This addendum to the HRP guidelines serves to delineate specific regulations that come into effect when Community Development Block Grant Disaster Recovery (CDBG-DR) funds are utilized. CDBG-DR funds have been awarded to the State of Colorado as part of the recovery effort for the Marshall Fire and Straight-Line Wind event (DR-4634).
This CDBG-DR program is part of a larger suite of funds under the Colorado Housing Recovery Program and is primarily intended to provide additional rebuilding resources for those in need of assistance in order to remain in their communities following a natural disaster. Additionally, these funds are intended to reduce the extreme financial hardship of rebuilding, particularly for households in lower income categories. The program also aims to promote rebuilding in accordance with high performance building standards adopted by local communities and voluntary sustainable building elements that exceed local code requirements, including the incorporation of fire-, wind-, and water-resistant building materials and energy efficiency measures.
This addendum contains supplemental guidelines for the CDBG-DR portion of the Colorado Housing Recovery Program (HRP). Please refer to the above Housing Recovery Program Guidelines for the complete list of eligibility requirements for the program. The HRP Guidelines will detail the specific requirements for the following areas:
- Eligibility
- Award Types
- Eligible Expenses
- Application Process
- Award Determination
- Duplication of Benefits (DOB)
- Household Income Calculation and Determination
- Grant & Forgivable Details
- Traditional Loan Details (Non-CDBG-DR funds)
- Origination Procedures
- Appeals Policy
- Equal Opportunity
CDBG-DR Disaster Tieback
This program addresses the unmet needs tied to providing new resilient, affordable housing to improve the housing stock in the disaster-impacted, most impacted and distressed (MID) areas. The MID area assigned by HUD is Boulder County, Colorado. No CDBG-DR funds will be used to fund projects outside of the MID area or that do not have a tieback to the Marshall Fire and Straight Line Winds Event.
CDBG-DR Environmental Review
All properties must pass an Environmental Review process completed by the State. No application may receive funds from the CDBG-DR Program without the address for that assistance being included in the Environmental Review Release of Funds.
CDBG-DR Floodplain Elevation Requirements
All residential properties located in the one percent annual chance (or 100-year) floodplain, that receive CDBG-DR assistance for new construction, reconstruction, rehabilitation of substantial damage, or rehabilitation that results in substantial improvement must be elevated with the lowest floor, including the basement, at least two feet above the one percent annual chance floodplain elevation (base flood elevation).
CDBG-DR Maximum Award
As per the CDBG-DR Action Plan, the CDBG-DR portion of the Housing Recovery Program allows up to $100,000 in assistance to affected eligible homeowners. In addition, up to $30,000 for wind and wildfire mitigation measures is available to eligible homeowners.
CDBG-DR Supported Construction and Green Building Standards
All rehabilitation, reconstruction, or new construction must meet an industry-recognized standard that has achieved certification under at least one of the following programs:
- Enterprise Green Communities;
- 2018 IBC- Residential / Commercial;
- 2021 IECC - Residential / Commercial;
- LEED (New Construction, Homes, Midrise, Existing Buildings Operations and Maintenance, or Neighborhood Development);
- ICC–700 National Green Building Standard Green+ Resilience;
- Living Building Challenge;
- or any other equivalent comprehensive green building program acceptable to HUD; or
- 2021 IECC - Residential / Commercial
All such covered construction must achieve a minimum energy efficiency standard, such as:
- 2023 National Electrical Code (NEC);
- ENERGY STAR (Certified Homes or Multifamily High-Rise);
- DOE Zero Energy Ready Home;
- EarthCraft House, EarthCraft Multifamily;
- Passive House Institute Passive Building or EnerPHit certification from the Passive House Institute US (PHIUS), International Passive House Association;
- Greenpoint Rated New Home, Greenpoint Rated Existing Home (Whole House or Whole Building label);
- Earth Advantage New Homes; or
- any other equivalent energy efficiency standard acceptable to HUD.
Construction Requirements
- If the unit to be assisted was built prior to 1978 and the type of assistance offered will be rehabilitation, the assisted unit will be tested for the presence of lead based paint. Lead paint inspection provides two benefits: (1) the costs of abatement are considerable and must be factored into the cost estimates for rehabilitation and (2) the health risks to residents, particularly children, may be severe so any presence of lead based paint in an assisted unit, even one that is to be reconstructed, must be reported so that the residents may seek appropriate medical attention.
- Housing that is constructed or rehabilitated with CDBG-DR funds must meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances at the time of project completion. International Residential Code (IRC) (with windstorm provisions) and International Building Code (IBC) which will be used as required and as appropriate. All rehabilitation projects must comply with all applicable local codes and ordinances.
- Any multifamily housing subsidized with CDBG-DR assistance must meet the Americans with Disabilities Act and accessibility requirements.
- All housing units must be connected to utilities at the time of completion, including to municipal water, sewer, and broadband.
Federal Regulations
The Housing Recovery Program is consistent with the following regulations set forth by HUD that are requirements for the use of CDBG-DR funds:
- 87 FR 31636 (Colorado’s First Allocation of CDBG-DR Funds)
- 88 FR 3198 (Colorado’s Second Allocation of CDBG-DR Funds)
- HUD Federal Register Notice 84 FR 28836
- HUD Federal Register Notice 84 28846
- Section 312 of the Robert T. Stafford Disaster Assistance and Emergency Relief Act (42 U.S.C. 5155)
- Disaster Recovery Reform Act (DRRA) of 2018
- 24 CFR Part 570 Community Development Block Grant
- 2 CFR 200 Uniform Administrative Requirements, Cost Principles, And Audit Requirements For Federal Awards
- Davis Bacon Act
- Section 3 of the Housing and Development Act 1968
CDBG-DR Insurance Requirements
Federal regulations require FEMA National Flood Insurance for all federally funded projects located within a Specific Flood Hazard Area-100 year floodplain. Insurance will be obtained before work begins and must be maintained at minimum throughout the remaining project and closeout.
