The requirements for matching ESG funds are described in section 576.201 of the ESG Interim Rule, and the requirements for documenting matching contributions are described in section 576.500(o).
In general, federal (other than ESG), state, local, or private funds may be used to satisfy the requirement that the recipient provide matching contributions to ESG, so long as the following conditions are met:
- The matching funds are contributed to the ESG program and expended for the recipient or subrecipient’s allowable ESG costs.*
- If the matching funds are from another federal program, there is no specific statutory prohibition on using those funds as match;
- The matching funds are used in accordance with all requirements that apply to ESG grant funds, except for the expenditure limits in 24 CFR 576.100. This includes requirements such as documentation requirements, eligibility requirements, and eligible costs.
- The matching funds are expended (that is, the allowable cost is incurred) after the date HUD signs the grant agreement for the ESG funds being matched.
- The matching funds are expended by the expenditure deadline that applies to the ESG funds being matched;
- The matching funds have not been and will not be used to match any other Federal program’s funds nor any other ESG grant;
- The recipient does not use ESG funds to meet the other program's matching requirements; and
- The recipient keeps records of the source and use of the matching funds, including the particular fiscal year ESG grant for which the matching contribution is counted.
*Note: because the matching funds are contributed to the ESG program and expended for the recipient or subrecipient’s allowable ESG costs, the following are not allowed to be used as match:
- SNAP benefits (food stamps), because the funds are being used to cover the program participant’s costs;
- Housing Choice Vouchers, because the funds are used to pay the PHA’s obligations under its Housing Assistance Payment contract with the owner; and
- The tenant’s portion of the rent, because this amount is the tenant’s obligation.
Please also note the following:
- HUD’s matching requirement applies to the recipient. HUD provides the recipient with the discretion to pass that requirement on to subrecipients.
- The matching funds are provided based on the total grant amount and do not have to be provided on a component-by-component basis. For example, if a recipient is spending $10,000 on HMIS, they do not need to find $10,000 in data collection funds from another source to use as match.
- HOME-TBRA funds cannot be used as match because the requirements for rental assistance are significantly different between the two programs. In particular, under the HOME TBRA program (24 CFR parts 92.209 and 92.253), a PJ and its subrecipient(s) may not require a program participant to accept any services (a PJ and its subrecipient(s) may offer services, but cannot require them). In contrast, when providing ESG homelessness prevention or rapid re-housing assistance to a program participant, the recipient or subrecipient must require the program participant to meet with a case manager not less than once per month to assist the program participant in ensuring long-term housing stability and develop a plan to assist the program participant to retain permanent housing after the ESG assistance ends (24 CFR 576.401(e)). Because of these differences in the two programs, HOME TBRA funds may not be used as Match for the ESG funds.
- SHP funds generally cannot be used as match, because very few activity costs are allowable under both SHP and ESG. However, in some cases, such as where SHP funds are used for HMIS or street outreach costs that are allowable under ESG, SHP funds can be counted as match in accordance with conditions 1-8 above. Please note, however, that HMIS costs are only eligible to be used as match under ESG if they are eligible under section 576.107 and allocable to the ESG program, whether charged as direct costs or indirect costs. If the SHP HMIS funds are being used to pay for SHP projects’ data entry, those data entry costs are not allocable to the ESG program and the funds used cannot be counted as match.