Eligibility

• Hosted listening sessions across the state in August 2019;
• Conducted a survey of municipalities and other stakeholders;
• Solicited public input through one-on-one outreach; and
• Researched and evaluated best practices and program models.

The goals identified through the outreach efforts include increasing funds available to municipalities, building capacity and providing support for downtown revitalization and redevelopment.

CDFA also engages in the State Citizen Participation Plan outlined here: Citizen_Participation_Plan_2019.

Every applicant and recipient of CDBG funds must comply with the citizen participation requirements provided in federal law and described in this chapter. Some of the requirements will be checked by CDFA during application review; others will be verified when grant projects are monitored.

See Implementation Guide Chapter 4: Grantee Requirements for more information about required Citizen Participation.

There is a broad range of activities that may be assisted with CDBG funds as defined in Section 105(a) of the HCDA, as amended. States that administer a non-entitlement CDBG program are required to establish procedures for distributing the funds and identification of the activities (priorities) which will be eligible for funding under the state’s program. These priorities are described within the MOD. The priorities eligible for funding under New Hampshire’s CDBG program are described below.

• Implementing the housing and community development plan and conforming to the municipality’s master plan and ordinances; or
• Preserving and promoting existing neighborhoods and community centers; or
• Restoring and preserving properties which have historic, cultural, architectural or aesthetic value;
• Solving community problems with long term benefits and innovative solutions; or
• Successfully raising funds or securing matching funds and resources from public and private sources; or
• Funding needed projects for which other private or public funding is not available and is consistent with the national objectives; or
• Community development grants shall, at a minimum, provide improved housing in accordance with section 8 standards, public facilities or employment opportunities primarily to low and moderate income persons or households. Grants shall not benefit moderate-income persons to the exclusion of low-income persons.

Current Year (2020) Objectives

• Increase the funds and capacity for communities to develop and implement community economic development projects.
• Provide additional resources for the development of affordable housing that supports the revitalization of New Hampshire’s downtowns.
• Align economic development tools to better leverage public and private resources that have a positive community impact.
• Reduce the regulatory burden on communities seeking access to resources by streamlining state and federal program policies and administration requirements.

The final Annual Allocation from HUD amount will be posted on CDFA’s website.

• CDBG awards will be obligated and announced from the current annual grant within 15 months of the state signing the grant agreement with HUD (24 CFR Part 494(b)(1); and
• Any recaptured, liquidated funds and program income on hand will be expeditiously obligated and announced in accordance with (24 CFR Part 570.494(b)(2).

Any recaptured, liquidated funds and program income received by CDFA will be tracked and disbursed to projects eligible for funding under the current MOD.

Entitlement Communities are not included in the state’s Community Development Block Grant (CDBG) program because they receive CDBG funds directly from the U.S. Department of Housing and Urban Development (HUD). Those entitlement communities are: Manchester, Nashua, Portsmouth, Dover, and Rochester.

Administration of Activities
Activities which are eligible may be undertaken by the grantee/recipient through:

• Its employees; or
• Agreements with a contractor or sub recipient through procurement procedures governed by 24 CFR 85.36 or OMB Circular A-110, whichever applies.

Financial Assistance
Subject to the specific requirements of each type of grant or subcategory, the following uses may be eligible for CDBG funds:

• A direct grant to a grantee; or
• Grants, loan guarantees, interest rate subsidies or loans to an eligible sub recipient by the grantee;
• Interest rate subsidies or other favorable terms from a bank participating in the project with the grantee; or
• Any other innovative financing used either singly or in combination with items listed above, with permission from CDFA.

Project Timeline
All grants from the CDBG-funded housing award must be completed within 18 months after execution of the funding contract with CDFA. Any unobligated funds in the CDBG award may be recaptured by CDFA after this time period.

Matching Funds
All project funds necessary to complete the proposed project must be available and committed at the time the application is received by CDFA.

Unexpended Grant Funds
Grant funds not used for activities as shown in the approved contract budget will be recaptured and made available to other communities in accordance with the rules contained within this MOD.

CDBG funds cannot be used for facilities owned and/or maintained by a state or federal agency. CDBG funds cannot be used to offset locally budgeted funds or to replace state or federal funds. All CDBG projects must comply with OMB Circular A-87 “Cost Principals for State and Local Governments” and 2 CFR 300. In addition, 24 CFR 570.489(d) (2 CFR 200.444) requires that CDBG funds are not used for general expenses required to carry out other responsibilities of state and local governments.

