In response to extraordinary impacts from disasters, Congress sometimes appropriates additional funding to the Community Development Block Grant Disaster Recovery (CDBG-DR) funding. Unlike other recovery assistance programs administered by the U.S. Federal Emergency Management Agency (FEMA) and the U.S. Small Business Administration (SBA), CDBG-DR assistance is not permanently authorized. After Congress appropriates funding to the CDBG-DR program, HUD formally announces the CDBG-DR awards and publishes rules for the awards in a Federal Register notice.
The Federal Register notices describe the rules that govern the specific CDBG-DR appropriation, and these notices modify the Housing and Community Development Act of 1974 (HCD Act) to reflect any statutory and regulatory waivers and alternative requirements granted by HUD.
CDBG-DR grants are subject to Title I of the HCD Act, (42 U.S.C. § 5301 et seq.) which governs all CDBG programs. Grantees are also subject to the CDBG regulations at 24 CFR Part 570, unless modified by waivers and alternative requirements included in the applicable Federal Register Notice. CDBG-DR grantees must also comply with the applicable requirements of 2 CFR Part 200, which provides the Federal government’s guidance on administrative requirements, cost principles, and audit requirements.
CDBG-DR funds can only be spent to meet the recovery needs caused by the disaster(s) specifically stated in the appropriation. Typically, appropriations further limit use of funds to the “most impacted and distressed” areas resulting from a major disaster. HUD uses damage estimates and other data from FEMA and SBA to determine the eligible grantees, geographical areas to be served or prioritized, and allocation amounts. Based on this data, HUD may attach additional restrictions, e.g., units of general local government (UGLG) in receipt of a direct award may only spend funds within that local government’s jurisdiction (not within the county at large). Eligible disasters and any geographic restrictions are identified in the Federal Register Notice that governs the use of funds.