AUTHORITY: Implementing Sections 605-940 and 605-945, and authorized by Section 605-95, of the Civil Administrative Code of Illinois [20 ILCS 605/605-940, 605-945 and 605-95]. Authorized by Title I of the Housing and Community Development Act of 1974, as amended (42 USC 5301 et seq.).

SOURCE: Adopted and codified at 7 Ill. Reg. 2972, effective March 9, 1983; amended at 7 Ill. Reg. 7898, effective June 21, 1983; amended at 8 Ill. Reg. 16250, effective August 29, 1984; amended at 9 Ill. Reg. 7117, effective May 9, 1985; amended at 9 Ill. Reg. 10702, effective June 28, 1985; amended at 10 Ill. Reg. 10093, effective May 28, 1986; amended at 12 Ill. Reg. 2254, effective January 19, 1988; amended at 15 Ill. Reg. 4410, effective March 11, 1991; amended at 16 Ill. Reg. 20106, effective December 14, 1992; amended at 20 Ill. Reg. 7799, effective May 29, 1996; amended at 22 Ill. Reg. 1910, effective January 1, 1998; amended at 23 Ill. Reg. 8362, effective July 12, 1999; amended at 26 Ill. Reg. 11805, effective July 18, 2002; amended at 28 Ill. Reg. 13468, effective September 23, 2004; emergency amendment at 29 Ill. Reg. 4088, effective February 25, 2005, for a maximum of 150 days; amended at 29 Ill. Reg. 10017, effective June 28, 2005; amended at 38 Ill. Reg. 21323, effective October 30, 2014; recodified at 42 Ill. Reg. 14261; amended at 42 Ill. Reg. 19976, effective October 29, 2018.

SUBPART A: COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM

 

Section 110.10  Legislative Base

 

a)         Federal

 

1)         On July 31, 1981, Congress passed the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35).  This Act established seven block grant programs, including the State Community Development Block Grant (CDBG) Program.  These block grants replace a large number of programs previously administered by the federal government.  Although the Housing and Community Development Act of 1974 provided since its inception for discretionary block grants to smaller communities, the Omnibus Budget Reconciliation Act of 1981 made a fundamental change to transfer to the states the power and decision making in awarding block grants to small communities.

 

2)         The State Community Development Block Grant Program funds are allocated to the state pursuant to section 106(d) of Title I of the federal Housing and Community Development Act of 1974, as amended.  The Act authorizes state administration of the program to units of general local governments in nonentitlement areas.  Throughout this Part references are made to the provisions of 24 CFR 570.  These HUD regulations were published November 9, 1992.

 

3)         While the states must follow the statutory requirements concerning the use of block grant funds, the Secretary of HUD will give maximum feasible deference to a state's interpretation of these requirements consistent with the Secretary's obligation to enforce compliance with the intent of Congress.

 

4)         Pursuant to 24 CFR 91, the state must submit annually to HUD a Consolidated Plan that serves as the planning document of the state and an application under any of the Community Planning and Development formula grants, including CDBG.  The Consolidated Plan will include the application deadlines for the competitive funding components for the upcoming program year.  A final statement and certifications are required to be submitted before March 31 during each year in which a state elects to administer the CDBG funds for its nonentitlement areas.

 

b)         Illinois

 

1)         On August 10, 1981, the Governor designated the Illinois Department of Commerce and Community Affairs, now known as the Illinois Department of Commerce and Economic Opportunity, as the State administrative agency for the Small Cities Community Development Block Grant Program.  On March 23, 1982, the Governor officially notified the U.S. Department of Housing and Urban Development of the State's election to administer the Small Cities Program for nonentitlement communities within the State.

 

2)         As a part of its application, with respect to the CDBG Program, the State must submit an annual State of Illinois Consolidated Plan Action Plan to HUD outlining the one year use of funds and certifying that it:

 

A)        Engages or will engage in planning for community development activities;

 

B)        Provides or will provide technical assistance to units of general local government in connection with community development programs; and

 

C)        Through the public hearing requirement, has consulted with local elected officials and interested parties/citizens from among units of general local government located in nonentitlement areas of the State determining the method of distribution of CDBG funds.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.20  Purpose and Scope

 

The purpose of this Part is to develop State administrative rules for the administration of the Community Development Block Grant (CDBG) Program within the State of Illinois.  The promulgation of clear-cut program State administrative rules for the CDBG will ensure the maximum and efficient use of funds for community and economic development programs in the State's nonentitlement areas.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.30  Definitions

 

"Act" shall mean section 106(d) (42 USC 5306(d)) of the Housing and Community Development Act of 1974 (42 USC 5301), as amended by section 304 of Title III of the Omnibus Budget Reconciliation Act of 1981 (PL 97-35).

 

"Application" shall mean a request for program funds, including the required forms and attachments.

 

"Application on Behalf Of" shall mean any application submitted by one eligible applicant requesting funds for one or more other eligible applicants.

 

"Community" shall mean any eligible applicant.

 

"Community Development Block Grant Program" or "CDBG Program" shall mean the State Community Development Block Grant program administered by the Department, authorized by Title I of the Housing and Community Development Act of 1974, as amended (42 USC 5301).

 

"Department" or "DCEO" shall mean Illinois Department of Commerce and Economic Opportunity.

 

"Director" shall mean the Director of the Illinois Department of Commerce and Economic Opportunity.

 

"Economic Development" shall mean job creation/retention and the alleviation of economic distress through the stimulation of private investment and community revitalization.

 

"Eligible Applicant" shall mean any incorporated municipality, township or county within the State of Illinois, except those designated as entitlement areas by the U.S. Department of Housing and Urban Development.

 

"Entitlement City" shall mean a city designated by the Department of Housing and Urban Development to receive an amount of funds the city is entitled to receive under the CDBG entitlement program, as determined by the formula set forth in section 106 of the Housing and Community Development Act of 1974.

 

"Entitlement County" shall mean a county designated by the Department of Housing and Urban Development to receive an amount of funds which the county is entitled to receive under the CDBG entitlement program, as determined by formula set forth in section 106 of the Housing and Community Development Act of 1974 (see Public Law 93-383, as amended).

 

"HUD" shall mean the U.S. Department of Housing and Urban Development.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.35  Incorporation by Reference

 

Any incorporation by reference in this Part of the state administrative rules or federal regulations of any agency of the United States or the standards of a nationally recognized organization or association includes no new amendments or additions made after the date specified.

 

(Source:  Amended at 29 Ill. Reg. 10017, effective June 28, 2005)

 

Section 110.40  Federal/State Program Objectives

 

a)         In order to ensure that the State administered program complies with the Housing and Community Development Act of 1974, as amended, a CDBG assisted activity must meet one or more of the following national objectives:

 

1)         Benefiting low and moderate-income persons;

 

2)         Aiding in the prevention or elimination of slums and/or blight; or

 

3)         Meeting other community development needs that pose a serious and immediate threat to the health and welfare of the community that are of recent origin or recently became urgent, generally within the previous 18 months.

 

b)         National Objectives

 

1)         To complement these federally mandated national objectives, the State has established the following specific objectives for the CDBG Program:

 

A)        Strengthening community economic development through the creation of jobs, stimulation of private investment, and strengthening of the tax base;

 

B)        Alleviation of economic distress and realizing community economic development opportunities of benefit for low- and moderate-income individuals;

 

C)        Improvement of public infrastructure and elimination of conditions that are detrimental to health, safety, and public welfare;

 

D)        Conservation and expansion of the State's housing stock in order to provide a decent home and a suitable living environment for persons of low- and moderate-income and persons with disabilities.

 

2)         There are several criteria by which an activity can meet a national objective. Units of general local government should consult the Illinois Community Development Block Grant (CDBG) Grants Management Handbook that explains the three national objectives in detail, including the criteria for meeting each one, and the documentation that must be provided to comply with the HUD requirements.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.50  Eligible Applicants

 

a)         Only units of local government may apply for funding.  Eligible municipalities shall not receive funding from HUD as an entitlement city.  Counties and townships that are not participating in the HUD Urban County Entitlement Program are also eligible to apply for block grant funds.

 

b)         Because of eligibility requirements and administrative capacity, certain unincorporated areas and special districts may not qualify for participation by themselves.  In these instances, general purpose units of local government will be allowed to submit applications on behalf of otherwise ineligible special districts and unincorporated areas provided the unit of general local government determines that the activity is meeting its needs in accordance with section 106(d)(2)(D) of the Housing and Community Development Act of 1974, as amended.

 

c)         When 2 or more eligible local governments face a common problem, a joint application may be submitted under the following conditions:

 

1)         The solution of the problem requires mutual action and is not intended for administrative convenience; and

 

2)         The eligible local governments involved have contacted the Department for prior approval of submission of the joint application before actual application submission.

 

d)         An Application on Behalf Of or a joint application may not be filed for an entitlement city or a city located in an entitlement county.

