[Federal Register Volume 85, Number 228 (Wednesday, November 25, 2020)]
[Notices]
[Pages 75361-75371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26017]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6225-N-01]


Notice of FY2020 Allocations, Waivers, and Alternative 
Requirements for the Pilot Recovery Housing Program

AGENCY: Office of Community Planning and Development, HUD.

ACTION: Implementation notice for the pilot recovery housing program, 
including allocations and applicable rules, waivers, and alternative 
requirements.

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SUMMARY: This notice describes the program rules, waivers, and 
alternative requirements that apply to $25,000,000 for activities 
authorized under the SUPPORT for Patients and Communities Act, entitled 
Pilot Program to Help Individuals in Recovery From a Substance Use 
Disorder Become Stably Housed, herein referred to as the Recovery 
Housing Program, or RHP. This pilot program authorizes assistance to 
grantees (states and the District of Columbia) to provide stable, 
temporary housing to individuals in recovery from a substance use 
disorder. The assistance is limited, per individual, to a period of not 
more than 2 years or until the individual secures permanent housing, 
whichever is earlier. The funds for fiscal year 2020 allocations 
described in this notice were made available by the Further 
Consolidated Appropriations Act, 2020, which was signed by President 
Trump on December 20, 2019. The SUPPORT Act requires funds appropriated 
or made available for the RHP be treated as community development block 
grant (CDBG) funds under the Housing and Community Development Act of 
1974 (HCD Act), unless otherwise provided or modified by waivers and 
alternative requirements. The SUPPORT Act also authorizes the Secretary 
to waive or specify alternative requirements to any provision of the 
HCD Act, except for requirements related to fair housing, 
nondiscrimination, labor standards, the environment, and requirements 
that activities benefit persons of low- and moderate-income. This 
notice describes applicable waivers and alternative requirements to the 
CDBG program requirements which have been found to be necessary to 
expedite or facilitate the use of RHP funds.

DATES: Effective Date: November 19, 2020.

FOR FURTHER INFORMATION CONTACT: Jessie Handforth Kome, Director, 
Office of Block Grant Assistance, Community Planning and Development, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
7282, Washington, DC 20410, telephone number 202-708-3587. Persons with 
hearing or speech impairments may access this number via TTY by calling 
the Federal Relay Service at 800-877-8339. Facsimile inquiries may be 
sent to Ms. Kome at 202-708-0033. (Except for the ``800'' number, these 
telephone numbers are not toll-free). Email inquiries may be sent to 
hud.gov">RecoveryHousing@hud.gov.

SUPPLEMENTARY INFORMATION: This pilot program would support individuals 
in recovery onto a path to self-sufficiency. By providing stable 
housing to support recovery, RHP aims to support efforts for 
independent living. More specifically, RHP would provide the funds to 
develop housing or maintain housing for individuals. To maximize and 
leverage these resources, grantees

[[Page 75362]]

should coordinate RHP-funded projects with other Federal and non-
federal assistance related to substance abuse, homelessness and at-risk 
of homelessness, employment, and other wraparound services.
    Section 8071 of the SUPPORT Act (Section 8071) required funds 
appropriated or made available for the Recovery Housing Program be 
treated as community development block grant (CDBG) funds under title I 
of the Housing and Community Development Act of 1974, unless otherwise 
provided in Section 8071 or modified by waivers and alternative 
requirements. The SUPPORT Act authorizes the Secretary to waive or 
specify alternative requirements to any provision of title I of the HCD 
Act, except for requirements related to fair housing, 
nondiscrimination, labor standards, the environment, and requirements 
that activities benefit persons of low- and moderate-income. This 
notice describes applicable waivers and alternative requirements to the 
CDBG program requirements at title I of the HCD Act and 24 CFR part 570 
which have been found to be necessary to expedite or facilitate the use 
of RHP funds.

I. Background

A. Formula and Allocations

    The Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94) 
(``FY 20 Appropriations Act'') made available $25,000,000 for 
activities authorized under Section 8071 and required the Secretary to 
allocate the funds based on the percentages shown in Table 1 of the 
Federal Register Notice published on April 17, 2019 (84 FR 16027) (the 
``Formula Notice''). HUD published the allocations for the appropriated 
RHP funds to 25 grantees on HUD's website on February 13, 2020 at: 
https://www.hud.gov/program_offices/comm_planning/communitydevelopment/recovery_housing_program/.
    The 25 grantees include 24 states and the District of Columbia. For 
grants authorized by the SUPPORT for Patients and Communities Act (Pub. 
L. 115-271, approved Oct. 24, 2018) (``SUPPORT Act''), the term 
``state'' includes any state as defined in section 102 of the Housing 
and Community Development Act of 1974 (42 U.S.C. 5302) (HCD Act) and 
the District of Columbia. As required by the SUPPORT Act, HUD allocated 
funds only to states with an age-adjusted rate of drug overdose deaths 
above the national overdose mortality rate, according to the Centers 
for Disease Control and Prevention.
    The SUPPORT Act authorized the Secretary to use up to 2 percent of 
the funds made available under the FY 20 Appropriations Act for 
technical assistance to grantees. Therefore, 2 percent ($500,000) will 
be used by the Secretary to provide technical assistance to grantees. 
The remaining $24,500,000 was allocated following the percentages shown 
in Table 1 of the Formula Notice, pursuant to the FY 20 Appropriations 
Act.

          Table 1--Recovery Housing Program FY2020 Allocations
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                               Allocation shares *
           Grantee             per formula notice     FY2020 allocation
                                       (%)
------------------------------------------------------------------------
West Virginia...............                  6.47         $1,585,000.00
District of Columbia........                  5.01          1,226,000.00
Ohio........................                  5.00          1,225,000.00
Pennsylvania................                  4.90          1,200,000.00
New Hampshire...............                  4.68          1,148,000.00
Kentucky....................                  4.56          1,116,000.00
Maryland....................                  4.31          1,056,000.00
Massachusetts...............                  4.30          1,052,000.00
Rhode Island................                  4.26          1,043,000.00
Delaware....................                  4.17          1,022,000.00
Maine.......................                  3.88            951,000.00
Connecticut.................                  3.85            944,000.00
New Mexico..................                  3.84            940,000.00
Michigan....................                  3.67            899,000.00
Tennessee...................                  3.63            891,000.00
Florida.....................                  3.56            871,000.00
New Jersey..................                  3.49            855,000.00
Indiana.....................                  3.48            853,000.00
Nevada......................                  3.46            847,000.00
Missouri....................                  3.43            839,000.00
Louisiana...................                  3.42            838,000.00
Arizona.....................                  3.28            804,000.00
Oklahoma....................                  3.21            787,000.00
Utah........................                  3.08            755,000.00
Vermont.....................                  3.07            753,000.00
                             -------------------------------------------
    Subtotal................  ....................         24,500,000.00
                             -------------------------------------------
    TA-Set Aside............  ....................            500,000.00
                             -------------------------------------------
        Total...............  ....................         25,000,000.00
------------------------------------------------------------------------
* shares were slightly adjusted to evenly round all award amounts.

B. Submission Deadline and Reallocation

    RHP Grantees must submit an RHP Action Plan, including the Form SF-
424, application for federal funds, by August 16, 2021. The RHP action 
plan must meet the specific requirements identified in this notice 
under section II.H.
    If a grantee receiving an allocation of funds under this notice 
fails to submit

[[Page 75363]]

a RHP Action Plan for its allocation by no later than the August 16, 
2021 deadline, or submits a RHP Action Plan for less than the total 
allocation amount, HUD may simultaneously notify the grantee of the 
reduction in its allocation amount and reallocate those funds in 
accordance with the SUPPORT Act's requirements.

