119th Congress that starts in January 2025. The debt ceiling will return as an issue as the current agreement expires on January 1, 2025; leaving the Treasury Department scurrying to develop measures to avoid defaulting on its debt until Congress can reach agreement on the next steps forward. Such an agreement may, once again, contain budget caps on discretionary spending in a trade-off to lift the debt ceiling.
NCDA Submits HOME Program Comments
HUD released a notice of rulemaking on May 29 seeking comments on proposed changes to the HOME program that include revisions to the CHDO requirements, HOME rents, more flexibility for HOME TBRA programs, and simplified provisions for community land trusts, among other changes. Working through its Housing Subcommittee, NCDA submitted a letter to HUD outlining our responses to the range of questions listed in the rule.
Revisions to 2 CFR Part 200
On April 22, 2024, the Office of Management & Budget (OMB) issued a Final Rule updating and making some significant revisions to the OMB Guidance for Grants and Agreements (2 CFR part 200), which is now called the OMB Guidance for Federal Financial Assistance. The Final Rule is being revised and updated to incorporate recent OMB policy priorities related to Federal financial assistance and to reduce agency and recipient burden. Federal agencies are required to implement the new Guidance for all grants awarded after October 1, 2024. We anticipate that HUD will issue some additional guidance clarifying how the OMB Guidance will be implemented in specific HUD grant programs.
Among the changes likely to be of interest to NCDA members are the following:
- Data and Evaluation Costs: Recipients may charge evaluation activities to Federal grants as direct or indirect costs, if they are related to the Federal grant award.
- Community Engagement: Recipients are allowed to use Federal funds to support the effective administration of the relevant Federal program by undertaking community engagement activities.
- Competitive Grants: Notices of Funding Opportunities (NOFOs) must have an Executive Summary and be written in plain language.
- Procurement: Project Labor Agreements are allowed, and recipients may require construction contractors to use hiring preferences or goals for people residing in high-poverty areas, disadvantaged communities or high-unemployment census tracts.
- Equipment: Increases from $5,000 to $10,000 the value of equipment that at the end of the grant period “may be retained, sold, or otherwise disposed of with no further responsibility to the Federal agency”.
- Unused Supplies: Increases from $5,000 to $10,000 the value of unused supplies that recipients of Federal funds are required to sell at the end of the grant award period.
- Single Audit: Increases from $750,000 to $1,000,000 the level at which a recipient of Federal funds is required to conduct a single audit or a program specific audit.
- Fixed Amount Subawards: Increases from $250,000 to $500,000 the amount of fixed amount subawards that a recipient may provide with prior written approval from the Federal agency.
- Indirect Rate: Increases from 10% to 15% the maximum rate that recipients of Federal funds may use for indirect costs without negotiating an alternative rate with the relevant Federal agency.
For more information, please go here to view OMB’s Final Rule Reference Guides (12 pages) and here to view the final rule.
HUD Announces $250 Million Legacy Challenge to Develop Affordable Housing Through CDBG Section 108
HUD announced earlier this month that it will use $250 million in Section 108 loan guarantee authority to finance affordable housing projects in the following areas: infrastructure to support housing construction, preservation and rehabilitation of existing homes, manufactured housing, mixed-used developments, and loan pools to support housing development. CDBG grantees can borrow up to five times their current grant allocation through Section 108 backed financing. HUD will work with grantees to streamline CDBG program requirements, offer one on one TA (including underwriting assistance), and provide flexible financing terms. November 1 is the deadline to express an interest to HUD in participating in this challenge. HUD Section 108 staff are available at section 108@hud.gov to answer your questions and get the process started. More information is available here.
HUD Announces Second Round of PRO Housing Funding
On August 13, HUD announced the availability of $100 million in competitive grant funding through the Pathways to Removing Obstacles to Housing (PRO Housing) program. This is the second round of funding offered through the program. Eligible applicants include state and local governments, metropolitan planning organizations, and multi-jurisdictional entities. The funds can be used to identify and remove barriers to affordable housing production and preservation. The minimum grant size available is $1 million with grants being capped at $7 million. Round 2 includes an updated rating factor that reflects the FY24 appropriations act directive to prioritize applicants who can demonstrate progress to overcoming local barriers, primarily by having enacted local laws and improved local regulations and those communities that have an acute need for affordable housing. Applications are due October 15, 2024. More information is available through HUD’s Pro-Housing Round Two FAQs. HUD will host a webinar on September 4, 2024, at 3 pm ET, on lessons learned from the FY23 Pro-Housing NOFO. Earlier this summer, HUD awarded $85 million in PRO Housing funding to 21 entities through the first round of funding.
Advisory Council on Historic Preservation Section 106 Proposal
The Advisory Council on Historic Preservation (ACHP), the federal agency which advises the President and Congress on national historic preservation policy and administers the requirements of the National Historic Preservation Act, has developed a draft Program Comment on Accessible, Climate-Resilient, Connected Communities that would accelerate historic preservation review timelines by providing federal agencies with an alternate way to comply with their responsibilities under Section 106 of the National Historic Preservation Act. If adopted by ACHP, the Program Comment would make it much easier to renovate historic properties by exempting most interior renovation projects from the Section 106 review process. It would also allow sitework and façade projects to proceed with limited or no review, as well as speeding climate resiliency upgrades. NCDA has been invited by HUD to provide comments on the ACHP’s Program Comment. Please send your comments to Bob Gehret at bgehret@ncdaonline.org by September 20, 2024.
HUD Makes Modifications to the VASH Program
Earlier this month, HUD announced a series of changes to the Veterans Affairs Supportive Housing (VASH) program to improve access for more veterans experiencing homelessness. Veterans at 80% of the area median income (opposed to the current standard of 50% of AMI) will now be eligible to receive assistance. The value of veterans’ disability benefits will now be excluded from income calculations for determining eligibility. The modifications also provide greater flexibility for PHAs administering the VASH program by allowing them to provide VASH project-based contracts to units in VA facilities that serve families. They will also be allowed to approve exception payment standards up to 140 percent of the fair market rent and set a separate minimum rent policy that could include a zero dollar minimum rent for VASH participants.
Upcoming NCDA Training – New Course Added: Con Plan Primer
NCDA Leadership Institute
Management for Community Development Professionals Online
September 9-October 4
https://ncdaonline.regfox.com/
IDIS Basics Online
September 17-October 10
https://ncdaonline.regfox.com/
Consolidated Planning Primer
October 7-11
https://ncdaonline.regfox.com/
Subrecipient Management Basics Online
October 15-November 4
https://ncdaonline.regfox.com/
CDBG Advanced – Lafayette, LA
October 21-22
https://ncdaonline.regfox.com/