 

e)         If an Application on Behalf Of or a joint application will be filed, the local governments involved must submit an executed cooperation agreement with the application for funds. The agreement shall define grantee responsibilities under a successful application.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.60  Eligible/Ineligible Projects and Activities for CDBG Components

 

a)         Eligible Projects and Activities

Eligible activities are detailed in 24 CFR 570.482 (2004).  Listed in this subsection (a) below are program components that describe eligible projects and activities that may be funded through CDBG:

 

1)         General Economic Development Component.  Provision of financial assistance to private for-profit or not-for-profit businesses for such activities as land acquisition; public facilities and improvements in support of economic development (such as, water, sewer and utility lines); acquisition, construction and rehabilitation of commercial and industrial buildings/facilities; machinery and equipment; furnishings and fixtures; and working capital expenses.

 

2)         Competitive Public Infrastructure Program Component.  Provision of financial assistance for acquisition, construction, reconstruction, rehabilitation or installation of public facilities, and improvements (e.g., water and sewer facilities, including storm sewers, flood retention and drainage facilities).

 

3)         Competitive Housing Rehabilitation Program Component.  Provision of financial assistance in support of low- to moderate-income housing, including rehabilitation, clearance, demolition, and/or removal of privately-owned buildings and provision of site improvements such as connection of residential structures to water or sewer lines; certain types of housing modernization; temporary relocation assistance; code enforcement; and lead-based paint abatement.

                       

4)         Disaster Response Component.  Provision of financial assistance includes acquisition, demolition, construction, reconstruction, rehabilitation or installation of public facilities, and improvements (e.g., water and sewer facilities, including storm sewers, flood retention and drainage facilities), and housing rehabilitation in areas affected by a Governor-declared disaster.

 

b)         Activity Delivery

With respect to subsection (a), activity delivery costs are allowable costs for designated programs and eligible activities under the CDBG Program.  Eligible costs are necessary to complete the local management process of a CDBG grant. This includes, but is not limited to, such costs as salaries, travel costs, services performed under third party contracts, including legal and audit services, environmental review, additional fidelity bonding costs, or other services required for the delivery of grant activities. Eligible costs exclude all pre-program costs, such as payment or reimbursement of application preparation fees, costs associated with conducting a local survey, etc.

 

c)         Ineligible Projects and Activities

 

1)         Generally, any type of activity not described or referred to in subsection(a) is considered ineligible.

 

2)         The following is a selective list of examples of projects and activities that are generally ineligible:  buildings used predominantly for the general conduct of government (e.g., city halls, courthouses, jails, police stations, etc.).  However, if the Department of Natural Resources requires historic preservation renovations to a project, those renovations will be deemed eligible expenses. The following are generally ineligible: general government expenses; political activities; purchase of construction equipment; and purchase of equipment, fixtures, motor vehicles, furnishings, or other personal property not an integral structural fixture.  However, CDBG funds may be used to purchase or to pay depreciation or use allowances for otherwise ineligible items when necessary, if the administration of activities was assisted with CDBG funds.  The costs associated with operating and maintaining public facilities and services are generally ineligible.  New housing construction is ineligible, except as provided under the last resort housing provision set forth in 49 CFR 24 (2004) or when that construction is carried out by a subgrantee pursuant to 24 CFR 570.204(a)(2) (2004); also ineligible are income payments for housing or any other purpose (e.g., income maintenance, housing allowances, down payments, mortgage subsidies, etc.).  All activities as listed in 24 CFR 570.482 (2004) and section 105(a) of the Act are eligible.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.70  Grant Application Process

 

a)         Upon request, the Department will supply local governments with an application package.  Eligible applicants shall complete and submit the application in accordance with the instructions and the application schedule, which is annually established by the Department.  Costs incurred in preparing the applications are not reimbursable.

 

b)         Pursuant to 24 CFR 570.486(5), eligible applicants must conduct two public hearings, each at a different stage of the project to obtain citizen views.

 

1)         A minimum of one public meeting must be held prior to the submission of any application to the Department.  This meeting, and its specific time, location, and topics must be published at least seven days in advance in the non-legal section of a newspaper that is in general circulation within the community.  Subsequent to the meetings, a resolution of support from the local governing body must be passed that authorizes the local government to apply for funds.  If an eligible applicant plans to utilize grant funds as a financial assistance mechanism, discussions should be held at the public meeting to determine the planned uses of the recaptured funds.

 

2)         Should an eligible applicant be awarded a grant, the applicant must provide documentation/evidence (i.e., newspaper clipping of notice hearing and a summary of comments presented at hearing) that one public hearing was conducted to review program performance under that grant.

 

c)         Eligible applicants must submit a plan for minimizing displacement pursuant to section 104(d) of the Housing and Community Development Act of 1974, as amended, only if the project will result in the displacement or relocation of residents.

 

(Source:  Amended at 29 Ill. Reg. 10017, effective June 28, 2005)

 

Section 110.80  Funding

 

a)         Distribution of Funds

Grant awards will be made according to the application evaluation processes described in Sections 110.91, 110.92, 110.93, 110.94, 110.95, 110.101, 110.102, 110.103 and 110.106.

 

b)         Funding Considerations

 

1)         Grant Ceilings. Grant ceilings for the various components listed in Section 110.60 establish the maximum grant award limits that an eligible applicant may request.  Needs expressed by interested citizens and local elected officials (see Section 110.10(b)(2)(C)), the amount of annual allocation, and a review of past program component usage shall be factors in the Department's determination of the grant ceiling on an annual basis.

 

A)        Eligible applicants may only submit one application and may only receive one grant in any one program year under competitive program components: Public Infrastructure and Housing Rehabilitation.

 

B)        On occasion, the Department will review the technical feasibility of a project.  If the review requires non-Departmental expertise (e.g., water and sewer permits), the Department will coordinate with other agencies (e.g., Environmental Protection Agency (EPA), Department of Public Health (DPH), USDA Rural Development) to review the technical feasibility of the project.

 

C)        In determining the appropriate grant award amount, the Department shall consider the following:

 

i)          Project Need:  Project need shall be determined using standards found in Sections 110.90(b)(3); 110.91(b)(3)(A), (C), (D) and (E); 110.92(b)(3); 110.93(b)(3); 110.94(b)(3); 110.95; 110.101(b); 110.102; and 110.103(b), as applicable.

 

ii)         Ability to Carry Out the Project:  Determination of the ability to successfully complete the proposed project shall be based upon elements such as previous program performance, experience, and scope of the proposed program.

 

iii)        Proposed Activities:  A review of the proposed activities shall be based on a determination of whether the program objectives will be met through the proposed activities as set out in Sections 110.90, 110.91, 110.92, 110.93, 110.94 and 110.95.

 

D)        The Department may withdraw, suspend or terminate grant funding based on the following:

 

i)          If the Department approves an application but, prior to the execution of a Grant Agreement, it learns or has a reasonable belief that the project will not progress or is unlikely to be completed as originally anticipated, due to unforeseen facts and circumstances not previously known during or subsequent to the application process, it may withdraw its commitment of funds.  If the Department withdraws its commitment of funds, it shall provide written notification to the applicant advising it of the withdrawal and setting forth the reasons for the withdrawal.

 

ii)         If the Department approves an application and a Grant Agreement has been executed, the Department may only suspend or terminate the Grant Agreement in accordance with the terms and conditions set forth in the Grant Agreement or the conditions described in 47 Ill. Adm. Code 1.110.

 

2)         Standards for Program Category Allocation

The Department shall determine the amount of funds annually allocated to carry out activities in accordance with each of the community development assistance program components.  Needs expressed by interested citizens and local elected officials pursuant to Section 110.10(b)(2)(C), the amount of annual allocation, and a review of past program component usage shall be factors in determining the amount of funds annually allocated to carry out activities.  The allocation of funds between program components shall be determined from the following allocation ranges:

 

A)        Disaster Response:  1% through 20%

 

B)        Competitive Housing Rehabilitation Program Component:  15% through 70%

 

C)        Competitive Public Infrastructure Component:  40% through 60%

 

D)        General Economic Development Component:  10% through 40%

           

E)        Set-Aside for Lead-Based Paint Abatement:  up to 5%

           

3)         Environmental Reviews

Upon actual grant award, for non-economic development projects, and during or after application review of economic development projects, a technical environmental record review of project activities must be completed by the awarded community under 24 CFR 58 (1996).  HUD has published Environmental Review Procedures for the Community Development Block Grant (24 CFR 58).

