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An IBTS employee meets with a homeowner enrolled in a CDBG-DR program before construction on the home begins. It’s important to perform Quality Control before construction begins to avoid problems down the road.

Although many CDBG-DR grantees are familiar with regular CDBG programs, CDBG disaster recovery programs have important differences that require adjustments to existing CDBG policies, and sometimes even the development of new policies.

“You can’t treat your CDBG-DR program like a regular CDBG program,” says IBTS Economic Development and Disaster Recovery Program Director Mike Spletto. “Disaster recovery programs can be over 100 times larger than regular CDBG programs. You need to change your processes to get residents back into their homes more quickly.”

Grantees must look at updating their processes to accommodate the size and scope of the program. To help familiarize grantees with the differences between regular and disaster CDBG programs, Spletto offers the following advice.

Understand duplication of benefits and how to prevent it.

• A duplication of benefits (DOB) occurs when any person, business, or entity uses federal funds to cover losses for which they have already received assistance from another source.
• DOB isn’t relevant to regular CDBG programs but is one of the trickiest and most important concepts of the CDBG-DR program to understand. It applies to the overall program and to individual homeowners, and often results in returning funds to HUD.
• See HUD’s duplication of benefits webinar to develop a basic understanding, and reach out to your HUD representative if you have further questions.

Stay current on laws and regulations pertaining to CDBG-DR assistance as they are released.

• Unlike regular programs, HUD will make regulatory changes to CDBG-DR programs throughout the life cycle of the program.
• Laws and regulations passed after your CDBG-DR appropriation will still apply to your program and you will become noncompliant if you don’t adjust your policies accordingly.
• Updates will be published in a Federal Register notice and can be found on HUD’s website.
• For example, the Bipartisan Budget Act of 2018, passed in February 2018, changed how Small Business Association (SBA) disaster loans can be assessed regrading DOB.
  • Previously, the SBA loan amount that homeowners were approved for would be counted towards a DOB.
  • Now, the only the amount the homeowner actually accepts will be counted towards a DOB. Read more about the policy update here.

Adapt your homeowner application process.

• Adjust your regular CDBG application should to gather the required disaster recovery information, such as damaged property information and assistance received from other sources.
• Remove information in your current application that is not relevant to your disaster recovery program. This will expedite the process and relieve homeowners’ stress.
• See this CDBG-DR homeowner application sample from HUD.

Ensure that your monitoring and quality control procedures can handle the size and scope of your CDBG-DR program.

• Require quality control (QC) to be performed at each major project milestone before the project can move forward. This prevents noncompliance issues found at project closeout, which can mean returning all funding to HUD.
• Spletto recommends QC at the following milestones:
  • Intake and eligibility
  • Pre-construction
  • Construction
  • Closeout

Take a tiered environmental review approach to expedite the process. 

• In a CDBG-DR program, you will likely have hundreds of homes and project sites to review in a short time frame. This requires an expedited process.
• A tiered approach, which can reduce the time needed to complete an environmental review by a month or more, includes two reviews:
  • Tier 1 – A broad review of the entire county, town, neighborhood, etc. identifies and resolves issues impacting the entire project region.
  • Tier 2 – Site-specific reviews are conducted for each home or other construction site after Tier 1 is completed.
• See more information from HUD on how to use tiered environmental reviews.

Hire a consultant to assist with the environmental review.

• “Environmental review is one of the regulations that if not done correctly, you’ll be required to return your money to HUD,” says Spletto. “You can’t go back and re-do it after you’ve already started building.”
• Spletto recommends either having a Section 106 coordinator on staff who meets the Secretary of Interior’s standards, or hiring a consultant who specializes in environmental reviews to keep the quick and error-free.