Recipients/subrecipients must minimize displacement of persons (including families, businesses, nonprofit organizations, and farms) in buildings that are currently assisted with CoC program funds (§ 578.83(b)). Costs associated with relocating persons displaced by a project assisted with CoC funds are eligible program costs.
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Section 578.61 allows recipients and subrecipient to use CoC Program grant funds to pay for the costs to provide relocation payments and other assistance to persons displaced by a project assisted with grant funds. Recipients may pay for these costs out of their operating budget line item or use program income to pay for these costs. Please note, if grant funds or program income are not used to pay for these costs and instead the recipient uses funds other than grant funds, they could count the money spent on those costs as match, so long as the costs meet the match requirements for the CoC Program.
Be aware, in order to qualify for temporary displacement under the CoC Program, the program participant may not be displaced from their unit for more than one year (§ 578.83(b)(2)). If the program participant will be displaced for more than one year, then the recipient or subrecipient is required to treat the family as permanently displaced and offer relocation assistance and payments (§ 578.83(c)).
Participants in an existing CoC-funded project would not be required to relocate temporarily unless they could be offered a decent, safe, and sanitary unit in the same building or complex upon project completion, under reasonable terms and conditions. Participants temporarily relocated for greater than one year must be treated as permanently displaced and offered relocation assistance. If relocation may be necessary, CoCs should reach out to their local HUD field office for guidance as there are strict guidelines to follow when permanently relocating tenants.