24 C.F.R. Subpart H—Grant Administration
Title 24 - Housing and Urban Development
Grantees are responsible for ensuring that rental rehabilitation grants are administered in accordance with the requirements of this part and other applicable laws. A grantee may enter into a written agreement with another unit of State or local government or with a non-governmental entity to administer specified functions under its Rental Rehabilitation Program to the extent not prohibited by HUD. If the grantee is contracting with a non-governmental entity to administer its program or to provide other services, such as cash management responsibilities, the grantee shall follow the procurement standards of 24 CFR 85.36. The use of other governmental units or private contractors does not relieve the grantee of its responsibility for ensuring compliance with this part and other applicable laws. (a) Maximum amount. Any grantee may use not to exceed 10 percent of the grant amount initially obligated to the grantee for Federal Fiscal Year 1988 and later fiscal years for administrative costs eligible under paragraphs (b) and (c) of this section. Eligible grantees may draw down funds to pay for eligible administrative costs through HUD's C/MI System. (b) Eligibility. Eligible administrative costs are reasonable and necessary costs, as described in OMB Circular A–87, incurred by the grantee itself, or by a unit of general local government pursuant to a written cost-sharing agreement with a State grantee (see §511.51(b)), in carrying out the Rental Rehabilitation Program in accordance with this part. Administrative costs do not include costs of rehabilitation which are incurred by and charged to project owners as eligible project costs under §511.10(f)(2). (c) Written cost-sharing agreement. A State grantee shall determine the amount of its rental rehabilitation grant that it will permit to be used for administrative expenses, not to exceed the maximum permitted by this section. The State grantee shall share the amount of its rental rehabilitation grant designated for administrative expenses with units of general local government that incur eligible administrative costs in carrying out the Rental Rehabilitation Program, whether the unit of general local government receives a distribution of funds from the State or selects and manages projects independently as a State recipient or whether it performs less comprehensive functions by agreement with the State. Before any eligible administrative expenses are incurred by a unit of general local government under a State's grant, the cost-sharing arrangement shall be specified in a written agreement between the State grantee and each unit of general local government that receives payment from the State for administrative expenses under this part. This agreement shall describe (whether very generally or more specifically) the functions that the unit of general local government shall perform and the terms and conditions under which the unit of general local government participates in the program, including the procedures by which the unit of general local government's compensation for its administrative expenses incurred in performing the authorized functions is to be calculated and paid. HUD will not review the relative sharing of administrative expenses between the State and affected units of general local government, but pursuant to §§511.74 and 511.80, it will review and audit the State's program on the eligibility of administrative expenses paid with program funds. (d) Allocation of benefit. Rental rehabilitation grant amounts used for program administration will be deemed to meet program requirements imposed on a percentage of the annual grant basis, such as lower income benefit and use of rental rehabilitation grants for housing for families with children, in the same proportion as the grant amounts for a grant year which are used for eligible project costs meet the grant requirements. For example, if 70 percent of the grant amounts used for project costs for Fiscal Year 1989 benefit low-income families, then 70 percent of the Fiscal Year 1989 grant amounts spent for administrative costs will be deemed to benefit low-income persons. Grantees, State recipients and their contractors shall comply with the requirements and standards of OMB Circular No. A–87, “Principles for Determining Costs Applicable to Grants and Contracts with State, Local and Federally recognized Indian Tribal Governments,”1 1 OMB Circular No. A–87 is available from HUD Field Offices.
Title 24: Housing and Urban Development
PART 511—RENTAL REHABILITATON GRANT PROGRAM
Subpart H—Grant Administration
§ 511.70 Responsibility for grant administration.
§ 511.71 Administrative costs.
§ 511.72 Applicability of uniform Federal administrative requirements.
§ 511.73 Grantee records.
(a) Records to be maintained. Each grantee shall maintain records as specified by HUD that clearly document its performance under each requirement of this part. States distributing rental rehabilitation grant amounts to State recipients shall also ensure that their recipients maintain such records to document each recipient's performance. The records required by this section shall, at a minimum, include the following:
(1) Records required to comply with §511.75;
(2) Data on the racial, ethnic, gender, and income level characteristics of
(i) Tenants occupying units before rehabilitation;
(ii) Tenants moving from and (initially after rehabilitation) into projects assisted under this part;
(iii) Applicants for tenancy within 90 days following completion of rehabilitation assisted under this part; and
(iv) Owners of the projects rehabilitated; and
(3) Data indicating the race and ethnicity of households displaced as a result of program activities, and, if available, the address and census tract of the housing units to which each displaced household relocated.