II. Applicable Rules, Waivers, and Alternative Requirements

    The SUPPORT Act requires amounts appropriated or amounts otherwise 
made available to grantees be treated as though such funds are CDBG 
funds under the HCD Act. Except as provided in Section 8071 or in this 
notice, the statutory and regulatory provisions governing the CDBG 
program shall apply to grantees.
    The SUPPORT Act authorizes the Secretary to waive or specify 
alternative requirements to any provision of title I of the HCD Act 
necessary to facilitate or expedite the use of RHP funds, except for 
requirements related to fair housing, nondiscrimination, labor 
standards, the environment, and requirements that activities benefit 
persons of low- and moderate-income.
    As required by the SUPPORT Act, the Secretary has determined that 
the statutory and regulatory waivers and alternative requirements 
described in this notice are necessary to expedite or facilitate the 
use of RHP funds.
    These waivers and alternative requirements are only applicable to 
the use of RHP funds and do not apply to CDBG funds used in conjunction 
with RHP funds or other sources of CDBG funds (i.e., from other grants 
or guaranteed loan funds) that are used for similar activities.

A. State Definition

    Section 8071(g) provides for purposes of Section 8071, the term 
``state'' includes the District of Columbia and any state as defined in 
section 102 of the HCD Act (42 U.S.C. 5302).
    Under the HCD Act, the District of Columbia is a CDBG entitlement 
grantee, not a grantee under the state CDBG program. Therefore, only 
for the District of Columbia, HUD is waiving the regulations in 24 CFR 
part 570, subpart I and imposing the requirements in 24 CFR 570, 
subparts A, C, D, J, K, and O, to permit the District of Columbia to be 
subject to the entitlement CDBG regulations for its RHP grant, except 
as modified by the waivers and alternative requirements in this notice.

B. Selecting an Administrative Agency

    Pursuant to section 102(c) of the HCD Act, the chief executive 
officer of a state or a unit of general local government may designate 
one or more public agencies to undertake activities assisted by RHP 
funds. Given that RHP is subject to CDBG program requirements, HUD 
recommends involving administrators with experience with CDBG funds, 
the Disaster Recovery Grant Reporting (DRGR) system, and other 
federally funded programs supporting recovery from a substance use 
disorder. If the administrator role is shared between multiple agencies 
(such as those described in Section II.D below), HUD recommends that 
these agencies enter into interagency agreements that describe how they 
will share responsibilities for grant administration.

C. Mandatory Priorities Imposed by the SUPPORT Act

    The SUPPORT Act requires all grantees to distribute RHP funds 
giving priority to entities with the greatest need and ability to 
deliver effective assistance in a timely manner. Grantees must use RHP 
funds in a manner that reflects these priorities. Grantees are required 
to include a description of how they will comply with this requirement 
in their RHP Action Plans, as described in section II.H. of this 
notice.

D. State Direct Administration (Applies to All Grantees Except the 
District of Columbia)

    The waivers and alternative requirements in this section permit a 
state grantee to use its RHP funds to act directly, subject to state 
law and RHP requirements, to carry out activities through employees, 
contractors, and subrecipients in all geographic areas within its 
jurisdiction, including entitlement areas and tribal areas.
    HUD has determined that these waivers and alternative requirements 
will facilitate and streamline the use of RHP funds, particularly by 
nonprofits and other subrecipients that currently administer 
residential programs for persons in recovery from a substance use 
disorder. Permitting states to carry out activities directly will help 
the state to focus RHP funds towards projects that complement (but do 
not supplant) federal substance abuse-related assistance (e.g., State 
Opioid Response (SOR) Grants or Substance Abuse Prevention and 
Treatment Block Grants (SABG) awarded by the Substance Abuse and Mental 
Health Services Administration (SAMHSA) of the U.S. Department of 
Health and Human Services (HHS)). For example, RHP funding could be 
used for eligible temporary housing costs in coordination with other 
counseling and medication-assisted treatment (MAT) services funded by 
other federal programs, or other wrap-around services such as 
employment programs by the U.S. Department of Labor under the Workforce 
Innovation and Opportunity Act. Additionally, grantees are encouraged 
to partner with other programs that may be assisting these same 
individuals either before or after their participation in an RHP-funded 
program, such as HUD's Continuum of Care (CoC) Program, Emergency 
Solutions Grants (ESG) program, Housing Opportunities for Persons With 
AIDS (HOPWA) Program, and also HUD-VASH, a joint program between HUD 
and the U.S. Department of Veterans Affairs (VA).
    Requirements at 42 U.S.C. 5306(d) and 24 CFR 570.480(g) are waived 
to the extent necessary to allow a state to use its RHP grant to 
directly carry out activities eligible under this notice, rather than 
only distribute its RHP funds to units of general local government. For 
example, a state may also directly fund a public or private nonprofit 
entity as a subrecipient, may procure a for-profit entity to carry out 
the RHP activities, or may use state employees to administer RHP-funded 
activities. The waiver and alternative requirement do not apply to the 
District of Columbia, which can directly carry out activities under 
requirements applicable to entitlement CDBG grantees.
    A state's proposal to act directly and to distribute or use RHP 
funds in entitlement areas must be published for public comment in its 
RHP action plan in accordance with its citizen participation plan. 
States carrying out projects in tribal areas through employees, 
contractors, or subrecipients must obtain the consent of the Indian 
tribe with jurisdiction over the tribal area.
    While states may carry out RHP activities directly, states are not 
required to carry out activities directly and may use the existing 
authority under the HCD Act and state CDBG program regulations to 
develop a method of distribution (MOD) to distribute RHP funds to units 
of general local government, Indian tribes, and tribally-designated 
housing entities. At the state's discretion, the units of general local 
government eligible for RHP funds may include those participating in 
the Entitlement CDBG program.
    To facilitate the use of RHP funds, HUD is granting the following 
waiver

[[Page 75364]]