 

4)         On-Site Visits

The Department's program staff may, contingent upon program resources or the need for on-site inspection, verify eligibility, conduct field visits of potential grantees under the Competitive Public Infrastructure Program and Competitive Housing Rehabilitation Program Components prior to final grant decisions.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.90   Set-Aside for Disaster Response Component

 

Certain types of conditions, such as natural disasters or other unique circumstances, e.g., loss of infrastructure due to construction, environmental incidents such as oil spills, ruptured public utility lines, etc., do not lend themselves well to a designated (yearly or quarterly) application cycle.  In response to CPD Notice 17-06, this as-needed program is designed for communities affected by an unforeseen event resulting in a State Disaster Declaration by the Governor of the State of Illinois on an "as needed" basis.  There is no application deadline for this set-aside.  If no situations arise that warrant this type of assistance, the set-aside funds will be reallocated at the end of the program year.

 

a)         Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

 

1)         A national objective (as defined in Section 110.40) must be met by the project.

 

2)         At minimum, 25% of project costs will be paid from other non-Department funds. Examples of other funding sources may include USDA Rural Development, EPA or local funds.  The grantee may request, in writing, that the 25% minimum leverage requirement be waived.  This request must include a reasonable justification.  The Department shall review each request on a case-by-case basis.

 

3)         A serious and urgent threat to the health and safety of community residents exists, i.e., a serious deficiency exists and problems clearly attributable to the deficiency have occurred from an unforeseen event resulting in a State Disaster Declaration by the Governor of the State of Illinois.

           

4)         A financial need for grant assistance in order to address the identified problem.

 

b)         Application Review and Approval

 

1)         Funds will be made available on an as needed basis through a noncompetitive process until all funds are obligated.

 

2)         Applications shall be prepared and submitted to the Department as specified in Section 110.70.

 

3)         Applications shall be reviewed in accordance with Section 110.103.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.91  General Economic Development Component

 

The general economic development component is available to assist communities to attract or expand private businesses.  The program provides financial assistance in the form of a grant to private businesses that create or retain jobs primarily for low- to moderate-income workers.  Public infrastructure grants may also be made to support a private business that creates or retains jobs primarily for low- to moderate-income workers.  This assistance can benefit both private "for-profit" and "not-for-profit" organizations.  Funds will be made available on an as needed basis on a noncompetitive process until all funds are obligated.

 

a)         Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

 

1)         At minimum, 51% of those benefiting from the project will be low- to moderate-income persons (as defined in Section 110.30).

 

A)        The benefit of job creation shall be documented in either one of two ways:

 

i)          Obtaining and keeping on file for verification the Family Income Verification Form that includes an employee's social security number, signature and family income; or

 

ii)         Accepting employment referrals from the Illinois Employment and Training Center.

 

B)        The benefit of the job retention of existing employees shall be documented by completing a Family Income Verification Form for each employee. These forms must be submitted at the time of application.

 

2)         The financial feasibility of the project and how program objectives will be met through proposed activities.  Participating businesses must submit supporting financial data.

 

3)         If a start-up project is proposed, a 20% commitment of equity included in the leveraging, unless waived by the Director for good cause shown.  Good cause may include, but is not limited to, cases in which CDBG funds are used for the construction or rehabilitation of public infrastructure, when the equity requirement would work an unreasonable hardship upon the applicant, when the loan is sought by a minority enterprise, when other conditions of the financial assistance are so firmly supported that the equity requirement is not necessary, or when the need for job creation in the geographical area far exceeds the relative security offered by the 20% equity requirement.

 

4)         For public infrastructure projects in support of economic development, when the improvements are to take place in an area that is residential in character, that the area is comprised of at least 51% low- to moderate-income persons.

 

b)         Application Review and Approval

 

1)         Funds will be made available on an as needed basis throughout the year.

 

2)         Applications shall be prepared and submitted to the Department as specified in Section 110.70.  Complete applications shall be reviewed and evaluated by Department staff.  Applicants shall be notified of deficiencies and given the opportunity to correct the deficiencies through submission of additional documentation.

 

3)         The evaluation of projects shall be conducted to assure compliance with 24 CFR 570.203 (2004) and shall also address the following criteria:

 

A)        Project Need – Need for and use of program funds should be detailed.

 

B)        Project Readiness – The applicant must demonstrate project readiness through a description of all activities.  This shall include commitment from all lenders and investors, signed and dated.

 

C)        Financial Evaluation – The company's financial statements for the past three years and two projected statements of financial condition shall be reviewed to determine:  liquidity/debt coverage; ability of the company to manage debt; business trends; and projected earnings.  This data shall be compared to similar data for companies in the same industry using the "RMA Annual Statement Studies" published by Risk Management Association, One Liberty Plaza, 1650 Market, Suite 2300, Philadelphia PA 19103 (1999-2000), or a comparable source if that industry is not evaluated by this source.  Financial statements are not required for public facilities in support of economic development.

 

D)        Commitment for Job Creation/Retention – Firm written assurances from the company must identify the number of jobs created/retained in a specified period of time and the specific number that shall be low- to moderate-income and the methodology to be used to document low- to moderate-income benefit.  This review shall also include a determination of the numbers of jobs created/retained in relation to the amount of program funds.  The investment per job shall not exceed $10,000 per job for any job that is retained and $25,000 per job for any job that is created.

 

E)        Resource Leveraging – The ratio of other (non-Department) funds to total CDBG funds being invested in the project will be considered.  The evaluation threshold is a 2:1 ratio.  The CDBG investment shall not exceed a 1:1 ratio.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.92  Competitive Public Infrastructure

 

The competitive public infrastructure component is designed to fund public infrastructure projects that propose to alleviate a serious threat to public health and safety.  Applicants must demonstrate that a serious deficiency exists with an emphasis upon helping persons of low- to moderate-income.  Applications are due on an annual basis.

 

a)         Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

 

1)         At minimum, 51% of those benefiting from the project will be low to moderate-income persons (as defined in Section 110.30)

           

2)         A serious and urgent threat to the health and safety of community residents exists, i.e., a serious deficiency exists in a community public facility (or that the community lacks the facility entirely), and problems clearly attributable to the deficiency have occurred, such as serious illness, disease outbreak, or serious environmental pollution.

 

3)         The project is ready to proceed and expend funds and the project addresses the identified problem.

 

b)         Application Review and Approval

 

1)         Applications will be accepted once a year on a due date established at the beginning of the program year pursuant to Section 110.10(a)(4).

 

2)         Applications will be prepared and submitted to the Department as specified in Section 110.70.

 

3)         Applications will be reviewed in accordance with Section 110.103.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.93  Competitive Housing Rehabilitation Component

 

The competitive housing rehabilitation component targets projects proposing to rehabilitate existing housing stock.  The purpose is to provide decent, safe and sanitary housing in conformity with local housing codes for low- to moderate-income persons.

 

a)         Project Eligibility Criteria:  For a project to be eligible for funding under this component, applicants must document the following:

 

1)         Program funds used in the rehabilitation of a residence will benefit 100% low- to moderate-income persons.

           

2)         That a project plan is presented that documents selection of the area targeted for assistance.

 

3)         The project is ready to proceed and expend funds and the project addresses the identified problem.

 

b)         Application Review and Approval

 

1)         Applications will be accepted once a year on a due date established at the beginning of the program year, pursuant to Section 110.10(a)(4).

 

2)         Applications will be prepared and submitted to the Department as specified in Section 110.70.

 

3)         Applications will be reviewed in accordance with Section 110.104.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.94  Competitive Planning Assistance Component (Repealed)

                                                                                                           

(Source:  Repealed at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.95  Non-Competitive and Accessibility Rehabilitation Services Component (Repealed)

 

(Source:  Repealed at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.100  Application Evaluation for Competitive Public Facilities and Competitive Housing Rehabilitation Components (Repealed)

 

(Source:  Repealed at 20 Ill. Reg. 7799, effective May 29, 1996)

 

Section 110.101  Application Evaluation for Competitive Planning Assistance Component (Repealed)

 

(Source:  Repealed at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.102  Pre-Application Determination and Application Evaluation for Non-Competitive Mobility and Accessibility Rehabilitation Services (Repealed)

                                   

(Source:  Repealed at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.103  Application Evaluation for Competitive Public Infrastructure Component

 

a)         Explanation of Application Ranking System

 

1)         Applicants will compete in a formalized ranking system. Applications will undergo a multi-person review to determine eligibility in 3 areas:  Benefit to Low- and Moderate-Income Persons, Documentation of Threat to Health and Safety, and Evidence of Project Readiness.  Upon meeting the minimum eligibility thresholds, applications will compete in a formalized ranking system.

 

2)         Applications will be ranked according to the criteria established in the Department's annual Action Plan approved by HUD. The Action Plan is annually provided for public comment for a period of 30 days.  The Department will review applications for ranking and project selection according to the criteria described in this Section.  The Department will then select projects for funding out of the top-ranking projects, as determined under subsection (b)(2), until all available funds are expended.

 

b)         Criteria for Selection of Projects

 

1)         The analysis will evaluate project need, according to its impact on program benefit and benefit to low- to moderate-income persons utilizing the ranking system contained in subsection (d).