(b) Retention of records. Records required to be maintained under paragraph (a) of this section shall be retained for a period of three years from the date of final closeout of the rental rehabilitation grant.
(c) Public disclosure. Documents relevant to a grantee's Program Description shall be made available for public review upon request at the grantee's office during normal working hours.
(d) Federal access to records. The Secretary, the Inspector General of HUD, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to all books, accounts, reports, files, and other papers or property of grantees, State recipients, and their contractors pertaining to rental rehabilitation grant amounts for the purpose of making surveys, audits, examinations, excerpts, and transcripts. Grantees or, where applicable, State recipients shall ensure that their agreements with owners require the owners to provide similar access to their records pertaining to the use of rental rehabilitation grant amounts.
(Approved by the Office of Management and Budget under control number 2506–0080)§ 511.74 Audit.
The financial management systems used by grantees and, where applicable, State recipients shall provide for audits in accordance with 24 CFR part 44.
§ 511.75 Disbursement of rental rehabilitation grant amounts: Cash and Management Information System.
(a) General. Rental Rehabilitation grants are managed through HUD's C/MI System for the Rental Rehabilitation Program. The C/MI System is a computerized system which manages program funds, disburses grant amounts, and collects and reports data on properties and tenants assisted under the Program.
(b) Project set-up. (1) After the grantee executes the Grant Agreement, complies with the requirements under part 58 of this title for release of funds, and submits the appropriate security documents, the grantee may identify (set-up) specific local projects in the C/MI System. State recipients are also granted access to the C/MI System for projects upon designation by the State and submission of the appropriate security documents. Within 12 calendar days of project set-up, grantees and State recipients are required to submit a Pre-Rehabilitation Report to HUD for each project set-up in the C/MI System. Until an acceptable Pre-Rehabilitation Report is received and entered in the C/MI System, grant amounts for the project are not considered “committed,” as defined in §511.2, and, therefore, are subject to deobligation to the extent authorized by 24 CFR 511.33(c).
(2) Beginning in Fiscal Year 1991, if Pre-Rehabilitation Reports are not received within 20 days of the project set-up call, the project will be cancelled automatically by the C/MI System. In addition, projects which have been committed in the C/MI System for 6 months without an initial disbursement of funds will be automatically cancelled by the C/MI System.
(c) Disbursement of rental rehabilitation grant amounts. After an acceptable Pre-Rehabilitation Report is entered into the C/MI System, obligated grant amounts may be drawn down for the project by the grantee or State recipient by electronic funds transfer to the designated depository institution of the grantee or State recipient within 48 to 72 hours of the disbursement request. Grant amounts for eligible administrative costs may be similarly drawn down by grantees by electronic funds transfer to their designated depository institutions, but State recipients are not permitted to draw down State grant amounts for administrative expenses. Any drawdown is conditioned upon the submission of satisfactory information by the grantee or State recipient about the project or the administrative expenses and compliance with other procedures specified by HUD in HUD's forms and issuances concerning the Rental Rehabilitation Program Cash and Management Information System. Copies of these forms and issuances may be obtained from HUD Field Offices. Drawdowns shall be requested by the grantee or State recipient as closely as possible to the time they are needed by a grantee or State recipient and the owner to pay eligible project costs or by a grantee to pay eligible administrative costs. Drawdowns for project costs shall be requested only for work or services that have been satisfactorily performed, or materials that are acceptable. After receipt in the grantee or State recipient's depository account, grant amounts for project costs shall immediately be disbursed by the grantee or State recipient and the owner in payment for eligible project costs and shall not be disbursed at any time, relative to a project's matching funds, in any greater proportion than the proportion of rental rehabilitation grant amounts to matching funds for the project.
(d) Payment vouchers. As post-documentation of each drawdown, a grantee or State recipient must submit to HUD a payment voucher, for each drawdown made by HUD, in the form required for the C/MI System. If the drawdown was for eligible project costs and the payment voucher is not received within ten calendar days of the drawdown, the grantee or State recipient will be suspended from setting up new projects until the required payment voucher is received by HUD. If the drawdown was for administrative costs and the payment voucher is not received within ten calendar days of the drawdown, the grantee will not be allowed to make another drawdown for administrative costs until the payment voucher is received.