and alternative requirements when states carry out activities directly:
    i. Use of subrecipients by states (including nonprofits and 
tribes). HUD is adopting the following alternative requirement that 
shall apply when states carry out activities directly: States carrying 
out activities through subrecipients must comply with 24 CFR 570.489(m) 
relating to monitoring and management of subrecipients. The definition 
of subrecipient at 24 CFR 570.500(c) applies when states carry out 
activities through subrecipients, and the requirements of 24 CFR 
570.489(g) (as modified by section II.D.vii) shall apply. For purposes 
of this alternative requirement, the definition of subrecipients at 24 
CFR 570.500(c) is modified to expressly include Indian tribes. Indian 
tribes that receive RHP funding from a state grantee must comply with 
the Indian Civil Rights Act (Title II of the Civil Rights Act of 1968, 
25 U.S.C. 1301 et seq.). This conforming requirement is necessary 
because the state CDBG regulations do not anticipate states 
distributing funds through means other than a method of distribution to 
units of general local government.
    ii. Activities carried out by states in entitlement areas. The 
provisions of 24 CFR 570.486(c) are waived to the extent necessary to 
allow states, either directly or through units of general local 
government, to use RHP funds for activities located in entitlement 
areas without contribution from the entitlement jurisdiction, 
consistent with the waiver and alternative requirements in section 
II.D. HUD is granting this waiver to facilitate and expedite the use of 
RHP funds.
    iii. Recordkeeping. When a state carries out activities directly, 
24 CFR 570.490(b) is waived, and the state shall establish and maintain 
such records as may be necessary to facilitate review and audit by HUD 
of a state's administration of RHP funds under 24 CFR 570.493. 
Consistent with applicable statutes, regulations, waivers and 
alternative requirements, and other federal requirements, the records 
maintained by the state shall be sufficient to: (1) Enable HUD to make 
the applicable determinations described at 24 CFR 570.493; (2) make 
compliance determinations for activities carried out directly by the 
state; (3) show how activities are consistent with the descriptions of 
activities in the RHP Action Plan in the DRGR system and with the 
requirements that apply to the use of RHP funds; and (4) demonstrate 
that monitoring standards and procedures are sufficient to ensure 
program requirements are met and provide for continual quality 
assurance and adequate program oversight. For fair housing and equal 
opportunity (FHEO) purposes, and as applicable, such records shall 
include data on racial, ethnic, and gender characteristics of persons 
and households who are applicants for, participants in, or 
beneficiaries of the program.
    iv. Change of use of real property. For purposes of the RHP 
program, all references to ``unit of general local government'' in 24 
CFR 570.489(j), shall be read as ``state and unit of general local 
government.''
    v. HUD Review of State Activities. HUD is waiving the requirements 
at section 104(e)(2) of the HCD Act (42 U.S.C. 5304(e)(2)) and the 
regulation at 24 CFR 570.480(c) to the extent necessary to permit the 
following alternative requirements. The reviews and audits described in 
section 104(e)(2) shall also include a review of whether the state has 
carried out RHP activities in a timely manner and in conformance with 
its certifications and the RHP grant requirements. The regulation at 24 
CFR 570.480(c) shall be modified with respect to the basis for HUD 
determining whether the state has failed to carry out its 
certifications, so that the Secretary must find that procedures and 
requirements adopted by the state are insufficient to afford reasonable 
assurance that activities undertaken by units of general local 
government or the state were not plainly inappropriate to meeting the 
primary objectives of the HCD Act, Section 8071, this notice, and the 
state's RHP objectives.
    vi. Responsibility for review and handling of noncompliance. HUD is 
waiving 24 CFR 570.492 and implementing the alternative requirement 
that the state shall make reviews and audits, including on-site 
reviews, of any designated public agencies, units of general local 
government, and subrecipients, as may be necessary or appropriate to 
meet the requirements of section 104(e)(2) of the HCD Act, as modified 
by this notice. In the case of noncompliance with these requirements, 
the state shall take such actions as may be appropriate to prevent a 
continuance of the deficiency, mitigate any adverse effects or 
consequences, and prevent a recurrence. The state shall establish 
remedies for noncompliance by any designated public agencies, units of 
general local government, and subrecipients.
    vii. Procurement. HUD is waiving 24 CFR 570.489(g) only to the 
extent necessary to expand state procurement requirements to include 
all subrecipients in addition to units of general local government. 
Grantees must comply with the procurement requirements at 24 CFR 
570.489(g) and shall establish requirements for procurement policies 
and procedures for units of general local governments and subrecipients 
consistent with the requirements at 24 CFR 570.489(g).
    viii. Means of Carrying Out Activities and Use of Subrecipients. 
Activities directly carried out by states may be carried out, subject 
to state law, by the state through its employees, through procured 
contracts, or through assistance provided under agreements with 
subrecipients. A state is responsible for ensuring that RHP funds are 
used in accordance with all program requirements. The use of 
interagency agreements, subrecipient agreements, or contracts does not 
relieve the state of this responsibility. States are responsible for 
determining the adequacy of performance under all agreements and 
contracts covering the use of RHP funds, and for taking appropriate 
action when performance problems arise. States continue to be 
responsible for civil rights, labor standards, and environmental 
protection requirements, for compliance with all applicable 
requirements, including conflict of interest provisions in 24 CFR 
570.489(g) and (h). HUD reminds states carrying out activities directly 
that all RHP grants remain subject to the provisions of 2 CFR part 200 
that are incorporated by state CDBG regulations at 24 CFR part 570, 
subpart I, including the cost principles in 2 CFR part 200, subpart E. 
As a reminder, the cost principles require that costs be necessary and 
reasonable for the performance of the grantee's RHP grant. This 
requirement applies to all costs charged to the grant, including 
residential rehabilitation and reconstruction costs.
    ix. Environmental Review. According to the environmental review 
regulations at 24 CFR 58.4(b), when a state carries out activities 
directly, the state must submit the certification and Request for 
Release of Funds (RROF) to HUD for approval. While a state usually 
distributes CDBG funds to a unit of general local government and takes 
on HUD's role as the responsible entity in receiving certifications 
from grant recipients and approving RROFs, for RHP activities carried 
out directly by the state, the state must submit the certification and 
RROF to HUD for approval.

E. Administrative Costs Cap, Elimination of State Matching Funds, and 
Related Provisions

    The SUPPORT Act contains two requirements that modify existing CDBG 
requirements. Pursuant to Section

[[Page 75365]]

8071(c)(3), up to 5 percent of any RHP grant may be used for 
administrative costs by the grantee. Therefore, the total of all costs 
classified as administrative for a state, unit of general local 
government, and subrecipient(s) must be less than or equal to the 5 
percent cap. Secondly, Section 8071(d)(2) provides that no matching 
funds are required for grantees to receive RHP grants.
    In addition, to implement the requirements of the SUPPORT Act, HUD 
is limiting the eligible activities that grantees may carry out with 
RHP funds to those activities described in section II.L. For example, 
although allowed in the state CDBG program, a planning-only grant is 
not an eligible RHP activity.
    HUD is also clarifying the inapplicability of CDBG requirements 
that conflict with the SUPPORT Act and imposing waivers and alternative 
requirements to modify the applicability of requirements related to 
administrative, management, planning, and technical assistance costs.
    i. Administrative Cost Cap 5 percent. The requirements at section 
106(d)(3) and (d)(6)(A) of the HCD Act (42 U.S.C. 5306(d)(3) and 
(d)(6)(A)) and the regulations at 24 CFR 570.200(g) and 570.489(a) are 
waived to the extent that they conflict with the Section 8071 
provisions which establish a 5 percent cap on administrative costs with 
no match requirement, and section II.E of this notice which precludes 
planning-only grants. RHP grantees may expend up to 5 percent of the 
RHP grant and up to 5 percent of program income received for 
administrative costs. A nonfederal match for administrative costs is 
not required.
    ii. Technical Assistance Cost Cap 3 percent. Section 106(d)(5) and 
(d)(6) of the HCD Act (42 U.S.C. 5306(d)(5) and (6)) and 24 CFR 
570.489(a) are waived to the extent necessary to establish the 
following alternative requirement. In addition to the 5 percent of its 
RHP grant that a grantee may use for administrative costs, a grantee 
may use up to an additional 3 percent of the grant for technical 
assistance activities. Additionally, RHP grantees may expend up to 3 
percent of program income received for technical assistance activities.
    iii. Consolidated plan requirements. Section 104(a)-(c), and (e) 
(42 U.S.C. 5304(a)-(c), and (e)) and 24 CFR 570.304, 24 CFR 570.485 are 
waived to the extent necessary to allow the grant process and RHP 
action plan requirements imposed by this notice.