 

2)         Comparative Assessment of Applications

 

A)        The Department will screen and identify top ranking CDBG applications.  Projects will be ranked in categories of maximum, moderate, minimum or no rating as described in subsection (d). Maximum ratings do not guarantee that a project will receive funding.  The Department will then conduct intensive evaluations, leading to the CDBG grant award decision. Department staff may conduct field visits and will analyze project characteristics, including:

 

i)          a comparative assessment of projects – e.g., low- to moderate-income benefits, local contribution, etc.;

 

ii)         a verification of submitted application information;

 

iii)        a thorough analysis of the project's readiness to proceed; and

 

iv)        a determination of the applicant's previous efforts to address its problems.

 

B)        Actual funding levels will relate closely to the competitiveness of the proposed projects.  Applications will be comparatively ranked according to the criteria described in this subsection (b) to determine the final funding levels.  The Department reserves the right to negotiate the final funding figures.

 

c)         Eligibility Thresholds

 

1)         Benefit to Low- and Moderate-Income Persons:  Applications must document that the project will benefit at least 51% low- to moderate-income persons and that, as applicable, no special assessments will be levied against residential structures owned and occupied by low- and moderate-income persons and that provisions are made to hook up these residences to water and sewer systems.  Applications that do not document benefit to low- to moderate-income persons will not be considered further.

 

2)         Documentation of Threat to Health and Safety:  Applications must include documentation verifying that the project addresses a threat to health and safety.  Applications that do not document threat to health and safety will not be considered further.

 

3)         Evidence of Project Readiness:  Applications must demonstrate that the project is appropriate and achievable and that all actions have been completed to ensure timely implementation of the project.  Applications that do not document project readiness will not be considered further.

           

d)         Ranking Criteria

 

1)         Community Need:  This criterion is an objective measure designed to give some priority to applicants with the highest level of need.  Need may be evaluated based on one or more of the following criteria:

 

A)        Estimates of average unemployment in Illinois, by county or municipality, if available, based upon Illinois Department of Employment Security data.

 

B)        Percentage of people in poverty according to United States Census Bureau data.

 

C)        Percentage of low/moderate income residents according to the Department of Housing and Urban Development Low/Moderate Income Summary Data.

 

D)        Community's water or sewer rates in comparison to the community's median household income, according to United States Census Bureau data.

 

2)         Urgency of Need

 

A)        An application shall receive a maximum rating if it has fully:

 

i)          documented that a serious deficiency exists in a community's public facility or that the community lacks the facility entirely;

 

ii)         identified problems clearly attributable to the deficiency have occurred, such as serious illness, disease outbreak, or serious environmental pollution; and

 

iii)        identified that the problem is existing, continual and chronic as opposed to occasional, sporadic or probable.

 

B)        An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

 

C)        An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

 

D)        An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(2)(A).

                                                                                                                       

3)         Benefit to Low- and Moderate-Income Persons

 

A)        A maximum rating shall be received if 71-100% of the persons benefiting are low- to moderate-income.

 

B)        A moderate rating shall be received if 61-70% of persons benefiting are low- to moderate-income.

 

C)        A minimum rating shall be received if 51-60% of persons benefiting are low- to moderate-income.

 

4)         Project Readiness.  This criterion is a measure of the project's readiness to proceed immediately upon notice of grant award.  Ratings of moderate, minimum, and no rating will be assigned accordingly to projects lacking any or all of the items listed in subsections (d)(5)(A) through (H).  In order to receive a maximum rating, applicants must address a majority of the following issues, as applicable to their project:

 

A)        Site Control.  If land is required for the proposed project (i.e., lagoon or tower site, etc.), the applicant must already own the site and provide evidence of ownership;

 

B)        Leverage Financing.  The applicant must demonstrate that all leverage funding for the project has not only been committed but will be available immediately upon grant award, including:

 

i)          United States Department of Agriculture Rural Development Form 1940-1 has been issued to the applicant; and

 

ii)         All issues have been resolved with the Illinois Environmental Protection Agency (i.e., facilities planning, dedicated revenue source, etc.) and the project is ready to bid;

 

C)        Final design engineering of the proposed project has been completed;

 

D)        Illinois Environmental Protection Agency has issued a construction permit;

 

E)        Timely completion of previous CDBG grants (not applicable if the grantee has not previously received CDBG funding);

 

F)         100% or more of necessary easements have been obtained;

 

G)        Executed agreement in place for purchase of water or treatment of wastewater; and

 

H)        Evidence of completion of all previous phases, if the proposed project is part of a multi-phase project.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.104  Application Evaluation for Competitive Housing Rehabilitation Component

 

a)         Explanation of Application Ranking System

 

1)         Applicants will compete in a formalized ranking system.  Applications will undergo an initial review to determine eligibility in 2 areas:  Benefit to Low- and Moderate-Income Persons and Leverage Funds.  Upon meeting the minimum eligibility thresholds, applications will compete in a formalized ranking system.

 

2)         Applications will be ranked in 4 areas:  Project Need, Project Impact, Evidence of Coordination of Resources, and Project Readiness.  The Department will then select projects for funding out of the top-ranking projects as determined under subsection (b)(2) until all available funds are expended.

 

b)         Criteria for Selection of Projects

 

1)         The analysis will evaluate project need, according to its impact on program benefit and benefit to low- to moderate-income persons utilizing the ranking system contained in subsection (d).

 

2)         Comparative Assessment of Applications

 

A)        The Department will screen and identify top ranking CDBG applications.  Projects will be ranked in categories of maximum, moderate, minimum or no rating as described in subsection (d). Maximum ratings do not guarantee that a project will receive funding.  The Department will then conduct intensive evaluations, leading to the CDBG grant award decisions.  Department staff may conduct field visits and will analyze project characteristics, including:

 

i)          A comparative assessment of projects – e.g., project impact, local contribution, community need, etc.;

 

ii)         A verification of submitted application information;

 

iii)        A thorough analysis of the project's readiness to proceed; and

 

iv)        A determination of the applicant's previous efforts to address its problems.

 

B)        Actual funding levels will relate closely to the competitiveness of the proposed projects.  Applications will be comparatively ranked according to the criteria described in this subsection (b) to determine the final funding levels.  The Department reserves the right to negotiate the final funding figures.

 

c)         Eligibility Thresholds

 

1)         Benefit to Low- and Moderate-Income Persons:  Applications must document that the project will benefit 100% low- to moderate-income persons.  Applications which do not document benefit to low- to moderate-income persons will not be considered further.

 

2)         Leverage Funds:  Applications must provide evidence that at least 20% of non-administrative housing rehabilitation costs will be provided from non-CDBG sources, except accessibility projects, which will not be required to provide leverage.

 

d)         Ranking Criteria

 

1)         Project Need

 

A)        An application shall receive a maximum rating if it has fully:

 

i)          Demonstrated that the extent of housing deficiencies is widespread and serious and the percentage of substandard units occupied by low- to moderate-income persons is high relative to the total number of households in the area;

 

ii)         Identified specific local conditions that have contributed or are contributing to the deterioration or lack of affordable housing;

 

iii)        Described previous efforts to address housing problems that have not resolved the housing deficiencies, including a description of why the efforts failed to solve the problem.

 

B)        An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(1)(A).

 

C)        An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(1)(A).

 

D)        An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(1)(A).

 

2)         Project Impact

 

A)        An application shall receive a maximum rating if it has fully:

 

i)          Demonstrated that a substantial number of the housing units in need of rehabilitation in the identified project area will be repaired;

 

ii)         Demonstrated that the proposed housing rehabilitation project addresses the identified needs and deficiencies and moves to resolve the problems; and

 

iii)        Outlined how the targeted need or area is clearly distinguished from the overall housing needs in the community.

 

B)        An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

 

C)        An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(2)(A).

 

D)        An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(2)(A).

 

3)         Evidence of Coordination of Resources

 

A)        An application shall receive a maximum rating if it has fully:

 

i)          Explained the use of all available resources including a description of local efforts to revitalize the area to achieve maximum impact upon the targeted need or area;

 

ii)         Described the extent to which the proposed project represents the most effective option for achieving maximum impact; and

 

iii)        Provided evidence that the applicant has coordinated activities with a local social service provider regarding the identification of eligible households and housing units in need of rehabilitation to meet accessibility standards.

 

B)        An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(3)(A).

 

C)        An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(3)(A).

 

D)        An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(3)(A).

 

4)         Project Readiness

 

A)        An application shall receive a maximum rating if it has fully:

 

i)          Developed a preliminary list of qualified general contractors which have expressed an interest in, and are available to perform, the proposed rehabilitation activities;

 

ii)         Demonstrated substantial homeowner interest in both loan and/or grant portions of the identified project;

 

iii)        Documented that operational procedures and administrative structure have been established at the local level;

 

iv)        Documented that qualifications of, and procedures for selection of, housing inspectors have been established;

 

v)         Identified the specific types of, and priorities given to, work to be performed, including cost estimates;

 

vi)        Established clear and measurable rehabilitation standards and proposed a reasonable implementation schedule;

 

vii)       Included a description of the local application process that identified how the targeted population will be notified and encouraged to apply; and

 

viii)      Developed preliminary financing plans, such as a commitment of leverage funds and a financing structure that considers residents' incomes.

