Why is HUD allowing the transfer of NSP program income to the Community Development Block Grant Program (CDBG) program?

Date Published: July 2016

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The Notice of Neighborhood Stabilization Program: Closeout Requirements and Recapture (Closeout Notice) published November 27, 2012, required that program income generated by NSP-assisted activities must continue to be used for NSP uses with the exception of minimal amounts received after grant closeout. In attempting to implement this requirement, HUD has become aware that it is, in many instances, administratively unworkable for NSP grantees for some of the following reasons:

  • For NSP grantees that are generating a substantial amount of program income, the requirement to use this program income prior to drawing additional funds from the grant’s line of credit is also impeding their ability to completely expend their NSP grant funds. Under the original rules, these grantees would be unable to close their NSP grants until all program income is spent, which could be at a point very far in the future.
  • Some grantees no longer have an adequate pool of NSP-eligible foreclosed or abandoned properties in their target areas although they do have other needs that CDBG funding could be used to address.

Nevertheless, NSP grantees may retain some or all program income in the NSP program; this transfer to CDBG is voluntary.

Tags: NSP Financial and Grants Management - Program Income

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