COSCDA CPD Policy Update

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					CPD Policy Update
 COSCDA Annual Meeting
      Gulfport, MS
   September 19, 2012
CPD Today
• Assistant Secretary Marquez departed May 2012
• Mark Johnston, DAS for Special Needs, has been
  appointed as Acting Assistant Secretary for remainder
  of term
• Cliff Taffet remains as General Deputy Assistant
• Yolanda Chavez remains as DAS for Grant Programs
• Ann Oliva now Acting DAS for Special Needs

FY 2012 Operations

• FY 2012 formula allocations announced in January
  2012 consistent with 60 day provision of law
• Field offices are fully caught up on reviews of action
  plans, making grants in timely manner
• CPD has maintained monitoring schedule at field
  office level despite tight budgetary constraints
• Funding constraints having impact on ability of field
  offices to hire staff and travel
• FY 12 formula funding level - $2.948 billion
• Represents 26% reduction in comparison to FY 10
• $300 million from CDF account for disaster recovery
  purposes (additional $100 million outside budget
• $400 million in CDBG DR allocated in January 2012 to
  17 grantees (8 states and 9 local governments)
CDBG in FY 13
• House has already 6 month continuing resolution for
  FY 2013 (H. Res. 117)
• Senate action expected this week
• Provides funding based on FY 2012 level BEFORE
  deduction of $300 million in CDBG DR funding
• Projected amount to be available for CDBG formula
  allocation is $3.248 billion
• House and Senate Appropriations Committees,
  respectively, provided $3.34 billion and $3.1 billion
  for CDBG formula
Congressional Interest in CDBG
• FY 12 appropriation called for two reviews:
   • GAO to review best practices in formula programs
   • HUD to report to committees on data systems
• House Appropriations Surveys and Investigations on
  administrative/planning costs
• GAO also reviewing admin/planning costs
• House Appropriations staff questions on activity
  delivery costs, grandfathered communities, public
  service cap, American Community Survey
CDBG Policy Considerations
• Guidance issued on CDBG-R and NSP 1 closeouts,
  addressing open activities cites by OIG audit,
  voluntary grant reductions,
• Preparing guidance on mixed use economic
  development, activities jointly funded by
  entitlements and states, use of ACS data for low-mod
  area benefit
• Evaluating changes to IDIS performance
  measurement structure
• Other IDIS upgrades
CDBG Issues – IG Audit
• Formally issued October 31, 2011
• “HUD did not adequately use its System (IDIS) to
  provide oversight of activities under the Block Grant
• Unaware of how grantees used $67 million to fund
  more than 1,300 cancelled activities
• Lacked oversight of almost $3 billion funding more
  than 20,000 long-standing open activities

CDBG Issues – IG Audit
• Some seriously bad actors
   • 46 grantees accounted for 11,647 open activities
   • 64 grantees accounted for $2 billion in open
• Have reduced open activities to 2,288 or 11.2% of
  original 20,000, representing 16.09% of funds
• Have reduced canceled/drawn activities to 238,
  representing 27.83% of funds
• Guidance to field offices to help on tough issues

CDBG Issues – ACS Data

• FY 2012 allocations used American Community
  Survey (ACS) data for 2005-2009 in place of 2000
  Census data (plus 2010 population count)
• Census long form discontinued
• Significant funding changes for many grantees due to
  new data and reduced appropriation
• HUD correctly applied available data consistent with
  statutory directives
• Path of appeal is to Census Bureau
Section 108
• $240 million in guarantee authority in FY 2012
• FY 2013 Continuing Resolution would effectively
  provide same authority level
• FY 2013 Administration request was $500 million with
  switch to fee-based approach
• At committee level, Senate adopted Administration
  proposal while House provided credit subsidy
• HUD’s Policy Development and Research Office to
  issue report on Section 108 program shortly

NSP Status – September 10, 2012

• NSP 1 = $3.92 billion
   • 95.00% expended (112.42% obligated)
   • Grant amount must be expended by March 2013
• NSP2 = $1.93 billion
   • 75.51% expended
   • 54 of 56 Grantees met 50% expenditure mark
   • Grantees must expend 100% of grant amount by
     February 11, 2013

NSP Status
• NSP3 = $970 million
   • 18.8% expended
   • 50% of grant amount to be expended by March
      2013, 100% by March 2014
• Working on policies for transition after NSP
• Still have technical assistance available, especially for
Project Rebuild
• President Obama included $15 billion for Project Rebuild
  as part of American Jobs Act
• Request repeated as part of FY 2013 budget submission
• Introduced in both House and Senate
• Would improve upon and expand NSP
• $10 billion formula allocation to states and local
• $5 billion competition to include governmental partners
  but also non-profits and for-profits

• OneCPD replaces previous CPD approach to technical
• Borrows from and expands upon SNAPS and NSP TA
• Almost $70 million available across FY10-12
• Have already initiated several dozens of engagements
  from highly targeted to comprehensive
• CPD field offices are the access point

HOME Appropriations
• FY 2012 Appropriation - $1 Billion
   • Same as FY 1993 funding level
• FY 2013 Continuing Resolution provides $1 billion

• FY 2013 Administration Request - $1 Billion
   • House mark: $1.2 billion
   • Senate mark: $1.0 billion
   • $500,000 minimum qualification threshold to
     minimize new PJs qualifying at lower $335,000
FY12 HOME Appropriation
Imposed 4 provisions on 2012 HOME projects
   • Evaluation of Developer Capacity, Underwriting
     and Market Demand before committing funds;
   • Homebuyer Units remaining unsold 6 months
     after construction must be converted to rental;
   • Projects not completed 4 years after commitment
     must be terminated and funds repaid;
   • PJ must certify that CHDO receiving ‘12 funds has
     staff with demonstrated development capacity;
FY12 HOME Appropriation

• CPD Notice 12-07, Operating Guidance for
  Implementing FY 2012 Appropriation Requirements
  explains what the law requires
• HUD held 8 webinars on FY 2012 HOME provisions
• Archived webinars can be found at http:\
IDIS System Improvements
Went Live on May 4th
System flags for Projects:
    • In final draw for > 120 days
    • With an initial disbursement but no subsequent
      disbursement for > 180 days
    • Committed more than 4 years ago, but not

IDIS System Improvements
Required Certifications at Project Set-up:
   • CHDO Capacity
   • Assessment of Underwriting, Developer Capacity
     and Neighborhood Market Conditions

HOME Rulemaking

• Proposed Rule Published: December 16, 2011
• Public comments were due on February 14, 2012 –
  HUD received 320 comments
• Final rule has completed Departmental clearance and
  been sent to OMB
• Publication expected later this year
• HUD preparing to deliver classroom training and
  webinars subsequent to publication of final rule


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