 

B)        An application shall receive a moderate rating if the project only "moderately" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(4)(A).

 

C)        An application shall receive a minimum rating if the project only "minimally" addresses the criteria or does not fully meet any one of the criteria in subsection (d)(4)(A).

 

D)        An application shall receive a "no rating" if it fails to fully meet the standards in subsection (d)(4)(A).

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.105  Small Business Financing Component (Repealed)

 

(Source:  Repealed at 20 Ill. Reg. 7799, effective May 29, 1996)

 

Section 110.106  Demonstration Program:  Emergency Lead-Based Paint Abatement

 

In order to respond to lead-based paint poisoning problems, funds will be made available on an "as needed" basis.  There is no application deadline.  Awards will be made to communities that are faced with an immediate threat to health and safety to children 6 and under exposed to lead-based paint.  If no situations arise that warrant this type of assistance, the set-aside funds will be reallocated at the end of the program year.

 

a)         Project Eligibility Criteria – For a project to be eligible for funding under this component, applicants must document the following:

 

1)         100 percent of those benefiting from the project will be low-to-moderate income persons (as defined in Section 110.30);

 

2)         100 percent of project costs may be paid from CDBG funds unless the project involves rental property owned by a non-low-to-moderate income person.  If the rental property is occupied by a low-to-moderate income family, but is owned by a non-low-to-moderate income person, then the rental property owner must contribute at least 50 percent of the costs of the actual lead-based paint abatement;

 

3)         One or more income eligible families living in the community have children 6 or under who have lead poisoning or are in imminent danger of lead poisoning;

 

4)         The project is ready to proceed and expend funds; and

 

5)         A community action agency determined by the Department to have the capacity to undertake lead-based paint abatement will be used to manage the project.

 

b)         Application Review and Approval

 

1)         Applicants for this program must be referred to the Department by DPH based on a finding by DPH or the local health department, if applicable, that children age 6 or under who live within the jurisdiction of the applicant have been diagnosed as having lead poisoning or are in imminent of lead poisoning.

 

2)         Funds will be made available on an as needed basis through a non-competitive process until all funds are obligated.

 

3)         Applications shall be prepared and submitted to the Department as specified in Section 110.70.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.110  Administrative Requirements

 

The administrative requirements detailed in this Section, as well as those enumerated in 47 Ill. Adm. Code 1, are applicable to any grant awarded with respect to this Part.

 

a)         Compensation:  The method of compensation shall be in accordance with the applicable State laws relative to that compensation by which the Department is governed.  Payments to the grantee are subject to the receipt of electronic requests for fund transfers or expenditure summaries.  The first payment for program initiation may be an advance and should be the amount necessary to meet the first month's non-administrative cost needs.  Thereafter, the payments are dual purpose in that they will be sufficient to cover the non-administrative expenditures to date, as well as the cash needs of the grantee for the next 30 days.  Administrative costs may be drawn in the same manner, or the grantee may draw down administrative needs in equal, quarterly increments.  Each request shall be certified to the effect that the grantee has performed in conformance with the Grant Agreement and that it is entitled to receive the amount requisitioned.

 

b)         Reporting:  An electronic reporting system or an Expenditure Summary and Payment Request form shall be submitted to the Department to request cash.

 

c)         Procurement:  Units of General Local Government (UGLG) may use their own procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurement conforms to federal procurement regulations (2 CFR 200). In addition, Illinois statutes must also be considered when establishing procurement procedures. Statutes that may apply can be found at:

 

http://www.ilga.gov/legislation/ilcs/ilcs.asp in:

Chapter 50 – Local Government

Chapter 55 – Counties

Chapter 60 – Townships

Chapter 65 – Municipalities

 

Units of General Local Government should follow the stricter regulation, whether federal, State or local government, and consult the Illinois Community Development Block Grant (CDBG) Grants Management Handbook for specific steps and requirements in the process.

           

d)         Records:  CDBG records shall be maintained in accordance with 24 CFR 85, the Illinois Local Records Act [50 ILCS 205], and 24 CFR 570.490 (2004) and are subject to the Freedom of Information Act [5 ILCS 140].

 

e)         Financial Management

 

1)         Grantees shall comply with financial management procedures provided in OMB Circular A-87, "Cost Principles for State and Local Governments", published May 4, 1995, and standards promulgated by the American Institute of Certified Public Accountants (AICPA), Harborside Financial Center, 201 Plaza 3, Jersey City NJ 07311, June 2003, no later editions are incorporated.

 

2)         Audits shall be conducted in accordance with the Comptroller General's Standards for Audits of Governmental Organizations, Programs, Activities, or Functions, and the General Accounting Office's Guidelines for Financial and Compliance Audits of Federally Assisted Programs available from U.S. Comptroller General Standards, U.S. General Accounting Office, 441 G Street NW, Washington DC 20548.

 

f)         Bonding and Insurance:

 

1)         Bonding:

 

A)        Grantees:  Grantees shall obtain a fidelity bond for each employee or official with access to project assets, accounting records, or checks.  The bond (position or blanket) shall be in an amount at least to cover all CDBG funds contained in all bank accounts.  The person with signature authority for the CDBG accounts must be bonded for this amount and his or her signature must appear on every check.  The total bonding for each employee cannot be counted as a cumulative total.  The cost of the fidelity bonds is a CDBG eligible administrative expense.

 

B)        Grant Administrators:  If the grant administrator processes payments on behalf of the grantee, the grant administrator shall obtain a fidelity bond for each employee with access to project assets, accounting records, or checks.  The bond (position or blanket) shall be in the minimum amount of $750,000.  At least one of the persons with signature authority for the CDBG accounts must be bonded for this amount and his or her signature must appear on every check.  The cost of the fidelity bonds is a CDBG eligible administrative expense.

 

2)         Flood Insurance:  Grantees shall comply with the flood insurance purchase requirements of section 102(e) of the Flood Disaster Protection Act of 1973 (42 USC 4001).

 

g)         Expenditure of Project Funds:  No project costs may be incurred prior to authorization, and release of funds will not occur without a fully executed grant agreement.  Costs may be incurred as follows:

 

1)         CDBG administrative costs may be incurred as of the date of the grant award letter;

 

2)         Non-CDBG project costs (leverage funds) and CDBG-funded design engineering costs may be incurred only after receiving a grant award letter and meeting environmental review requirements; and

 

3)         CDBG-funded projects costs may be incurred only after meeting environmental review requirements and all specific grant conditions have been met.

 

h)         Grant Agreement:  When a grant has been awarded, the grantee and the Department shall enter into a Grant Agreement.  The Grant Agreement shall be executed between the grantee and the Director of the Department or the Director's designee on behalf of the Department.  The Grant Agreement shall contain substantive provisions, including, but not limited to the following:

 

1)         A recitation of legal authority pursuant to which the Grant Agreement is made;

 

2)         An identification of the scope of work that identified the work or services to be performed or conducted by the grantee;

 

3)         An identification of the grant amount/funds;

 

4)         The conditions and manner in which the Department shall disburse the grant funds subject, at all times, to annual funding from the federal government;

 

5)         The grantee's irrevocable promise to satisfy the leverage requirement, if required;

 

6)         The grantee agrees not to assign or transfer any of its rights, duties or obligations without the written consent of the Department;

 

7)         The grantee's promise not to amend the scope of work or the budget without the Department's written consent.  Failure to do so would result in a cost disallowance.  The scope of work must be completed by the end date stated in the grant agreement unless a written request for an extension of time is submitted, at least, 30 days before the end date;

 

8)         The grantee agrees that it shall expend the grant funds and any accrued interest, if allowed to retain accrued interest, only for the purposes specified in the scope of work; and

 

9)         The grantee agrees that it shall refrain from entering into any written or oral agreement or understanding with any party that might be construed as an obligation of the State of Illinois or the Department for the payment of any funds.

 

(Source:  Amended at 42 Ill. Reg. 19976, effective October 29, 2018)

 

Section 110.120  Non-discrimination

 

a)         Equal Employment Opportunity

 

1)         In carrying out any project under this Part, the grantee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin.  The grantee shall take affirmative action to insure that applicants for employment are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin.  Such action shall include, but not be limited to, the following:  employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.  The grantee shall post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause.  The grantee shall state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin.  The grantee shall incorporate the foregoing requirements of this paragraph in all of its contracts for program work.

 

2)         The grantee shall cause or require to be inserted in full in any contract and subcontract for work, or modification thereof, all applicable federal and State Equal Employment Opportunity Provisions.