F. Funding Activities in Entitlements and Tribal Lands

    To facilitate the use of RHP funds to address the need for stable, 
temporary housing for individuals in recovery from a substance use 
disorder in all areas of a grantee's jurisdiction, 24 CFR 570.480(g) is 
waived to the extent necessary for a state to carry out activities in 
all areas of its jurisdiction and to distribute RHP funds to 
entitlement and non-entitlement units of general local government, 
Indian tribes, or tribally designated housing entities within all areas 
of its jurisdiction. Furthermore, HUD is waiving 24 CFR 570.486(c) to 
allow a state to use RHP funds for an activity located in an 
entitlement jurisdiction without a contribution from the entitlement 
jurisdiction. Indian tribes that receive RHP funds from a state grantee 
must comply with the Indian Civil Rights Act (Title II of the Civil 
Rights Act of 1968, 25 U.S.C. 1301 et seq.).
    Under the waiver and alternative requirements described in section 
II.D., states may carry out activities in all areas of its jurisdiction 
by carrying out activities directly or by distributing RHP funds using 
a method of distribution. At the state's discretion, the eligible units 
of general local government for RHP funds may include those 
participating in the Entitlement CDBG program.
    For the purpose of the District of Columbia, the definition of 
subrecipients at 24 CFR 570.500(c) is also modified to expressly 
include Indian tribes. Indian tribes that receive RHP funding from a 
grantee must comply with the Indian Civil Rights Act. This alternative 
requirement provides the District of Columbia with requirements 
consistent with those applicable to the state grantees under RHP.

G. Pre-Award/Pre-Agreement Costs

    To expedite and facilitate the use of RHP grant funds for eligible 
activities authorized by the SUPPORT Act, HUD is imposing the following 
waivers and alternative requirements:
    i. The District of Columbia and its subrecipients are subject to 
the provisions of 24 CFR 570.200(h) for pre-award costs, except HUD 
waives 24 CFR 570.200(h) to require the effective date of the RHP grant 
agreement to be the date of HUD's execution of the RHP grant agreement. 
HUD is waiving 24 CFR 570.200(h)(1)(i)-(vi) and as an alternative 
requirement, the District of Columbia may reimburse pre-award costs in 
an amount not to exceed 25 percent of the grant, provided that the 
District of Columbia has described the pre-award costs in its RHP 
Action Plan and the costs comply with the RHP requirements, including 
applicable requirements at 2 CFR part 200 and Environmental Review 
Procedures stated in 24 CFR part 58.
    ii. The provisions at 24 CFR 570.489(b) are modified to permit a 
state grantee to charge allowable pre-agreement costs incurred by 
itself, its recipients, or subrecipients to the RHP grant and require 
that all pre-agreement costs comply with RHP program requirements, 
including applicable requirements at 2 CFR part 200 and Environmental 
Review Procedures stated in 24 CFR part 58. Additionally, a grantee 
must include a description of pre-agreement costs to be reimbursed with 
RHP funds in its RHP Action Plan.

H. Overview of Grant Process and RHP Action Plan Requirements

    Grantees must complete the following steps to access RHP grant 
funds:
    1. The grantee develops the proposed RHP Action Plan and publishes 
it in accordance with the grantee's adopted citizen participation plan 
(CPP) it has established in accordance with 24 CFR 91.105 or 24 CFR 
91.115 and this Notice.
    2. The grantee provides opportunity for public comment and public 
hearings, if any, on the RHP action plan and responds to such comments 
in accordance with its CPP. The CPP may be amended in accordance with 
24 CFR 91.105(a)(3) and 91.115(a)(3) concurrently to address RHP funds, 
and to allow no less than 15 calendar days of public comment and 
encourage participation by organizations interested in residential 
recovery programs for individuals with substance use disorder.
    3. The grantee considers and summarizes public comments received in 
its RHP Action Plan and attaches a summary to its RHP Action Plan, 
which must include a summary of any comments not accepted and the 
reasons therefore;
    4. The grantee submits its final RHP Action Plan to HUD via DRGR by 
August 16, 2021, which includes Standard Form 424 (SF-424), SF-424D 
(HUD collects these assurances for both construction and non-
construction activities), and certifications;
    5. HUD will review the RHP Action Plan in accordance with 24 CFR 
91.500;
    6. Once HUD accepts the RHP Action Plan, HUD and the grantee will 
enter into a grant agreement. HUD transmits the RHP grant agreement to 
the grantee, and the grantee signs and returns the grant agreement for 
HUD's signature;

[[Page 75366]]

    7. HUD establishes the line of credit that can be accessed through 
DRGR; and
    8. The grantee may draw down funds from the line of credit after 
the Responsible Entity completes applicable environmental reviews(s) 
pursuant to 24 CFR part 58 and, as applicable, receives from HUD or the 
state the Authority to Use Grant Funds (AUGF) form and certification.
    HUD is granting the following waivers and alternative requirements 
below for a grantee's RHP Action Plan to expedite the use of RHP 
grants. HUD is waiving 42 U.S.C. 5304(a)(1), 42 U.S.C. 5304(m), 42 
U.S.C. 5306(a)(1), 42 U.S.C. 5306(d)(2)(C)(iii) 24 CFR 570.485, and 24 
CFR 570.304 to the extent necessary to require a grantee to submit an 
RHP Action Plan separately from the consolidated plan covering other 
Community Planning and Development Programs, including CDBG. Under this 
waiver and alternative requirement, grantees do not need to reference 
the RHP program in the consolidated plan submitted via HUD's Integrated 
Disbursement and Information System (IDIS), unless the information 
included references other HUD programs. For example, if joint public 
comment and hearings are conducted by the grantee for RHP and CDBG, 
those meeting documents and comments may be uploaded for both RHP in 
DRGR and CDBG in IDIS. The RHP Action Plan will be separately submitted 
in DRGR and will be reviewed by HUD separately from any plan 
submissions made for other programs reported in IDIS. A grantee may 
prepare a single RHP Action Plan, including objectives and outcome 
measures, for its RHP allocation. In addition, RHP Action Plans may be 
submitted without updating the current consolidated plan's assessment, 
analysis, and strategy.
    This waiver does not amend the CPP requirements or 24 CFR 570.486. 
HUD is imposing 24 CFR 91.505, as modified by this notice, to make the 
RHP Action Plan subject to the process provided for substantial 
amendments in a grantee's CPP. The CPP may be amended concurrently by 
grantees to allow no less than 15 calendar days of RHP public comment 
and to encourage participation by organizations interested in 
residential recovery programs for individuals with a substance use 
disorder. In addition to CPP requirements, HUD strongly encourages 
grantees to seek feedback from their Single State Agency (SSA), the 
state agency responsible for administering SABG and SOR grants from 
SAMHSA. The directory for SSA contacts for each state and the District 
of Columbia can be found at https://www.samhsa.gov/sites/default/files/ssa-directory-04282020.pdf.
    A grantee's RHP Action Plan must include the proposed use of all 
funds, criteria for eligibility, and how the use addresses the purpose 
of RHP funds to provide stable, temporary housing to persons in 
recovery from a substance use disorder. The RHP Action Plan must 
include the following:
    i. Standard Form 424 and 424D (HUD collects these assurances for 
both construction and non-construction activities).
    ii. Program Summary: A concise executive summary that identifies 
needs and specific goals for the grantee's RHP funds.
    iii. Resources: A concise summary of the amounts of RHP funds and 
other federal and non-federal resources. Federal resources shall 
include any RHP program income expected to be available for RHP 
eligible activities, as well as other federal program funding for RHP 
eligible activities made available by the grantee. The RHP Action Plan 
must identify other state, local, nonprofit, or private resources 
expected to be made available in conjunction with the use of RHP funds 
for RHP eligible activities. HUD encourages grantees to review 
designated Opportunity Zone census tracts in their jurisdiction when 
considering the distribution of resources and placement of RHP 
projects. Where the grantee deems it appropriate, it may identify 
publicly owned land or property located within the grantee's 
jurisdiction that may be used to carry out the activities identified in 
the RHP Action Plan.
    iv. Administration Summary: A concise summary of the role(s) of one 
or more of the grantee's agencies and departments in the administration 
of the RHP grant and contact information for these agencies and 
departments.
    v. Use of Funds: A description of the use of funds that addresses 
the following:
    (1) Awards to Communities by Method of Distribution (this element 
applies to grantees other than the District of Columbia). A statement 
of whether the grantee will distribute all or part of the RHP funds 
through a method of distribution and, if so, a description of the 
grantee's method for distributing RHP funds to any entitlement and non-
entitlement units of general local government, Indian tribes, or 
tribally designated housing entities.
    (2) Activities carried out directly. A statement of whether the 
grantee will use all or part of its RHP funds for activities to be 
carried out directly by the grantee, as described in section II.D., 
and, if so, a description of the eligible activities as described in 
section II.L. that will be carried out directly by the grantee. A 
grantee may carry out the activity with its own staff, procure a for-
profit entity, or make a grant to a subrecipient.
    (3) Eligible Subrecipients. A description of the types of entities 
or organizations that are eligible to become subrecipients. A grantee 
may choose to make public or private nonprofit entities eligible for 
RHP funding. A grantee may set other criteria related to the potential 
subrecipient's existing services, unmet need, experience, and past 
performance.
    (4) Criteria for evaluation of applications and applicants. The 
grantee shall describe all criteria used to make funding choices, and 
describe the relative importance of the criteria, where applicable. 
This is required for all funding decisions, including items (1) and 
(2), and eligibility decisions under item (3) above. The description of 
the criteria must provide sufficient information so that applicants 
will be able to comment on it, know what criteria and information their 
application will be judged on, and be able to prepare responsive 
applications. The criteria must include a description of how the 
grantee will give priority to:
    (a) Entities with the greatest need. A grantee may solicit 
qualitative and/or quantitative information from applicants to 
demonstrate a need for the activities being proposed for RHP funding. A 
grantee shall consider both the projected demand for the proposed 
temporary recovery housing solution and the financial need for 
assistance.
    (b) Entities with the ability to deliver effective assistance in a 
timely manner. For example, a grantee may consider an applicant's prior 
performance related to administering prior federal awards and/or 
collaborating with other federal programs, including both HUD and HHS 
programs.
    vi. Definitions: Definitions must be adopted by grantees for the 
following terms included in the SUPPORT Act and this notice, which the 
grantee must adhere to when carrying out its RHP grant. Grantees may 
adopt definitions for the following terms used by other publicly funded 
programs that provide support for recovery from substance use 
disorders.
    (1) Individual in recovery.
    (2) Substance use disorder.
    A grantee's definitions cannot exclude individuals with certain 
types of substance issues or co-occurring disabilities, or exclusively 
target a specific type of substance use disorder.
    vii. Anticipated Outcomes and Expenditure Plan: The following