Davis Bacon Act
All projects with 8 or more awarded units will be required to comply with Davis Bacon labor standards. Any infrastructure in support of housing will be required to comply regardless of the number of units.
Section 3 of the Housing and Development Act 1968
All projects receiving more than $200,000 in HUD assistance at a project site are required to comply with the “new” Section 3 rule, as detailed in 24 CFR Part 75. This includes the tracking of all labor hours on the project sites, including projects not subject to Davis Bacon, and qualitative efforts undertaken to demonstrate compliance. See DOLA’s Section 3 guidance webpage for more information.
2 CFR 200 Uniform Administrative Requirements
Uniform Guidance (2 C.F.R. Part 200): 2 C.F.R Part 200 establishes uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities.
Uniform Relocation Act & Section 104(d)
All projects are required to follow the Uniform Relocation Act (URA) and Section 104(d) as applicable to project activities when acquiring real property. Monitoring will include compliance with these acts and alternative requirements.
Robert T. Stafford Disaster Assistance and Emergency Relief Act
The Duplication of Benefits Policy was developed in accordance with Section 312 of the Robert T. Stafford Disaster Assistance and Emergency Relief Act (42 U.S.C. 5155) as well as HUD Federal Register Notices 84 FR 28836 & 28846.
- Section 312(a) of the Stafford Act requires the Federal Government to assure that no person receiving Federal financial assistance receives funds for any part of a loss already paid by insurance or any other source.
- Section 312(b) of the Act permits the payment of assistance to someone who is or may be entitled to future payments from insurance or another source “if such person agrees to repay all duplicative assistance to the agency providing the Federal assistance” (42 USC 5155(b)).
- Section 312(c) makes any person receiving duplicative assistance liable to the Federal Government for the duplicative amount and states that “the agency which provided the duplicative assistance shall collect [it] from the recipient when the head of such agency considers it to be in the best interest of the Federal Government” (42 USC 5155(c)).
Federal regulations require the program to consider all funds “available” to Applicants when calculating assistance, not just funds received. The Federal Register Notice states that funds are “available” to an Applicant if they:
(1) would have received them by acting in a reasonable manner, or in other words, by taking the same practical steps toward funding recovery as would disaster survivors faced with the same situation but not eligible to receive CDBG-DR assistance; or
(2) has received the assistance and has legal control over it. Available assistance includes reasonably anticipated assistance that has been awarded and accepted but has not yet been received. Applicants are expected to seek insurance or other assistance to which they are legally entitled and to behave reasonably when negotiating payments to which they may be entitled.
CDBG-DR Conflict of Interest
As stated Federal Register Vol. 87, No. 100 ( Tuesday, May 24, 2022), Federal regulations require that State grantees, in the direct Grant administration and means of carrying out eligible activities, be responsible with program administrative requirements, including those established in 24 C.F.R. §570.489(h) related to conflicts of interest.
Several federal conflict of interest laws can govern CDBG-DR assisted activities. Therefore, as another tool to prevent fraud, waste, abuse or mismanagement, DOLA has enacted the Code of Conduct Policy in conformity with the following applicable federal and state regulations:
- HUD conflict of interest regulations, 24 C.F.R. §570.611 and 24 C.F.R. §85.36;
- The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. §200 at §200.112 and §200.318 (c)(1)
The Code of Conduct Policy outlines DOLA’s responsibility, in its role as grantee, to identify, evaluate, disclose and manage apparent, potential or actual conflicts of interest related to CDBG-DR funded projects, activities and/or operations. This Policy is intended to serve as guidance for the identification of apparent, potential or actual conflicts of interest in all CDBG-DR assisted activities and/or operations. In accordance with 24 C.F.R. § 570.489, the Code of Conduct Policy also includes standards of conduct governing employees engaged in the award or administration of contracts.
As defined in the Code of Conduct Policy, a conflict of interest is a situation in which any person that may obtain a financial or personal interest or benefit that is or could be reasonably incompatible with the public interest, either for themselves, or with those whom they have business with. These persons include:
- a public servant, employee , consultant, officer, or elected official of DOLA or of any designated public agencies
- subrecipients that are receiving funds under the CDBG-DR Program
CDBG-DR Fraud, Waste, and Abuse
DOLA has zero tolerance for the commission or concealment of acts of fraud, waste, or abuse. Subrecipient, grantee and grant administrator staff will attend HUD Office of the Inspector General (OIG) fraud training when provided. Any instances of fraud, waste, or abuse should be reported to the HUD OIG at 1-800-347-3735 or hotline@hudoig.gov. All instances of fraud, waste, and abuse discovered by DOLA will be reported to HUD. Any actions to acquire property in anticipation of, or in receipt of, a federal CDBG-DR award may be subject to the Uniform Relocation Act and Section 104(d) of the Housing & Community Development Act.
The State of Colorado will make available to HUD detailed Fraud, Waste, and Abuse Policies and Procedures to demonstrate adequate procedures are in place to prevent fraud, waste, and abuse. If you suspect fraud, waste or abuse, please call the Colorado anti-fraud, waste and abuse hotline at (800) 222-4444.
Complaints regarding fraud, waste, or abuse of government funds should be forwarded to the HUD OIG Fraud Hotline (phone: 1–800– 347–3735 or email: hotline@hudoig.gov).