 

b)         Discrimination:  The grantee shall refrain from unlawful discrimination in employment and will undertake affirmative action to assure equality of employment opportunity and eliminate the effects of past discrimination in accordance with the Illinois Human Rights Act.

 

(Source:  Amended at 29 Ill. Reg. 10017, effective June 28, 2005)

 

Section 110.130  Complaint Process

 

In the event of grantee complaint or a Department finding/determination, the grantee and the Department shall follow the procedures set forth in 56 Ill. Adm. Code 2605 (Administrative Hearing Rules).

 

(Source:  Amended at 29 Ill. Reg. 10017, effective June 28, 2005)

SUBPART B: REVOLVING FUNDS

 

Section 110.210  Purpose

 

a)         The Department is responsible for the administration and management of the CDAP.  For the purpose of this program, the Department establishes grants with eligible units of local government throughout the State pursuant to Subpart A of this Part.  Proceeds from those grants may be used to extend financial assistance to private for-profit or not-for-profit entities.

 

b)         In accordance with Title I of the Housing and Community Development Act of 1974 (Act) (42 USCA 5301), the Department may permit grantees to retain the payments, including principal and interest, that may be generated from financial assistance made through the CDAP as long as those funds are deposited into a local revolving fund (RF) for economic development and the grantee has an approved recapture strategy (RF Plan or Recapture Strategy Plan).

 

c)         The primary objective of CDAP-funded revolving funds (RF) is to enable grantees to carry out local economic development activities in a way that will expand economic opportunity, principally for low and moderate-income persons.  Each RF project shall result in private sector job creation or retention.  At least 51% of such jobs shall be filled or retained by persons of low and moderate-income.

 

d)         The purpose of this Subpart is to provide rules governing and relative to the administration of local RFs funded through the CDAP.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.220  Definitions

 

            "Administration" shall mean managing or servicing the day to day operations of CDAP-funded revolving funds.  A financial intermediary may perform the day to day servicing functions of the financial assistance, as provided for in the Financial Intermediary Agreement.

 

            "Closed CDAP Grant" shall mean a grant for which the Department has issued a "Grantee Evaluation Report" (GER) final determination letter.

 

            "Grantee Evaluation Report" shall mean a report summarizing grantee compliance with program objectives governing the grantee's CDAP grant.  The GER shall provide:

 

            a description of citizen participation;

 

            a description of activities completed;

 

            an analysis of benefit to low and moderate-income persons;

 

            an analysis of benefit to minorities, handicapped and female heads of household; and

 

            a description of activities undertaken to affirmatively further fair housing.

 

            "Low and Moderate-Income Persons" shall mean those individuals in a family whose income is less than 80% of the median income of the area (for non-metropolitan areas the non-metropolitan median income or county income shall apply, whichever is higher).

 

            "Program Income", as it pertains to a revolving fund (RF), shall mean gross income earned by the grantee or its recipient directly generated from the use of CDAP funds and/or RF (grants or program income).  Program income includes, but is not limited to, the following:

 

            payments, which may include principal and interest, derived from Financial Assistance Agreements made using CDAP funds;

 

            interest earned on CDAP funds held in a revolving fund account;

 

            payments, which may include principal and interest, derived from Financial Assistance Agreements  made using existing revolving funds.

 

            "Revolving Fund" (RF) shall mean a separate fund (with a set of subaccounts that are independent of CDAP or other program accounts) established for the purpose of carrying out specific financial assistance activities that, in turn, generate program income to be deposited into the RF for use in carrying out activities consistent with the RF approved recapture strategy as defined in Section 110.230.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.230  Recapture Strategy Requirements

 

As a condition of approval for releasing CDAP funds, each grantee undertaking an RF program for local economic development shall submit for Department approval an RF Plan, also known as a "recapture strategy", pursuant to Section 110.210(b) of this Subpart.  This plan shall describe the policies and procedures governing the RF and provide sufficient information to assure the Department that the RF shall be administered in conformance with this Subpart.  The elements listed below shall be included in the RF Plan:

 

a)         RF Goals and Objectives:  A clear set of goals and objectives for the RF shall be developed.  These goals and objectives shall serve as a basis for the development of an organizational strategy and operating plan.

 

b)         RF Strategy:  A strategy shall be developed that  describes how the RF will achieve the stated goals and objectives.  This strategy shall include:

 

1)         A description of the eligible uses of the funds.

 

2)         A description of the geographic area within which the funds will be utilized.

 

3)         A description of the RF's targeting strategy (e.g., retention of traditional industrial base firms, start-up firms, minority and women-owned businesses).  The RF's business targeting strategy shall tie closely with its economic development goals and objectives.

 

4)         A description of how the applications will be generated from potential recipients, including how minority-owned businesses will be reached.

 

c)         RF Management Plan:  A system for effectively managing the RF shall be developed.  This system shall:

 

1)         Describe the financial assistance decision-making process, including any advisory bodies or financial assistance review committees.

 

2)         Identify how the RF will be staffed.  The staff shall have expertise in financial analysis and packaging.

 

3)         Describe how the Financial Assistance Agreements will be serviced and monitored to hold the recipient accountable for receiving public benefit.

 

4)         If the grantee elects to utilize one or more Financial Intermediary Agreements, it shall describe how financial intermediaries may be used to accomplish the purposes of this Section.

 

d)         Assurances:  A RF recapture strategy shall be developed that includes the following assurances:

 

1)         No more than 10% of the annual program income of the RF shall be used for administration of the RF and such costs shall be documented.

 

2)         Assistance provided with RF shall result in at least a 51 percent benefit to low and moderate-income persons and such benefit shall be documented.

 

3)         On a semi-annual basis, the grantee shall submit an RF status report to the Department.

 

4)         All changes to the recapture strategy shall be submitted to the Department for approval prior to implementation.

 

5)         The grantee agrees to pursue all legal remedies to recover delinquent loans and/or enforce compliance with the terms of any Financial Assistance Agreement.  Legal actions shall be those authorized by federal and State law, including civil debt collection actions.

 

6)         The grantee shall assure that one job will be created or retained for every $15,000 of financial assistance provided.

 

7)         A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP revolving funds must be obtained for each project.  Revolving funds may not comprise more than 50% of the financing for any project.

 

8)         The grantee shall assure that any and all environmental reviews will be completed for each project funded and it will assure that prevailing wages are paid, if applicable.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.240  Revolving Fund Administration

 

a)         RFs shall have an administrative structure sufficient to carry out responsibilities for the day-to-day operations of the RF.

 

b)         If the RF administrator is not the unit of local government, a written agreement shall be executed between the grantee and its RF administrator.  This agreement shall remain in effect during the entire term of the Financial Assistance Agreement.  If the grantee invests in a project with a financial intermediary, and the financial intermediary serves as the administrator, the terms governing this administration shall be included in the Financial Intermediary Agreement.  The minimum provisions that shall be included in either the agreement or Financial Intermediary Agreement shall include the following:

 

1)         a statement of work (with a work description and a budget; i.e., a breakdown of all fees and costs);

 

2)         requirements for the maintenance of records and reports;

 

3)         requirements for the management of the RF;

 

4)         applicability of other program requirements;

 

5)         provisions for an annual audit of the RFs;

 

6)         provisions for suspension and termination of the agreement; and

 

7)         policy regarding reversion of assets at the termination of the agreement.

 

c)         Final authority for approving any financial assistance made through the RF shall remain with the chief elected official of the unit of local government, unless formally delegated by resolution and outlined in a formal agreement pursuant to subsection (b).

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.250  Use of Revolving Funds

 

a)         Revolving funds may be used to finance:

 

1)         Financial assistance that shall result in job creation or retention for for-profit or not-for-profit businesses:

 

A)        for fixed assets including land, buildings, machinery and equipment, including new construction or renovation of existing facilities;

 

B)        to provide working capital;

 

C)        to provide loan guarantees and interest supplements through the use of program income for RF loans;

 

2)         Grants to the grantee for public infrastructure improvement projects when the activities will directly result in the creation and/or retention of jobs by a specifically identified for-profit or not-for-profit business which satisfies the requirements of Section 110.280 of this Subpart.  The unit of local government must obtain a Participation Agreement with the benefiting business outlining the job creation and/or retention requirements as a result of this public infrastructure;

 

3)         Activities not listed in this subsection require written approval from the Department prior to final local approval; and

 

4)         Revolving funds may be used for CDBG-eligible activities with prior written approval from the Department, provided that the unit of local government spends the fund in its entirety and the fund ceases to be used for the purpose of business loans.

 

b)         Revolving funds shall not be used to:

 

1)         refinance existing private debts;

 

2)         finance the relocation of an industry or business from one area of the State to another (exceptions require prior written approval from the Department and shall be made in those instances in which a business can demonstrate that it can no longer operate in its existing location and that jobs would be lost to the State if financing is not received);

 

3)         finance any activities for speculative activities (i.e., commercial/retail development without lease agreements) or purposes;

 

4)         conduct general marketing activities; or

 

5)         prepare a CDAP application.