[[Page 75367]]

information about outcomes and expenditures.
    (1) Expenditures. A concise summary of how the grantee intends to 
comply with the requirement described in section II.J. that the grantee 
expends at least 30 percent of its RHP funds within one year from the 
date the funds are available to the grantee, and a concise summary of 
how the grantee intends to expend 100 percent of the RHP funds before 
the end of the period of performance. Additionally, this summary shall 
address administrative costs and describe how the grantee will expend 
no more than 5 percent of the RHP grant for its administrative costs.
    (2) Outcomes. Sufficient information on proposed outcomes so that 
the annual performance report can include a comparison of the proposed 
versus actual outcomes for each outcome measure. Grantees must report 
the number of individuals assisted in RHP activities, and the number 
individuals able to transition to permanent housing through RHP-
assisted temporary housing. Grantees should consider other outcome 
measures and are encouraged to engage with researchers to better 
understand other measurable impacts of RHP funding.
    viii. Citizen Participation Summary: The grantee must include a 
summary of the citizen participation process for RHP, the public 
comments or views provided on the RHP Action Plan, and a summary of any 
of those public comments or views not accepted and the reasons they 
were rejected. The summary shall address public comments and views 
received during any public hearing, if a hearing is required by the 
CPP. This includes virtual public hearings as permitted due to national 
or local health authorities' recommendations for social distancing and 
limiting public gatherings for public health reasons.
    ix. Partner Coordination: A summary of coordination with partners. 
RHP grantees are encouraged to coordinate with other federal substance 
abuse-related assisted partners, such as SOR grantees and SABG grantees 
from HHS, as well as other partners potentially serving the same 
populations, such as HUD's CoC Program, ESG program, HOPWA program, and 
HUD-VASH. RHP grantees are also encouraged to consult with a range of 
residential recovery service providers, such as private, faith-based 
nonprofits, public nonprofits such as Public Housing Authorities, or 
other entities assisting individuals in recovery.
    x. Subrecipient Management and Monitoring: A summary of the 
grantee's subrecipient oversight and management policies and 
procedures.
    xi. Pre-award/Pre-Agreement Costs: The grantee must include a 
description of pre-award or pre-agreement costs to be reimbursed with 
RHP funds.
    xii. Certifications: Each grantee must make the following 
certifications with its RHP Action Plan:
    (1) The grantee certifies that it has in effect and is following a 
residential anti-displacement and relocation assistance plan in 
connection with any activity assisted with funding under the RHP 
program. The grantee certifies that it will comply with the residential 
anti-displacement and relocation assistance plan, relocation 
assistance, and one-for-one replacement housing requirements of section 
104(d) of the Housing and Community Development Act of 1974, as amended 
(42 U.S.C. 5304(d)) and implementing regulations at 24 CFR part 42, as 
applicable, except where waivers or alternative requirements are 
provided.
    (2) The grantee certifies its compliance with restrictions on 
lobbying required by 24 CFR part 87, together with disclosure forms, if 
required by part 87.
    (3) The grantee certifies that the RHP Action Plan is authorized 
under state and local law (as applicable) and that the grantee, and any 
entity or entities designated by the grantee, and any contractor, 
subrecipient, or designated public agency carrying out an activity with 
RHP funds, possess(es) the legal authority to carry out the program for 
which it is seeking funding, in accordance with applicable HUD 
regulations and the grant requirements. The grantee certifies that 
activities to be undertaken with RHP funds are consistent with its RHP 
Action Plan.
    (4) The grantee certifies that it will comply with the acquisition 
and relocation requirements of the Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 
4601 et seq.), and implementing regulations at 49 CFR part 24, except 
where waivers or alternative requirements are provided.
    (5) The grantee certifies that it will comply with section 3 of the 
Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and 
implementing regulations at 24 CFR part 135.
    (6) The grantee certifies that it is following a citizen 
participation plan adopted pursuant to 24 CFR 91.115 or 91.105 (as 
imposed in notices for its RHP grant). Also, each unit of general local 
government receiving RHP assistance from a state must comply with the 
citizen participation requirements of 24 CFR 570.486(a)(1) through 
(a)(7) for proposed and actual uses of RHP funding (except as provided 
in Federal Register notices providing waivers and alternative 
requirements for the use of RHP funds).
    (7) The grantee certifies that it is complying with each of the 
following criteria: (1) Funds will be used solely for allowable 
activities to provide individuals in recovery from a substance use 
disorder stable, temporary housing for a period of not more than 2 
years or until the individual secures permanent housing, whichever is 
earlier; (2) with respect to activities expected to be assisted with 
RHP funds, the RHP Action Plan has been developed so as to give the 
maximum feasible priority to activities that will benefit low- and 
moderate-income individuals and families; (3) the aggregate use of RHP 
funds shall principally benefit low- and moderate-income families in a 
manner that ensures the grant amount is expended for activities that 
benefit such persons; and (4) the grantee will not attempt to recover 
any capital costs of public improvements assisted with RHP grant funds, 
by assessing any amount against properties owned and occupied by 
persons of low- and moderate-income, including any fee charged or 
assessment made as a condition of obtaining access to such public 
improvements, unless: (a) RHP grant funds are used to pay the 
proportion of such fee or assessment that relates to the capital costs 
of such public improvements that are financed from revenue sources 
other than RHP; or (b) for purposes of assessing any amount against 
properties owned and occupied by persons of moderate income, the 
grantee certifies to the Secretary that it lacks sufficient RHP funds 
(in any form, including program income) to comply with the requirements 
of clause (a).
    (8) The grantee certifies that the grant will be conducted and 
administered in conformity with title VI of the Civil Rights Act of 
1964 (42 U.S.C. 2000d), the Fair Housing Act (42 U.S.C. 3601-3619), and 
implementing regulations, and that it will affirmatively further fair 
housing.
    (9) The grantee certifies that it has adopted and is enforcing the 
following policies, and, in addition, must certify that it will require 
local governments that receive grant funds to certify that they have 
adopted and are enforcing: (1) A policy prohibiting the use of 
excessive force by law enforcement agencies within its jurisdiction 
against any individuals engaged in nonviolent civil rights 
demonstrations; and (2) a policy of enforcing applicable state and 
local laws against physically barring entrance to or exit from a 
facility or