Joint Projects
Two or more local governments (for example, a city and a county, or two cities) may work on an application for a regional project. In such cases, only one jurisdiction can be the primary applicant and act as the responsible party under the contract with the state. Joint applications where two or more parties are equally responsible will not be accepted.

Regional projects are activities that benefit more than one jurisdiction and address a common problem in a region. The maximum funding available for a joint application shall be the same as for an individual applicant.

Pass Through
Cities and counties cannot “pass through” the awarded funds to another city or county to carry out the project activities. The recipient must carry out the project activities and remain fully responsible for the grant-funded project’s compliance with all federal and state requirements. In other words, the project must be under the direct control of the grant recipient at all times.

Project Phasing
Projects cannot be divided into phases to obtain multiple CDBG grants for the same facility. Some examples of project phasing not allowed under the program include:

• Separating a public works project into phases, such as collection system improvements in one-phase and treatment system improvements into another phase in order to apply for more than the maximum grant within a five-year period; or
• Building one portion of a public/community facility now, and then building the remaining portion later, in order to qualify for two grants for the same facility.

Limits on Applications
To comply with federal requirements pertaining to the timely distribution and expenditure of funds, the Community Development Block Grant program will have the following application limits for all projects assisted in whole or in part with Community Development Block Grant funds in any one program year:

1. Community Development Housing Grants-
A Grantee may apply for Housing projects for the total limit of $500,000 per program year;

2. Community Development Public Facility Grants-
A Grantee may apply for Public Facilities projects for the total limit of $500,000 per program year;

3. Economic Development Grants-
A Grantee may only apply for projects from the following categories and shall not exceed $500,000 per program year:
a. Business Loan
b. Real Estate Development
c. Public Infrastructure
d. Grant to a Nonprofit
e. Job Training

Microenterprise Development – Grantee may also apply for additional $500,000 for projects in this category in addition to the $500,000 limit for categories listed in a through e, above.

Business Technical Assistance – Grantee may also apply for additional $300,000 for projects in this category in addition to the $300,000 limit for categories listed in a through e, above.

4. Planning Grants:
a. The maximum grant award of $25,000 shall be made only for studies, which include architectural, engineering design or redesign, energy design review, energy audit and/or economic analysis, and a plan or approach to the study which has the potential for achieving the goals stated in the proposal.
b. There shall be no yearly limit on the number of planning grant applications that can be submitted and received.

5. Emergency Grants:
A Grantee may only apply for one project per year from one of the following categories:
a. A municipality with a population of 10,000 or under shall not exceed $350,000 for a one-year grant(s); or
b. A municipality in this category with a population above 10,000 shall not exceed $500,000 for a one year grant(s).

CDBG receipts $100,000
Total Expenditures and Incurred Obligations $1,000,000

Ratio:
(CDBG Receipts)/ (Total (Federal?) Expenditures and Incurred Obligations) ($100,000)/($1,000,000)=0.1 0.1

Total Cost of A-133 Audit $5,000

Eligible CDBG reimbursable portion of the audit cost
(Total Audit Cost) x (Ratio)
($5,000) x (0.1) = $500 $500

Grant Administration Fee
For all categories that allow grant administration as an eligible activity, up to 10 percent of the grant award, but not more than $25,000 may be used to pay for grant/project administration costs, including overall project management, coordination, monitoring, and evaluation. Recipients may use some of the grant/project administration allowance to conduct activities to further Fair Housing in their communities.

In addition to the grant administration allowance, the following limitations apply:

Environmental Review
Up to a maximum of $5,000 per project is allowed to prepare and complete a full environmental review record including any associated wetlands delineations, 8-step floodplain/wetlands processes, biological assessments, pedestrian survey’s, SHPO communication etc., to meet all the requirements of the most current Grant Management Handbook and approved by CDFA, if needed. The complete record must be ready for public comment. Any amount of funds in excess of the $5,000 must be paid for with local or non-CDBG funds.

Legal Fees
There is no maximum limit on costs associated with legal fees directly related to the project as long as the fee is reasonable and consistent with fees charged for projects with a similar scope of work in the local market.

Property Appraisal Fees
There is no maximum limit on costs associated with property appraisal fees related to property acquisition as long as the fee is reasonable and consistent with fees charged for projects with a similar scope of work in the local market.

Grant Writing Fee
For Housing, Public Facilities, Urgent Need and Economic Development Category
To prepare funding applications to CDFA, consultant fees for writing grant applications shall be allowable for up to $4,000 per application; Municipalities that write their own applications shall be eligible to receive up to $4,000 per application based on actual documented costs; and Sub recipients shall not be eligible to receive any grant funds for application writing. Only projects that are funded will be eligible for reimbursement.