 

c)         Forgiveness of loans or other financial assistance is prohibited.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.260  Requirements for Revolving Fund Projects

 

a)         Each RF project shall create or retain at least one job for every $15,000 of RF investment of CDAP funds.

 

b)         Job creation attributable to CDAP revolving funds shall take place within 24 months after the disbursement of funds.

 

c)         For each RF project that results in job creation, documentation shall be obtained and maintained in the local files, pursuant to Section 110.91(a)(1)(A)(i) and (ii) of Subpart A, which verifies that at least 51% of these new employees benefiting from the project are low and moderate-income persons.

 

d)         For each RF project that results in the retention of jobs, documentation in the form of employee income certifications shall be maintained in the local files, pursuant to Section 110.91(a)(1)(B) of Subpart A, which verifies that a minimum of 51% of the jobs retained are held by low and moderate-income persons at the time the financial assistance is made.

 

e)         A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP revolving funds shall be obtained for each RF project.  Revolving funds shall not comprise more than 50% of the financing for any project.

 

f)         All RF projects shall be conducted within the geographical jurisdiction specified in the approved RF Plan.

 

g)         All businesses receiving or benefiting from revolving funds shall satisfy the requirements of Section 110.91(b)(3)(A), (B) and (C) of Subpart A.

 

h)         Each project shall meet the eligibility requirements of section 105 of the Act.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.270  Administrative Costs

 

a)         Eligible administrative costs include, but are not limited to, salaries, supplies, utilities, Financial Intermediary Agreement costs or similar expenses necessary for managing or servicing the RF portfolio and implementing the RF project.  All administrative costs paid with RF shall be exclusively for RF activities.

 

b)         Administrative costs may be paid from the grantee's own funds or from the RF.

 

c)         Administrative costs paid from RFs shall not exceed 10% of the program income received each calendar year (e.g., loan repayments, interest earned on revolving funds).

 

d)         Administrative costs shall be documented (e.g., timesheets, invoices, etc.).

 

e)         Administrative costs charged to the RF shall not be used for general marketing activities or for the costs of preparing an application for a new CDAP grant from the Department.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.280  Revolving Fund Fundability Analysis

 

Each RF shall have a standard RF financial assistance application.  The RF administrator shall conduct a review and maintain documentation for each RF application to support that minimum program requirements have been satisfied pursuant to Sections 110.250 and 110.260 of this Subpart and that fundability is consistent with the following:

 

a)         Financial Feasibility Evaluation – The RF applicant shall submit supporting financial data which at a minimum shall include the following information:

 

1)         A brief history of the business and past employment growth.

 

2)         Market Information on the business' products or services and identification of existing and potential major customers and competitors.

 

3)         Three years historical financial statements which consist of:  a balance sheet, profit and loss statement and a reconciliation of net worth.  This information shall cover three years, as well as the most recent 90 days.  Accountant's notes or detailed notes, in those instances in which the statement is not audited, shall be included with the statement.

 

4)         Prior three years of tax statements for those small businesses with no formal financial statements.

 

5)         Personal financial statement of each principal (sole proprietor, partner, officer, stockholder) owning 20 percent or greater share of the outstanding stock or interest in the business, as well as a brief personal history statement for each.

 

6)         Projected earnings report which includes a three year projected balance sheet and profit and loss statement, as well as a one year monthly cash flow statement.  Base assumptions shall also be included.

 

7)         Business plan and/or market feasibility information which addresses business products or services and identifies existing and potential major customers and competitors.

 

8)         Financial statements of the general partners, if a business is a limited partnership.  If a business is a corporate general partner, the personal and corporate financial statements of the general partner shall be submitted.

 

9)         A list of major equipment or classes of equipment to be acquired.  For acquisition of new machinery and equipment, reliable vendor cost estimates shall be provided.  For used machinery and equipment acquisition, an appraisal shall be provided which demonstrates that the fair market value is in line with the purchase price.

 

10)         A detailed explanation of the need for and specific use of working capital.  If used for inventory, a list with supporting cost estimates shall be provided.

 

11)         A list of all sources of leveraging documented by written letters of commitment.  Loans from financial institutions used as leverage shall indicate approval as well as the loan amount, the specified term and rate, collateral, and conditions attendant to the loan.  Equity contributions shall be documented through signed letters from the benefiting business.

 

12)         Documentation of the legal status of the borrower and authorization to enter into the loan, e.g., Articles of Incorporation, Secretary's Certificate, Certificate of Good Standing, etc.

 

13)         A letter verifying the number of jobs to be created and/or retained, including the number to be filled by low and moderate-income persons and the specific time period over which this will occur.

 

b)         Determination of Need – Documentation shall be maintained by the RF administrator to verify that the RF application review procedures include criteria to determine if revolving funds are necessary.  Such criteria shall consist of the following elements:

 

1)         Evaluation of Project Costs – All costs associated with the project shall be verified prior to making a funding determination and establishing a funding level.  Third party cost estimates shall be obtained to document all project costs.  If a grantee does not use third-party quotations to verify cost elements, then the grantee shall conduct its own cost analysis using appropriate cost estimating manuals or services.

 

2)         Verification of Other Funding Sources – At a minimum, the loan applicant shall show evidence, in the form of a bank commitment letter, of the level of financing that a bank will commit.  This review shall also include an analysis of the private equity available to be committed to the project.  All sources of funding shall be firmly committed in writing and maintained in the loan file.  All units of local government with existing RFs shall utilize all available revolving funds prior to requesting funds through CDAP.

 

3)         The grantee shall review the applications to ensure that, to the extent practicable, CDBG funds will not be used to substantially reduce the amount of non-RF financial support for the activity.  To reach this determination, the grantee shall conduct a financial analysis of the project, including review of the appropriate projections of revenue, expenses, debt service and return on equity investments.  The extent of the review shall be appropriate for the size and complexity of the project and use industry standards for similar projects, taking into account the unique factors of the project such as risk and location.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.290  Revolving Fund Financial Assistance Closings

 

Each grantee shall establish a financial assistance closing process for its RF that shall govern the negotiation and signing of the agreement and disbursement of the proceeds.  This process finalizes the terms, conditions and covenants of the financial assistance.

 

a)         The grantee shall establish a standardized financial assistance closing agenda or checklist which specifies legal and other programmatic documents required in connection with the Financial Assistance Agreement (e.g., documents and attachments which support collateral, amortization schedule, budget, project description, promissory note, finalization of hiring commitments and all outside financing sources per Section 110.280(b) of this Subpart).

 

b)         The RF administrator shall obtain and review a letter from the recipient's legal counsel that states that the business is in compliance with all federal and State laws, as applicable, and that the company has no hidden liabilities or encumbrances.

 

c)         Financial assistance documents may include the following:

 

1)         A standardized loan document, including a loan agreement, promissory note and security agreement shall be developed which shall be a binding enforceable document.

 

2)         A standardized financial assistance document shall be developed for each type of assistance utilized by the grantee.

 

d)         Documentation shall be maintained in each financial assistance file demonstrating that compliance with all terms and conditions contained in the Financial Assistance Agreement have been met.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.300  Security

 

a)         All RF loans from grantees to their recipients shall be secured with a mortgage, security agreement, promissory note, financing statement or other assignment of rights of the assets of assisted recipients.

 

b)         In the event it is necessary or desirable to take actions to protect or further the interests of the RF, the grantee shall take timely actions to sell, collect, liquidate or otherwise recover loans, guarantees or other forms of financial assistance extended by the RF in accordance with the legal rights of the grantee and its administrator, other participants and the recipient.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.310  Disbursement of Revolving Funds

 

RF administrators shall keep records showing that the invoices or other evidence of the actual costs of the recipient's expenses were verified prior to the disbursement of RF.  Grantees shall also assure that their disbursements are only for items approved under the agreement with the recipient.  No RF drawdown may occur until the closing date has occurred and documentation exists to release RF to the recipient.  The grantee may disburse funds to a financial intermediary that will close the Financial Assistance Agreement with the recipient for appropriate disbursement upon or after closing.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.320  Revolving Fund  Monitoring

 

The purpose of monitoring is to assist recipients so they can successfully generate jobs for low and moderate-income persons and to safeguard the capital utilized to assure availability of funds for future financial assistance projects.  This shall be accomplished through periodic and regular reviews and contact with recipients.

 

a)         A repayment schedule, where appropriate, shall be prepared for each financial assistance project and shall be provided to the recipient at the time of closing.  Procedures shall be established for notifying the recipient in advance of each payment date and following up on delinquent payments.  A sufficient monitoring system shall provide for:

 

1)         regular reporting;

 

2)         scheduled telephone contact;

 

3)         site visits;

 

4)         regular financial assistance committee review of financial assistance status;

 

5)         systematic reports and files; and

 

6)         collection procedures.