[[Page 75368]]

location that is the subject of such nonviolent civil rights 
demonstrations within its jurisdiction.
    (10) The grantee certifies that the grant will be conducted and 
administered in conformity with the requirements of the Religious 
Freedom Restoration Act (42 U.S.C. 2000bb) and 24 CFR 5.109, allowing 
the full and fair participation of faith-based entities.
    (11) The grantee certifies that it (and any subrecipient or 
administering entity) currently has or will develop and maintain the 
capacity to carry out RHP eligible activities in a timely manner and 
that the grantee has reviewed the requirements of the grant.
    (12) The grantee certifies that its activities concerning lead-
based paint will comply with the requirements of HUD's lead-based paint 
rules (Lead Disclosure; and Lead Safe Housing (24 CFR part 35)), and 
EPA's lead-based paint rules (e.g., Repair, Renovation and Painting; 
Pre-Renovation Education; and Lead Training and Certification (40 CFR 
part 745)).
    (13) The grantee certifies that it will comply with environmental 
review procedures and requirements at 24 CFR part 58.
    (14) The grantee certifies that it will comply with applicable 
laws.

I. Consistency With Consolidated Plan

    As previously described, HUD is waiving Section 104(a)-(c) (42 
U.S.C. 5304(a)-(c)), 24 CFR 570.304, and 24 CFR 570.485 so that RHP 
funds are not required to be consistent with a grantee's consolidated 
plan because grantees may not have considered the needs associated with 
this special purpose funding when developing their current consolidated 
plan, strategic plan, and needs assessment. In conjunction, 42 U.S.C. 
5304(e), to the extent that it would require HUD to annually review 
grantee performance under the consistency criteria, is also waived.

J. Timeliness

    HUD is waiving the timely expenditure and obligation requirements 
of 42 U.S.C. 5304(e) and 24 CFR 570.494 and 570.902 and imposing the 
following alternative requirement: RHP funds will not be included in 
determining compliance with the requirements of 24 CFR 570.494 and 
570.902. The RHP program is subject to the following requirements 
regarding the timely use of funds:
    i. 30 Percent Expenditure in First Year. Section 8071(c)(1) of the 
SUPPORT Act requires grantees to ``expend at least 30 percent of such 
funds within one year of the date funds become available to the grantee 
for obligation.'' The date of the execution of the grant agreement will 
be used for this purpose.
    ii. 100 Percent Expenditure by September 1, 2027. All program funds 
must be expended before the end of the period of performance on 
September 1, 2027.

K. Two-Year Limitation per Individual

    RHP funds may only assist individuals in recovery from a substance 
use disorder for a cumulative period of not more than 2 years or until 
the individual secures permanent housing, whichever is earlier.

L. Eligible Activities

    Although the SUPPORT Act provides that RHP funds are treated as 
CDBG funds, not all CDBG eligible activities in section 105 of the HCD 
Act (42 U.S.C. 5305(a)) satisfy the purpose of RHP funds to provide 
stable, temporary housing to individuals in recovery from a substance 
use disorder. HUD is imposing the following waiver and alternative 
requirement to modify section 105(a) for the statutory purpose 
described in the SUPPORT Act.
    The use of RHP funds is limited to the following eligible 
activities.
    i. Public Facilities and Improvements. RHP funds may be used for 
activities under 24 CFR 570.201(c) or section 105(a)(2) of the HCD Act 
(42 U.S.C. 5305(a)(2)) only for the purpose of providing stable, 
temporary housing for individuals in recovery from a substance use 
disorder in accordance with Section 8071 and this notice.
    ii. Acquisition of Real Property. RHP funds may be used for 
acquisition under 24 CFR 570.201(a) or section 105(a)(1) of the HCD Act 
(42 U.S.C. 5305(a)(1)) for the purpose of providing stable, temporary 
housing to persons in recovery from a substance use disorder. For 
example, a nonprofit could purchase a residential property for the 
purpose of providing stable, temporary housing for individuals in 
recovery from a substance use disorder in accordance with Section 8071 
and this notice.
    iii. Lease, rent, and utilities. HUD is waiving and modifying 42 
U.S.C. 5305(a)(8), 24 CFR 570.207(b)(4), 24 CFR 570.201(e), and 24 CFR 
570.482(c)(2) to the extent necessary to permit RHP funds to be used to 
make payments for lease, rent, utilities, and associated costs (e.g., 
fees), for the purpose of providing stable, temporary housing, on 
behalf of an individual in recovery from a substance use disorder in 
accordance with Section 8071 and this notice. Under this waiver and 
alternative requirement, such payments are not limited to 15 percent of 
the RHP grant, and individual may be assisted for up to 2 years or 
until the assisted individual find permanent housing, whichever is 
earlier. These payments may not be made directly to an individual. 
These payments may not have been previously paid from other sources; 
and the payments must result in either a new service and/or a 
quantifiable increase in the level of an existing service above that 
which has been provided in the 12 calendar months prior to approval of 
the RHP Action Plan. For example, a subrecipient currently operating a 
recovery group home may use RHP funds to rent an additional house and 
increase the number of persons served. In which case, the rent and 
utility costs of the additional house may be paid with RHP funds; 
however, the rent and utilities of the original house would not be an 
eligible cost under the RHP program. In this example, an individual may 
only stay in the temporary housing assisted by RHP for a period of up 
to 2 years or until the individual finds permanent housing, whichever 
is earlier.
    iv. Rehabilitation and Reconstruction of Single-Unit Residential. 
RHP funds may be used for rehabilitation or reconstruction of publicly- 
or privately-owned single-unit residential buildings and improvements 
eligible under 24 CFR 570.202(a)(1) or section 105(a)(4) of the HCD Act 
(42 U.S.C. 5305(a)(4)) for the purpose of providing stable, temporary 
housing for individuals in recovery from a substance use disorder in 
accordance with Section 8071 and this notice.
    v. Rehabilitation and Reconstruction of Multi-Unit Residential. RHP 
funds may be used for rehabilitation or reconstruction of publicly- or 
privately-owned buildings and improvements with two or more permanent 
residential units that otherwise comply with 24 CFR 570.202(a) and 
section 105(a)(4) of the HCD Act (42 U.S.C. 5305(a)(4)) for the purpose 
of providing stable, temporary housing for individuals in recovery from 
a substance use disorder in accordance with Section 8071 and this 
notice.
    vi. Rehabilitation and Reconstruction of Public Housing. RHP funds 
may be used for rehabilitation or reconstruction of buildings and 
improvements owned and operated by a public housing authority to the 
extent eligible under 24 CFR 570.202(a)(2) and section 105(a)(4) of the 
HCD Act (42 U.S.C. 5305(a)(4)), for the purpose of providing stable, 
temporary housing for individuals in recovery from a substance use 
disorder

