Post-Closeout Compliance

You are responsible for ongoing compliance with the use of NSP funds and for ensuring affordability of NSP-funded properties. Carefully review the applicable regulations and notices as well as any special provisions contained in the Closeout Agreement.

For more information on each of these items, review the NSP Closeout Guide.

  • Internal Policies and Procedures to Ease Long-Term Administration: Draft policies for post-closeout administration and systems for tracking compliance with these requirements. This makes long-term compliance more manageable throughout the course of staff turnover and the passage of time.

  • Income Generated Following Closeout: Grantees continue to use program income in compliance with NSP rules and may earn additional program income that must be reported annually.

  • Use of Land-Banked Properties: The Closeout Agreement contains provisions for the identification of any program assets. This includes a list of real property held by a land bank and a plan documenting how the 10-year maximum land holding requirement will be met as required by the Unified NSP Notice.

  • Use of DRGR: Grantees must continue to report annually in DRGR on the status of activities funded with program income that were open as of closeout including the final reporting of beneficiaries, accomplishments, and affordability data; any receipts of program income following closeout and the use of that program income through the creation of program income vouchers as well as reporting of beneficiary and accomplishment data associated with the use of program income; and affordability information of all units funded with NSP grant funds and program income.

  • Reporting During Affordability Period: All NSP grantees must report annually on continued affordability restrictions on NSP assisted properties. Grantees or their designated responsible organizations must ensure that continued affordability requirements are met for the duration of the term of affordability.

  • Records Management and Retention: An organized system must be in place to manage existing records and to prepare for incoming documents that will be used to update inventories. Records management requirements are outlined in 24 CFR 570.506, 42 USC 12707(a)(4).

  • Flood Insurance: Grantees must ensure that flood insurance coverage is maintained for property located in any area identified by FEMA as having special flood hazards. The grantee is responsible for assuring that flood insurance under the National Flood Insurance Program is obtained and maintained by any affected property owners indefinitely (24 CFR 58.6).

  • Change in Use: The Closeout Agreement must include provisions for the use of NSP-assisted properties in accordance with the change in use principles in 24 CFR 570.505(a). These rules apply if a change in use takes place within five years of closeout.

  • Environmental Reviews: Prior to the drawdown of any NSP funds, environmental reviews are required for most grantees and there should be an Environmental Review Record (ERR). Documentation should be kept on file for the duration of the records retention period.

  • Loan Loss Reserve Fund: Grantees should develop a set of policies and procedures to guide the operation of the Loan Loss Reserve Fund. Grantees must be able to access details on each loan guaranteed, including the amount of funds held, public records information, and original buyer qualification documents.