(e) Submission of project completion reports. After the final draw for a project, a Project Completion Report must be submitted to HUD within 90 days of the drawdown request. However, for projects rehabilitated pursuant to §511.11(c)(2) (publicly owned project at the time of commitment), the Project Completion Report must be submitted within 90 days of the final draw, but not later than 2 years and 90 days after the date of commitment. If a satisfactory Project Completion Report is not submitted by the due date, HUD will suspend further project set-ups for the grantee or State recipient. Project set-ups will remain suspended until a satisfactory Project Completion Report is received and entered into the C/MI System.
(Approved by the Office of Management and Budget under control number 2506–0080)§ 511.76 Program income.
(a) General. Grantees and State recipients are neither encouraged to earn nor discouraged from earning program income in using rental rehabilitation grant amounts under this part.
(b) Definition of program income. Program income means gross income received by the grantee or State recipient (or by another party at the direction of the grantee or State recipient) which is directly generated from the use of rental rehabilitation grant amounts. Primarily, it includes but is not limited to, the following:
(1) Repayments of principal (whether in installments or a lump-sum) and any interest or penalty assessment, under the terms of the loan commitment or other project assistance agreement between the owner and the grantee or State recipient, including repayments, pursuant to §511.11(d)(3), of the rental rehabilitation grant assistance by the owner after completion of rehabilitation; and
(2) Interest earned on program income pending its disposition. Grantees or State recipients are not authorized to deduct costs incident to the generation or management of income from gross income for purposes of determining program income. Governmental fees and taxes, including income taxes, property taxes, special assessments, transfer taxes, recording fees and other normal governmental revenues, do not constitute program income if they are imposed by generally applicable law, regulation, or ordinance and are not imposed in consideration of the project's receipt of assistance under this part. Program income also does not include grant amounts required to be returned to HUD as a result of cancellation of a project before completion, or interest on those grant amounts, or any interest earned by the grantee or State recipient or grant funds after drawdown and before disbursement for eligible costs. (For disposition of such interest, see 24 CFR 85.21(i).)
(c) Eligible uses. Program income may be used only as prescribed in paragraphs (c)(1) and (c)(2) of this section.
(1) Program income may be used for any activity which is eligible under this part, except that program income may not be used to pay for administrative costs, as described at §511.71. In particular, the total of rental rehabilitation grant amounts and Rental Rehabilitation Program income used for any project (except under §511.76(c)(2)) may not exceed the amount per unit allowed under §511.11(e)(2) or 50 percent of the total eligible project costs (except as noted in §511.11(e)(1)).
(2) Program income may also be used to provide rental assistance to lower income tenants in properties rehabilitated through the RRP. This includes the use of program income to pay for administrative costs associated with the provision of rental assistance but not to exceed the amount allowed for administrative fees in the Housing Voucher Program authorized under section 8(o) of the United States Housing Act of 1937, 42 U.S.C. 1437f. In order to use program income for rental assistance, the grantee or State recipient must—
(i) Use the funds to assist low-income tenants who initially occupy properties rehabilitated with rental rehabilitation grant amounts or rental rehabilitation program income;
(ii) Have a written policy which is available to the public stating that program income will be so used and specifying who is eligible to receive such assistance; and
(iii) Have an agreement with the PHA stating that the PHA will utilize the program income to provide rental assistance in accordance with the written policy.
(d) Timing the use of program income. Grantees and State recipients shall not commit available rental rehabilitation grant amounts to specific local projects if sufficient program income is on hand and available to fund the project, or a substantial portion of the project. In order to avoid possible over commitment of funds, grantees and State recipients shall not anticipate the receipt of program income and enter into binding commitments with owners cumulatively exceeding the total amount of program income on hand plus uncommitted rental rehabilitation grant amounts.
(e) Accounting for and reporting program income. Program income shall be accounted for and reported in the grantee's Annual Performance Report under §511.81(b) and in the Cash and Management Information System under §511.75, in the manner prescribed by HUD.
