The HEARTH Act revised the Emergency Shelter Grants Program to create the Emergency Solutions Grants (ESG) Program. The ESG Program provides funding to: (1) improve the number and quality of emergency shelters for homeless individuals and families; (2) help operate these shelters; (3) provide essential social services to shelter residents; and (4) prevent families and individuals from becoming homeless.
HUD is no longer allocating Emergency Shelter Grants funds to recipients. The regulations for the Emergency Solutions Grants Program are in effect for the second allocation of FY 2011 ESG funds and beyond.
The Emergency Shelter Grants Program is designed to assist homeless individuals and families, and subpopulations within this group, such as victims of domestic violence, youth, people with mental illness, families with children and veterans. Emergency Shelter Grants Program funds can also be used to aid people who are at imminent risk of becoming homeless.
Eligible Emergency Shelter Grants Program recipients generally consist of metropolitan cities, urban counties, territories, and states. Metropolitan cities, urban counties, and territories may provide Emergency Shelter Grants Program funds for projects operated by local government agencies and private nonprofit organizations.
States must subgrant all of their Emergency Shelter Grants Program funds (except for some funds for administrative costs) to units of general purpose local government and/or private nonprofit organizations. State Emergency Shelter Grants Program funds provided directly to nonprofit organizations must have the approval of the local government in which the project is located.
Eligible recipients must submit an approved Consolidated Plan and Annual Action plan in order to receive Emergency Shelter Grants Program funds.
Major Renovation, Rehabilitation, or Conversion
The Emergency Shelter Grants Program funds renovation, major rehabilitation, or conversion of buildings for use as emergency shelters or transitional housing for homeless individuals and families. If Emergency Shelter Grants Program funds are used for moderate rehabilitation of a building, it must be used as a shelter for 3 years. If Emergency Shelter Grants Program funds are used for major rehabilitation or conversion project of a building or a shelter, the project must be used as a shelter for 10 years.
The Emergency Shelter Grants Program funds provision of essential services, including services concerned with employment, health, drug abuse, and education. Essential services costs may not exceed 30 percent of the total grant.
The Emergency Shelter Grants Program funds the payment of shelter maintenance, operation, rent, repairs, security, fuel, equipment, insurance, utilities, food, and furnishings. Not more than 10 percent of the total grant amount may be used for staff costs.
The Emergency Shelter Grants Program funds the development and implementation of homelessness prevention activities, such as short-term and first-month's rent, eviction or foreclosure assistance, utility payments, security deposits, landlord-tenant mediation, and tenant legal services. These funds may only be used if the household meets the following criteria:
Not more than 30 percent of the aggregate amount of all assistance to a State or local government under this subtitle may be used for homeless prevention activities.
Eligible costs for grant administration include accounting for Emergency Shelter Grants Program funds, preparing HUD reports, and audits, and must not exceed 5 percent of the total grant. For state recipients, the administrative funds must be shared with their subrecipients.
Please note: Property acquisition or new construction, staff recruitment, or training, fundraising, and direct payments to individuals are ineligible activities.
The Emergency Shelter Grants Program allocates funds based on the Community Development Block Grant (CDBG) formula, which measures community needs based on several objective measures, including poverty levels, population, growth lag, overcrowding in housing, and the age of housing. If an allocation to a metropolitan city or urban county is less than .05 percent of the total funds, the amount is added to the allocation for state. The allocations among the U.S. territories are based on their populations.
Local governments must spend Emergency Shelter Grants Program grant funds within 24 months of grant award.
States must make grant funds available to recipients within 65 days of the date of the grant award by HUD. Each state recipient must obligate its grant funds by 180 days of availability from the state, and spend the entire grant within 24 months of grant award. However, states that set-aside homeless prevention funds may make available funds within 180 days, but the recipients of these funds must obligate and spend them within 30 days and 180 days respectively.
Local government grantees must match grant funds with an equal amount of funds from cash or the following in-kind sources: new staff or volunteer time, the donation of materials and buildings, or the value of any lease on a building.
States are exempt from matching the first $100,000 of their awards, but must provide the benefits of that exemption to their recipient local governments and nonprofit organizations that are least capable of providing the State with matching amounts.
For additional requirements, see the regulation at 24 CFR Sections 576.1 through 576.67.