For a Planning Application
Consultant fees for writing and preparing grant applications shall qualify as administrative costs, but shall not exceed $1,500 per application. Municipalities that write their own applications shall be eligible to receive up to $1,500 per application based on actual documented costs; and Sub recipients shall not be eligible to receive any grant funds for application writing. Only projects that are funded will be eligible for reimbursement.

Other Administration Costs
Project Cost – Program Management Services (Only applies to housing rehabilitation projects.)
Up to 20 percent of the grant award may be used for the combined costs associated with grant administration and program management. Of this amount no more than is reasonable to complete the project may be used for grant administration costs. Program management costs are expenses directly related to carrying out eligible program activities such as working with low and moderate income eligible clients. These costs are not considered to be grant/project administration costs because they provide a direct service to clients eligible under the low and moderate income national objective. Refer to the Guide for Grant Administration/Activity Delivery Costs/Program Management Costs for identification of the eligible grant administration, environmental review, attorney fees, appraisal costs, program management and other costs.

Limitations on Architectural and Engineering Costs
CDFA will not approve grant awards that include budgets that contain more than the following percentages for architectural and engineering work regardless of whether the item is paid for with grant funds or other funding resources:

There is no maximum limit on costs associated with Architectural and Engineering costs directly related to the project as long as the fee is reasonable and consistent with fees charged for projects with a similar scope of work in the local market.

The reasonable work generally includes: project design, surveying, preparation of bid and contract documents, review of bids, project/construction oversight, preparation of as-built drawings and operation and maintenance plans. Professional services contracted out by the engineering/architectural firm for project geotechnical evaluation, surveying, core samples, or other extra services are not generally included in the above stated limit for engineering and architectural costs. For further assistance, contact CDFA staff.

Preliminary engineering/planning documents, final design engineering documents and construction oversight in projects funded in full or in part with CDBG funds must be prepared and stamped or conducted by a registered professional engineer or architect licensed to do work within the State of New Hampshire.

Limits on Construction Contingencies
Construction contingencies are limited to a maximum of 10 percent of the projected construction line item cost.

Pre-Agreement Costs
In any project assisted in whole or in part with CDBG funds, costs incurred after a grant award has been made but prior to execution of a grant contract are not eligible for reimbursement unless there are provisions in the grant contract allowing for payment of specific pre-agreement costs. The activities must also be eligible and undertaken in accordance with the requirements of the Community Development Block Grant program/future contract requirements and the federal environmental review rules at 24 CFR Part 58. Consult with CDFA staff during project development for pre-agreement cost activities.

If pre-agreement costs are to be requested, the applicant must provide a letter with the application, requesting pre-agreement costs that clearly explains and identifies:
1. The amount of funds needed, by budget line item;
2. An explanation as to why pre-agreement costs are necessary for the completion of the project;
3. The timeline in which the funds will be expended; and
4. Documentation the federal environmental review rules at 24 CFR Part 58 have been met. Costs incurred prior to award of the grant to a municipality are generally not eligible for reimbursement in any project assisted in whole or in part with CDBG funds. Exceptions can be made for the following activities, with prior written approval by CDFA:
a. Environmental reviews
b. Income Surveys
c. Grant Writing
d. Legal Services
e. Noticing related to relocation and/or acquisition activities;
f. Any other activities deemed as a reasonable cost by the authority (waiver required)

The application must describe the pre-agreement costs within the project description and show the costs in the project budget.

Ineligible Costs
Any activity not listed under eligible costs is generally considered ineligible. Check with CDFA with any further questions

Work Performed by Staff of the Grantee (Force Account)
Grantees planning to pay their own staff with grant funds for administration and/or force account work including, but not limited to, engineering, design and inspection services, construction labor and operation of locally owned equipment must consult with CDFA and receive approval prior to submitting an application.

• Benefiting Low- and Moderate-Income (LMI) Persons
  The LMI National Objective is often referred to as the primary National Objective as the regulations require that States expend at least 70 percent of their CDBG funds on activities that benefit low-and moderate-income people as defined below. In addition to ensuring that the required percentage of CDBG funds serve people in the overall LMI category, UGLGs must also ensure that the activities proposed, when taken as a whole, will not benefit moderate-income people to the exclusion of low-income people.

The National Objectives are described in detail in Implementation Guide Chapter 2: National Objectives and Eligible Activities.