[[Page 75369]]

in accordance with Section 8071 and this notice.
    vii. Disposition of Real Property. RHP funds may be used for 
disposition through sale, lease, or donation, or otherwise of real 
property acquired with RHP funds subject to 24 CFR 570.201(b) and 
section 105(a)(7) of the HCD Act (42 U.S.C. 5305(a)(7)), for the 
purpose of providing stable, temporary housing for individuals in 
recovery from a substance use disorder in accordance with Section 8071 
and this notice. Eligible costs may include costs incidental to 
disposing of the property, such as preparation of legal documents, fees 
paid for surveys, transfer taxes, and other costs involved in the 
transfer of ownership of the RHP-assisted property.
    viii. Clearance and Demolition. RHP funds may be used for 
clearance, demolition, and removal of buildings and improvements, 
including movement of structures to other sites to the extent eligible 
under 24 CFR 570.201(d) or section 105(a)(4) of the HCD Act (42 U.S.C. 
5305(a)(4)) for the purpose of providing stable, temporary housing for 
individuals in recovery from a substance use disorder in accordance 
with Section 8071 and this notice. This is limited to projects where 
RHP funds are used only for the clearance and demolition.
    ix. Relocation. RHP funds may be used for relocation payments and 
other assistance for permanently or temporarily displaced individuals 
and families in connection with activities using RHP funds, to the 
extent eligible under 24 CFR 570.201(i) and section 105(a)(11) of the 
HCD Act (42 U.S.C. 5305(a)(11)).
    x. Expansion of existing eligible activities to include new 
construction. RHP funds can be used for new construction of housing, to 
the extent the newly constructed housing shall be used for the purpose 
of providing stable, temporary housing for individuals in recovery from 
a substance use disorder in accordance with Section 8071 and this 
notice. HUD is waiving 42 U.S.C. 5305(a) and 24 CFR 570.207(b)(3) and 
adopting alternative requirements to the extent necessary to permit new 
construction of housing, subject to the same requirements that apply to 
rehabilitation activities under the provisions at section 105(a)(4) of 
the HCD Act (42 U.S.C. 5305(a)(4)) and 24 CFR 570.202(b).
    xi. Grant Administration. Subject to the limitations described in 
section II.E of this notice, RHP funds may be used to pay 
administrative costs of the RHP program. These administrative costs 
include, but are not limited to, the costs related to the development 
and submission of the RHP Action Plan, costs associated with carrying 
out subrecipient monitoring and oversight, and costs associated with 
reporting to HUD.
    xii. Technical Assistance. Subject to the limitations described in 
section II.E of this notice, RHP funds may be used to pay for the 
grantee's non-administrative costs associated with providing technical 
assistance to a nonprofit or a unit of general local government to 
successfully apply for and implement the RHP program, to the extent 
eligible under 24 CFR 570.201(p) and section 105(a)(19) of the HCD Act 
(42 U.S.C. 5305(a)(19)).

M. National Objective & Overall Benefit

    To facilitate the use of the RHP funds, the following waivers and 
alternative requirements modify several national objective criteria to 
be consistent with the purpose of Section 8071. All RHP activities must 
comply with the Limited Clientele National Objective as modified by 
this notice.
    (i) Expansion of Limited Clientele National Objective to include 
RHP-assisted housing. HUD is imposing a waiver and alternative 
requirement to the limited clientele national objective criteria at 24 
CFR 570.208(a)(2) and 570.483(b)(2)(i)(B) to the extent necessary to 
enable the use of the limited clientele national objective for 
acquisition, rehabilitation, reconstruction, or new construction 
activities assisted by RHP funds that provide stable, temporary housing 
to individuals in recovery from substance use disorder, when at least 
51 percent of the individuals benefitting are low- or moderate-income 
persons. Any cost or other limitations on the participation by 
beneficiaries in RHP activities must not be prohibitive for low-income 
persons. The RHP activities, when taken as a whole, must not benefit 
moderate-income persons to the exclusion of low-income persons.
    (ii) Modification of Limited Clientele Presumptions. Persons in 
certain group categories may be presumed to be low- and moderate-income 
persons pursuant to the requirements at 24 CFR 570.208(a)(2)(i)(A) or 
570.483(b)(2)(ii)(A). HUD is modifying the requirements at 
570.208(a)(2)(i)(A) and 570.483(b)(2)(ii)(A) to add additional 
categories of groups of persons that, when served exclusively or in 
combination with groups of persons in other listed categories, may be 
presumed to benefit persons, 51 percent of whom are low- and moderate-
income, barring any evidence to the contrary. Under this alternative 
requirement, the categories are expanded to include persons who meet 
the federal poverty limits or are insured by Medicaid.
    (iii) Overall benefit to Low- and Moderate-Income Persons. Section 
101(c) of the HCD Act (42 U.S.C. 5301(c)) establishes the primary 
objective of the HCD Act to be the development of viable urban 
communities, by providing decent housing and a suitable living 
environment and expanding economic opportunities, principally for 
persons of low- and moderate-income. Unlike the CDBG program, RHP funds 
may not be used for activities to aid in the prevention or elimination 
of slums or blight, or activities designed to meet community 
development needs having a particular urgency. Therefore, all RHP funds 
must be used to support activities that benefit low- and moderate-
income persons. Additionally, administrative and technical assistance 
expenditures are counted toward low- and moderate-income benefit in the 
same proportion as RHP expenditures for other activities.

N. Program Income

    Income generated from the use of RHP funds is subject to 42 U.S.C. 
5304(j), 24 CFR 570.489(e) (states), and 24 CFR 570.500 and 570.504 
(District of Columbia) regarding program income. To expedite or 
facilitate the use of RHP funds, HUD is issuing the following 
alternative requirements to program income provisions at 24 CFR 
570.489(e) and 24 CFR 570.504 as described below.
    i. Definition of Program income. HUD is modifying 24 CFR 
570.489(e)(1) (states) to modify the definition of ``Program income'' 
to include gross income received by subrecipients that was generated 
from the use of RHP funds. In addition, HUD is modifying 24 CFR 
570.489(e)(2) (states) and 24 CFR 570.500(a)(4) (District of Columbia) 
to exclude from program income any income received and retained by a 
nonprofit operating within the grantee's jurisdiction whose primary 
mission includes serving individuals in recovery from substance use 
disorder. If a grantee chooses to require the nonprofit to return 
income generated from the use of RHP funds, the income returned by the 
nonprofit to the grantee would be defined as program income.
    ii. Treatment of program income.
    (1) Prior to closeout of an RHP grant, except as described in (2) 
below, a grantee must transfer program income to another open RHP grant 
or its annual CDBG program. Program income received by a grantee after 
closeout of all RHP grants must be transferred to the grantee's annual 
CDBG award. Once transferred to the annual program, the

