Recovery.gov - Track the Money

The primary use of funds will be grants and loans for energy and green retrofits of eligible, accepted properties. HUD will commission due diligence and underwriting for each project accepted for processing. A detailed energy and green retrofit plan will be developed with the property owner, and will be the basis for funding. Grants and loans are available up to $15,000 per eligible unit based upon the needs and opportunities identified, and the agreed-upon retrofit plan. Funding obligations will be placed in escrow, overseen by HUD, for completion of the specific scope of retrofits.

Project/Activity: Grants for energy and green retrofits of eligible, accepted properties.
Description: After application review and acceptance of properties, HUD will solicit third-party due diligence analyses and reports to assess individual property needs and opportunities, will propose to the property owners a scope of retrofit, and upon acceptance by the owner, will close the transaction. Funds will be transferred into a rehabilitation escrow account to fund the planned retrofits, as well as certain owner incentives allowed under the Recovery Act. The owner will be responsible for completion of retrofits, and for the ongoing green operations and maintenance of the properties.
Estimated Funding: $85,000,000.00

Project/Activity: Loans for energy and green retrofits of eligible, accepted properties.
Description: After application review and acceptance of properties, HUD will solicit third-party due diligence analyses and reports to assess individual property needs and opportunities, will propose to the property owners a scope of retrofit, and upon acceptance by the owner, will close the transaction. Funds will be transferred into a rehabilitation escrow account to fund the planned retrofits, as well as a grant for certain owner incentives allowed under the Recovery Act. The owner will be responsible for completion of retrofits, and for the ongoing green operations and maintenance of the properties.
Estimated Funding: $150,000,000.00

Project/Activity: Deliver training, technical assistance, monitoring, enforcement, research and evaluation activities.
Description: HUD will hire staff, build systems and capacity and work with grantees to ensure effective and efficient implementation.
Estimated Funding: $15,000,000.00

The Office of Affordable Housing Preservation has, for the past ten years, administered the Mark-to-Market program, a property retrofit and refinance program. The new Green Retrofit Program involves a similar scope of work to Mark-to-Market (with notable differences), and the systems in place to accept, assign, track, monitor, and evaluate the program, its participants, timeliness, quality, fiduciary responsibility, quality control, and overall program monitoring and evaluation will be utilized for the new Green Retrofit Program.

(1) Data Collection and Reporting
a. Spend Plans: HUD will commission due diligence and underwriting for each project accepted for processing. A detailed energy and green retrofit plan will be developed with the property owner, and will be the basis for funding. As funds for the executed plans are obligated, grantee spending will be posted on hud.gov/Recovery.
b. Financial Reports: HUD has two financial reports that will be generated and analyzed on a weekly basis. These include a Summary Financial Report that indicates the amount of funds for each program, and a Funding Notification Report, which shows the amount of funding by program for every jurisdiction, including local governments and some states.
c. Quarterly Recipient Reports: The cornerstone of HUD’s monitoring and evaluation system is the project and contract data collected from grantees. The Recovery Act specifically requires data collection fields for grantees and contractors. In addition to these data, HUD will also collect program-specific measures from grantees

(2) Ongoing Grantee Management: HUD categorizes grantees by risk, then monitors and allocates interventions, including training, technical assistance and if warranted, disciplinary action, accordingly. High Risk grantees will generally be screened out as part of the selection process; financially infeasible projects, projects with current health and safety violations, serious management findings, enforcement actions, fair housing violations, or prior participation violations that would prevent the property owner from participating in new business with HUD, will not be eligible to participate in the program. Prior to obligating funds, HUD will conduct a final feasibility study to ensure a property is viable, and will require the grantee to execute binding legal documents outlining responsibilities and remedies for violations of the terms of the grants or loans. Independent property inspections and verification are required as conditions of release of funds. A financial incentive has been created for grantees that complete the scope of work timely and on budget. Owners whose project retrofits are materially behind schedule or over budget will not receive this incentive. Serious time delays may result in HUD rescinding the funding and sweeping the escrowed funds. Any misuse of funds may result in a range of HUD enforcement actions.

(3) Longer Term Evaluation and Research: Evaluation of property performance after program retrofits will measure utility consumption before and after retrofits to calculate, on a per unit, per property, and portfolio basis, dollars and units of energy saved, translated into carbon/greenhouse gas emissions and equivalent “cars taken off the road” measures. Research will include studies of long-term utility savings, beneficiaries of those savings. Evaluation will include multiple regression analyses to analyze savings by retrofit scope, type, dollars invested, geography, building type, resident make-up, etc., in order to understand where the best future opportunities exist. Research will include indoor air quality analyses and the impact on residents (together with Centers for Disease Control and Prevention). HUD will evaluate the long term financial and physical stability of the participating properties to measure effectiveness of the program as a preservation tool.

With respect to reporting, OMB has issued detailed guidance on the requirements for recipients of the Recovery Act funds. Specifically, each prime and first tier recipient is required to report specified information to HUD 10 days after the end of each calendar quarter. This includes but is not limited to a detailed list of all projects and activities for which Recovery Act funds were obligated or expended, an evaluation of the completion status of the project or activity, and an estimate of the number of jobs created or retained. In addition to the overarching requirements of the Recovery Act, HUD has also identified a number of program-specific measures that will be collected through this reporting process.

HUD expects that the transparency requirements of the Recovery Act, specifically the requirement to publish both spending and recipient performance reports, will create accountability amongst its managers and grantees. That said, HUD will establish additional internal management controls to create a greater level of accountability for performance. The HUD Recovery Act program management team will work with the leads of the program and cross-cutting teams to prepare a bi-weekly program snapshot report for the steering committee to review with the Deputy Secretary and Secretary. Drawing from the program and risk management plans, the reports will include summary-level quantitative financial and programmatic performance measures and targets, key milestones, and issues or risks. Interim spending and performance targets will be set to ensure that annual objectives from the program plans are met. Performance data will be summarized by grantee risk category, as defined in the agency’s risk management plan. Performance measure targets and milestones that are missed, or that are in jeopardy of being missed, will be accompanied by an explanation of the reasons why, including any issues affecting progress and the specific plan for their resolution or mitigation. The report will also identify specific grantees with performance issues, and summarize the actions being taken to address them. In addition to the bi-weekly reporting, each program team will meet with the Secretary, Deputy Secretary and Steering Committee on a monthly basis to review a more detailed set of Recovery Act performance measures. On a quarterly basis, these monthly meetings will include updated grant recipient data described above.

This program does not invest in Federal infrastructure. However, for HUD’s programs that include construction or rehabilitation or are Federal investments in privately owned housing: New buildings and major renovations financed through formula grants are required to meet local energy codes. New construction and major renovations financed through some competitive grant programs will, in the case of single family homes, be built to the standard for Energy Star for New Homes (15 percent more efficient than the 2004 International Residential Code); or in the case of multifamily buildings to exceed ASHRAE (American Society of Heating, Refrigeration, and Air-conditioning Engineers) Code 90.1 2007, Appendix G, by 20 percent. HUD’s competitive program requirements also ensure that new construction and major renovations follow sustainable design and green construction principles to (1) optimize energy efficiency and performance; (2) employ integrated design principles (and controls); (3) protect and conserve water; (4) enhance indoor air quality; and (5) reduce environmental impact of materials used.