CDBG Entitlement FAQ

What happens in IDIS when a CDBG grantee misses a Section 108 repayment?

Date Published: March 2019

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Failure to remit the Section 108 payment seven (7) days prior to the due date constitutes a permissible basis for HUD to declare the Section 108 Guaranteed Loan in default. When a grantee does not make a timely payment on its Section 108 Guaranteed Loan, the CDBG grant funds are deducted from its line(s) of credit to pay amounts due on the Section 108 Guaranteed Loans. The deduction is processed in IDIS as a draw voucher, entitled Manual Payment, under Activity #2. Manual Payment vouchers are listed under Activity #2 on the grantee's IDIS PR07 report.

When a Manual Payment voucher is processed in IDIS, the grantee has the option to reimburse its line of credit for the amount deducted. The grantee needs to return the funds to the same origin grant from which funds were deducted. If the grantee decides not to reimburse its line of credit for the Manual Payment, then it must associate these vouchers in IDIS with a Section 108 repayment activity. The grantee will need to set up a new activity with a matrix code of 19F or 19G. For planned repayments of Section 108 loans, please use matrix code 19F. For unplanned repayments, use matrix code 19G. The activity funded amount should be equal to the amount of the Manual Payment. After the section 108 repayment activity has been funded, the grantee will need to revise/transfer draws of the Manual Payment from Activity #2 to the repayment activity. Please note, for 2015 and later grants, the grantee can only revise draws from one activity to another activity from the same grant year and fund type. Therefore, if the Manual Payment was deducted from 2015 or subsequent grant years, the grantee must fund the Section 108 repayment activity from the same origin year grant. For example, if the Manual Payment was deducted from the 2017 grant, the Section 108 repayment activity will need to be funded with the 2017 grant.

Tags: CDBG Entitlement Program IDIS