[[Page 75370]]

waivers and alternative requirements that apply to the RHP grant no 
longer apply to the use of transferred program income. Rather, those 
funds will be subject to the grantee's regular CDBG program rules.
    (2) Grantees other than the District of Columbia may require that 
any subrecipient pay RHP program income to the state unless the 
exception in 24 CFR 570.489(e)(3)(ii)(A) applies. The provisions of 24 
CFR 570.489(e)(3)(ii)(A) are modified to add an additional requirement 
that the state must require a unit of general local government to 
return to the state program income generated from the use of RHP funds, 
if the program income will not be used to continue the RHP-eligible 
activity from which it was derived. Program income returned to the 
state must be used for additional RHP-eligible activities pursuant to a 
grantee's RHP Action Plan or transferred to the state's annual CDBG 
program as described in (1) above.
    iii. All RHP program income and assets shall be treated as program 
income and assets of the grantee's annual CDBG program at the earlier 
of grantee closeout or the date the grantee's RHP appropriation account 
is canceled pursuant to section II.P. of this notice.
    iv. Revolving loan funds prohibited. Because of the requirement to 
transfer program income to the annual CDBG grant program, grantees are 
prohibited from establishing revolving funds with program income 
generated from the use of RHP funds.

O. Reporting

    General reporting requirements for grantees can be found at 24 CFR 
570.507 (District of Columbia) and 24 CFR 570.491 (state).
    HUD is facilitating the use of the RHP funds by implementing 
reporting and review requirements specific to the purpose of RHP. HUD 
will use grantee reports to oversee compliance with RHP grant 
requirements and perform risk analysis that may inform HUD's monitoring 
plans. The following reporting requirements apply to all RHP grants:
    i. HUD requires each grantee to annually review and report on the 
use of RHP funds using the online DRGR system. To the extent feasible, 
HUD will configure DRGR performance measures to fit the purposes of the 
RHP program and the eligible activities described in section II.L. The 
annual performance report must include a comparison of the proposed 
versus actual outcomes for each outcome measure included in the RHP 
Action Plan. The grantee must explain, if applicable, why progress was 
not made toward meeting goals and objectives. The grantee must enter 
information in DRGR about the uses of RHP funds in sufficient detail to 
permit HUD's review of grantee data and allow HUD to assess compliance 
and risk. Required information includes, but is not limited to: The 
project name; activity; location; national objective; funds budgeted 
and expended; the funding source and total amount of any non-RHP funds 
expended for the same activity; numbers of properties and housing 
units; beginning and ending dates of activities; and numbers of low- 
and moderate-income persons or households benefiting from the 
activities.
    ii. The annual performance report will include a financial 
report(s). Each grantee will enter information into DRGR on its 
obligations and expenditures, available cash, program income, and other 
financial information for the use of RHP funds as required by HUD. 
Grantees must use the DRGR system to generate and submit a form SF-425 
federal financial report.
    iii. Each RHP grantee must submit an annual performance report 
(including financial reports) as described in this notice no later than 
30 days following the end of each federal fiscal year, beginning 30 
days after the close of the first federal fiscal year in which HUD and 
the grantee sign the RHP grant agreement and continuing until 30 days 
after the end of the last fiscal year in which the grant is open or 
fiscal year 2027, whichever comes earlier. HUD may extend the date of 
the first report for grant agreements signed by HUD and the grantee 
within 30 days of the end of the federal fiscal year. Reports must be 
submitted using HUD's DRGR system. HUD will provide grantees with 
guidance on how to submit performance reports in DRGR.
    iv. Before submitting the performance reports to HUD, the grantee 
must provide reasonable notice to citizens and make the full annual 
performance report in accordance with 24 CFR 91.105(d) and 24 CFR 
91.115(d), including the SF-425 federal financial report and the 
Consolidated Annual Performance and Evaluation Report, available for 
citizen comment for a period not less than 15 days. Performance reports 
must be available to the public in compliance with 24 CFR 91.105(d) and 
24 CFR 91.115(d), including availability in a form accessible to 
persons with disabilities, upon request (DRGR generates a version of 
the report that the grantee can download, save, and post on the 
grantee's website or share electronically).
    v. HUD shall review the performance report and determine whether it 
is satisfactory. If a satisfactory report is not submitted in a timely 
manner, HUD may suspend access to RHP funds until a satisfactory report 
is submitted, or may withdraw and reallocate funding if HUD determines, 
after notice and opportunity for a hearing, that the grantee will not 
submit a satisfactory report.

P. Period of Performance and Closeout

    Grantees must expend all RHP funds within the period of performance 
established by the RHP grant agreement. HUD is establishing a period of 
performance that begins on the date the grant agreement authorizes the 
grantee to begin to use RHP funds and ends on September 1, 2027, which 
is 29 days before the RHP appropriation account is cancelled in 
accordance with 31 U.S.C. 1552(a), 24 CFR 570.200(k), and 24 CFR 
570.480(h). Grant funds are not available for obligation and 
expenditure after the period of performance.
    HUD will close out RHP grants in accordance with the 24 CFR 
570.489(o), which imposes the closeout requirements of 2 CFR 200.343. 
For the District of Columbia, to facilitate the use of grant funds in a 
timely manner, HUD is waiving the CDBG Entitlement regulation at 24 CFR 
570.509 and imposing an alternative requirement that HUD will close out 
the RHP grant for the District of Columbia in accordance with grant 
closeout requirements of 2 CFR 200.343. This approach will allow for a 
single closeout approach for all RHP grantees.
    Under the regulation at 2 CFR 200.343(a), the deadline for all 
grantees to submit financial, performance, and other reports is 90 
calendar days after the end date of the period of performance or 
December 1, 2027.
    Before HUD and the grantee enter a closeout agreement, the grantee 
must transfer all RHP program income and assets to its annual CDBG 
program, as discussed in section II.N. above.

III. Findings and Certifications

Paperwork Reduction Act

    The information collection requirements in this notice have been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB 
Control Number 2506-0165. In accordance with the Paperwork Reduction 
Act, HUD may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection displays 
a currently valid OMB control number.

[[Page 75371]]

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for RHP grants 
under the SUPPORT Act are 14.218 (Community Development Block Grants/
Entitlement Grants), 14.225 (Community Development Block Grants/Special 
Purpose Grants/Insular Areas, and 14.228 (Community Development Block 
Grants/State's Program and Non-Entitlement Grants in Hawaii) (formerly 
CDBG Grant/Small Cities Program).

Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). During periods 
in which HUD's offices are closed to the public due to coronavirus, the 
FONSI will be available online at hud.gov. During periods when HUD's 
offices are open to the public, the FONSI will be available for public 
inspection between 8 a.m. and 5 p.m. weekdays in the Regulations 
Division, Office of General Counsel, Department of Housing and Urban 
Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500. 
Due to security measures at the HUD Headquarters building, an advance 
appointment to review the FONSI must be scheduled by calling the 
Regulations Division at 202-708-3055 (this is not a toll-free number). 
Hearing or speech-impaired individuals may access this number through 
TTY by calling the Federal Relay Service at 800-877-8339 (this is a 
toll-free number).

John Gibbs,
Principal Deputy Assistant Secretary for Community Planning and 
Development.
[FR Doc. 2020-26017 Filed 11-24-20; 8:45 am]
BILLING CODE 4210-67-P