 

b)         Each RF grantee or administrator shall maintain a monitoring file for each Financial Assistance Agreement that includes the repayment schedule with repayment dates, if applicable, and amounts, a log of telephone calls with the date and items discussed, copies of correspondence with the recipient and progress reports.

 

c)         The RF grantee or administrator shall designate an individual to prepare and distribute a monthly loan status report, listing all outstanding Financial Assistance Agreements and the individual payment status of each agreement in a format that shall include the recipient's name, financial assistance amount, date of agreement, payment due date, if applicable to the form of financial assistance, and the terms of the Financial Assistance Agreement.  This status report shall also indicate whether recipient's payments, if applicable, are current or delinquent (i.e., late by 30 days, 60 days, etc.).

 

d)         The grantee and the financial intermediary shall incorporate into the Financial Intermediary Agreement their respective responsibilities for monitoring the recipient and the agreement shall also establish the financial intermediary's reporting requirements to the grantee.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.330  Recordkeeping and Reporting

 

a)         Grantees shall maintain all records of financial, programmatic and compliance activities.  All documents that are associated with a financial assistance review process shall be maintained on file with the grantee.

 

b)         All grantees shall submit semi-annual status reports to the Department.  The January-June report shall be due no later than July 31 of each calendar year; the July-December report shall be due no later than January 31 of each calendar year.  Failure to submit semi-annual status reports could result in delayed reimbursement of other active CDAP payments to the grantee or rejection of pending CDAP grant applications. Status reports shall include the following information:

 

1)         Date submitted;

 

2)         Name, title and telephone number of the person preparing the report;

 

3)         Report period;

 

4)         Name of the unit of local government;

 

5)         Name of county;

 

6)         Name of assigned Department compliance review staff;

 

7)         For financial assistance made from revolving funds, the following:

 

A)        Date of agreement;

 

B)        Name of recipient;

 

C)        Initial amount;

 

D)        Total amount to be recaptured, broken out by principal, interest and other forms of payment;

 

E)        Total amount recaptured to date, broken out by principal, interest and other forms of payment;

 

F)         Status (i.e., current (yes/no) or closed);

 

G)        Number of jobs created/retained;

 

H)        Number of jobs created/retained for low and moderate-income persons;

 

I)         Source and amount of other financing;

 

J)         If payments scheduled under a Financial Assistance Agreement are not current, date of last payment;

 

K)        A list of RF Financial Assistance Agreements in default or in bankruptcy and a full description of the current status of those Agreements, including collection efforts;

 

8)          A copy of the amortization, royalty payment, and other program income schedules that relate to each Financial Assistance Agreement; and

 

9)          Signature of the chief elected official for the unit of local government certifying that the information contained in the report is true and correct and is supported by documentation on file at their office.

 

c)         Each Department-funded CDAP Financial Assistance Agreement shall contain the following:

 

1)        Agreement number;

 

2)        Date of Financial Assistance Agreement;

 

3)        Initial amount;

 

4)        Total amount to be recaptured, broken out by principal, interest and other forms of payment;

 

5)        Total amount recaptured to date, broken out by principal, interest and other forms of payment;

 

6)        Status (i.e., current (yes/no) or closed);

 

7)        If payments scheduled under a Financial Assistance Agreement are not current, date of last payment;

 

8)        A list of CDAP Financial Assistance Agreements in default or in bankruptcy and the full description of the current status of those Agreements, including collection efforts.

 

d)         Totals for information listed in subsections (c)(5), (b)(7)(C) and (b)(7)(E) shall be included in the following computation:  Total CDAP recaptured amounts less the total amount of financial assistance provided for the RF plus total RF recaptured amounts less eligible infrastructure expenditures less eligible administrative expenses plus interest earned on deposits.  This formula allows the grantee to determine the total amount in its RF.  This figure shall match the balance shown on the grantee's bank statement at the end of the report period.  A copy of the bank statement shall be attached to the semi-annual report and submitted to the Department.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.340  Department Monitoring

 

a)         The grantee shall be responsible for operating the RF in accordance with the terms of its CDAP grant agreements and its RF Plan.

 

b)         The grantee shall permit any agent authorized by the Department, upon presentation of credentials, to have full access to and the right to examine any documents, papers, and records of the grantee and the RF relating to transactions of the RF.

 

c)         The Department shall monitor RF programs using on-site visits, semi-annual status reports submitted by the grantee, disbursement transactions and other contacts with the grantee as necessary.

 

d)         Department monitoring procedures shall concentrate on financial assistance evaluation and decision-making as well as servicing and monitoring of RF agreements.  The grantee shall remain responsible for the actions, compliance and recordkeeping of its administrator.  Grantee communities are responsible for establishing a system to monitor the performance of their RF administrator.

 

e)         Pursuant to its obligations under the Act, this Part, and the applicable grant agreements, the Department will conduct a program of RF visitations for the purpose of providing technical assistance and monitoring the operations of the local RF grantees.  As a result of those visits, the Department may take any of the following actions, by way of sanctions against inappropriate local RF activities or against the grantee jurisdiction:

 

1)         issue "Findings" outlining deficiencies in the RF operations and requiring that they be corrected within a specified time;

 

2)         the Findings may mandate the return to the RF account, from non-Block Grant sources, amounts disbursed for ineligible activities;

 

3)         require for a specified period of time (including permanently) that an RF seek prior written approval from the Department for any specified activity. Specified activities may be limited, for instance, to include only new Financial Assistance Agreements made, or may include all RF activities.  This sanction may include the requirement that all application materials for new financial assistance be forwarded for review to the Department;

 

4)         the grantee may be deemed to be unable to continue operations of a local RF program, in which case the Department may take any of the following actions:

 

A)        revocation of local authority to operate a CDBG RF;

 

B)        instruct the grantee to continue to collect loan payments of existing Financial Assistance Agreements and service the current portfolio.  However, no additional Financial Assistance Agreements would be allowed to be made from the portfolio.  Instead, on a yearly basis the balance available in the account would be returned to the Department; and

 

C)        instruct the grantee to turn over the cash balance and loans in the RF to the Department.

 

f)         The grantee or RF administrator shall conduct at least one on-site monitoring visit of each RF financial assistance recipient to verify job creation and retention, low and moderate-income benefit, documentation of expenditures, and compliance with the other terms and conditions of the Financial Assistance Agreement before closing out a project and shall maintain documentation of the visit.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.350  Evaluation of Performance

 

a)         The Department shall review the RF to determine if the grantee has administered and carried out its RF activities in compliance with the requirements and criteria outlined in Subpart B, with emphasis upon:

 

1)         The requirements of Section 110.230 that there be an approved updated recapture strategy.

 

2)         The requirements of Sections 110.250 and 110.270 regarding the eligible uses of revolving funds and administrative costs.

 

3)         The requirements of Section 110.260, specifically Section 110.260(c), and Section 110.270(d) that outline the basic RF requirements, stating that, for each Financial Assistance Agreement, not less than 51% of the jobs created or retained shall benefit low and moderate-income persons.

 

4)         The development of and adherence to sound administrative principles and procedures pursuant to the requirements of Sections 110.240, 110.280 and 110.290.

 

5)         The requirements of Sections 110.300, 110.310, and 110.320 of the RF implement solid lending and investing practices and strict follow-up procedures.  This shall be evidenced by a Financial Assistance Agreement compliance worksheet  acceptable to the Department that includes information pertaining to and based upon the number of Financial Assistance Agreements made through the RF, the number of non-performing Financial Assistance Agreements, the underlying justification for the financial assistance (Section 110.280) and the documentation on file regarding follow-up, including legal action.

 

6)         The grantee's past performance and past willingness to act on Department recommendations resulting from its periodic monitoring visits pursuant to Section 110.340.

 

b)         With the receipt of any new economic development grant awarded under Subpart A of this Part, the Department shall evaluate the performance of an existing RF using the criteria found in subsection (a) of this Section as a condition of retaining future repayments.

 

(Source:  Amended at 28 Ill. Reg. 13468, effective September 23, 2004)

 

Section 110.360  Program Income Subject to the Act

 

a)         Any program income (as defined in Section 110.220 of this Subpart) that the Department has permitted a grantee to retain and that is realized while the grantee has an open CDAP grant is subject to the requirements of the Act and 24 CFR 570.

 

b)         Program income retained by the grantee generated from a CDAP grant award shall always be subject to the requirements of the Act and 24 CFR 570 regardless of whether the CDAP grant that generated the income is closed.  For purposes of this Subpart, a closed project is defined in Section 110.220.  

 

c)         Regardless of when the program income is earned, the RF shall always be subject to the requirements of the approved recapture strategy and each beneficiary of funds through the RF shall benefit at least 51% low and moderate-income persons.

 

(Source:  Amended at 38 Ill. Reg. 21323, effective October 30, 2014)