Hurricane Sandy Community Development Block Grant Disaster Recovery Grants (CDBG-DR)

Recipients may undertake a wide range of activities directed toward addressing unmet needs of disaster relief, long-term recovery, restoration of infrastructure and housing, and economic revitalization. However, CDBG DR funds may not be used for activities reimbursable by other sources of funds, such as those made available by the Federal Emergency Management Agency, the Army Corps of Engineers, or private insurance. Grantees must conduct an assessment of community impacts and unmet needs to guide the development and prioritization of planned recovery activities and develop their own programs and funding priorities as long as programs/activities conform to the statutory standards and program regulations. Some of the specific activities that can be carried out with Community Development Block Grant Disaster recovery (CDBG DR) funds include buying damaged properties in a flood plain and relocating residents to safer areas; relocation payments for people and businesses displaced by the disaster; debris removal not covered by FEMA; rehabilitation of homes and buildings damaged by the disaster; buying, constructing, or rehabilitating public facilities such as streets, neighborhood centers, and water, sewer and drainage systems; code enforcement; homeownership activities such as down payment assistance, interest rate subsidies and loan guarantees for disaster victims; public services (generally limited to no more than 15 percent of the grant); helping businesses retain or create jobs in disaster impacted areas; and planning and administration costs (limited to no more than 20 percent of the grant). Eligible activities must meet at least one of three program national objectives: benefit persons of low and moderate income, aid in the prevention or elimination of slums or blight, or meet other urgent community development needs because existing conditions pose a serious and immediate threat to the health and welfare of the community where other financial resources are not available. CDBG Disaster Recovery grants primarily benefit low-income residents in and around communities that have experienced a natural disaster. At least 50 percent of each grantee's CDBG-DR grant award must be used for activities that benefit low- and moderate-income (LMI) persons. These can be either activities in which all or the majority of people who benefit have low or moderate incomes or activities that benefit an area or service group in which at least 51 percent of the populous are of low- and moderate-income. Recipients may contract with other local agencies or nonprofit organizations to carry out components of their programs. Grantees must meet the 50 percent LMI expenditure requirement unless a waiver has been requested by the grantee and approved by HUD. Recipients may only carry out eligible activities as listed in 24 CFR 570.201-207 or for which a waiver or alternative requirement has been granted by the Secretary, based upon a determination that good cause exists and that the waiver or alternative requirement is not inconsistent with the overall purposes of Title I of the HCD Act.

CDBG-DR grantees may use up to five (5) percent of the total grant award for grant administration and up to fifteen (15) percent of the total grant award for planning costs. In addition, grantees are limited to spending a maximum of fifteen (15) percent of their total grant amount on public services. Public service costs subject to the fifteen (15) percent cap are those defined in 42 U.S.C. 5305(a)(8) and more broadly in 24 CFR 570.201(e). For all other eligible uses, the aggregate use of CDBG-DR funds shall principally benefit low- and moderate-income families in a manner that ensures that at least seventy (70) percent, (or another percentage permitted by HUD in a waiver), of the grant amount is expended for activities that benefit low and moderate income persons.