(f) Authority of State grantees. States administering rental rehabilitation grants have discretion to choose whether program income is to be earned at all or is to be paid to or retained by the State or paid to or retained by the State recipient. The State's determination should be contained in a written agreement between the State and its State recipients. However, once earned, program income must be used and accounted for in accordance with this section by the State or by the State recipient, as applicable.
(g) Authority of urban counties. Because the configuration of an urban county may change from time to time, particularly at the time of requalification of an urban county in the Community Development Block Grant program, special provisions must be made for urban county program income. The urban county may determine whether program income generated by a project located in a unit of general local government which, for whatever reason, no longer participates in the urban county shall be retained by the urban county for its RRP or by the unit of general local government. However, urban county program income must otherwise be used and accounted for by the urban county and the unit of general local government in accordance with this section.
(h) Program closeout and disposition of program income. Program income must be accounted for by the grantee when a Rental Rehabilitation Program is completely closed out for all years. Program “closeout” will occur when the following conditions have been met: All grant funds from all program years (excluding program income) have been expended; the grantee and, if applicable, its State recipients do not expect (or have elected not) to receive any additional rental rehabilitation grant amounts, and the annual performance report covering the last program year has been submitted to HUD. Program income shall be treated in the following manner before and after program closeout:
(1) Before program closeout, program income shall be used for activities eligible under §511.76(c); and
(2) Program income on hand at the time of program closeout or earned after program closeout may be contributed to HOME or HOPE program grantees as a cash matching contribution in accordance with applicable HOME or HOPE program rules, or may be used for activities that would be eligible under other affordable housing activities, as determined by the recipient.
[55 FR 20050, May 14, 1990, as amended at 58 FR 52567, Oct. 8, 1993; 61 FR 7062, Feb. 23, 1996]
§ 511.77 Grant closeout.
(a) Each individual fiscal year rental rehabilitation grant will be closed out when all grant amounts for the grant to be closed out have been drawn down and expended for completed projects and/or administrative costs, or grant amounts not drawn down and expended have been deobligated by HUD.
(b) Project Completion Reports for all projects utilizing grant amounts from the fiscal year grant(s) to be closed out have been submitted and entered into the C/MI System.
(c) The required reviews and audits to determine whether grantees have satisfied the terms of their grant agreement have been made. Closeout is contingent upon the receipt of the grantee's most recent audit report and audit reports of State recipients, where applicable. For closeout of the grant to proceed, the most recent audit report(s) must be free of any outstanding findings related to the RRP grant to be closed. The audit(s) of the grantee and State recipients, where applicable, should cover all grant amounts from all fiscal years which are to be closed out except as noted in paragraph (c)(2) of this section.
(1) The Single Audit Act prohibits requiring a grantee or State recipient to obtain an audit at its expense covering only the Rental Rehabilitation Program. (HUD still has the authority to conduct an audit or to contract with an independent public accountant to conduct an audit of the grant. However, HUD must pay for the audit.)
(2) When the previous audit(s) fail to cover all grant amounts under the Grant Agreement, the program may still be closed out, provided the grantee agrees in writing to remit to HUD any costs questioned by a subsequent audit that are disallowed by HUD. This procedure is expected to be used in those cases when both the grantee and HUD want to proceed with the closeout before the next periodic single audit is conducted covering the remaining grant amounts not already audited.
(d) With respect to monitoring the grantee, either:
(1) The HUD Field Office has conducted an on-site monitoring of the grantee and has determined that the grantee's performance, with respect to any grant to be closed out, is satisfactory and is in compliance with Rental Rehabilitation program statutory and regulatory requirements, including §511.10(a) and §511.10(b); or
(2) A grant may be closed before on-site monitoring has been conducted, provided:
(i) The Cash and Management Information reports indicate the grantee's performance is satisfactory and is in compliance with Rental Rehabilitation program statutory and regulatory requirements;
(ii) There are no outstanding monitoring findings; and
(iii) The grantee agrees in writing to pay back the amount of any costs that are later found by HUD to be ineligible based on a subsequent on-site monitoring review or audit.
(Approved by the Office of Management and Budget under control number 2506–0080)[55 FR 20050, May 14, 1990, as amended at 58 FR 52567, Oct. 8, 1993; 61 FR 7062, Feb. 23, 1996]
Browse Previous | Browse Next
