Recovery.gov - Track the Money

NSP2 grantees have the opportunity to develop programs responsive to local real estate market conditions by choosing among the five eligible uses of NSP funds. Those uses are: (1) establishment of financing mechanisms for purchase of foreclosed homes; (2) purchase and rehabilitation of abandoned or foreclosed homes; (3) land banking of foreclosed homes; (4) demolition of blighted structures; and (5) redevelopment of vacant or demolished property. As NSP2 is a new competitive program open to states, local governments and non-profit organizations, HUD cannot estimate the nature and scope of programs that applicants may propose or that may ultimately be selected for funding. HUD will manage NSP TA under a demand-response system that will direct individual grantee and group technical assistance as requested by HUD or grantees to address risk and/or capacity issues in implementing NSP1 and 2.

Project/Activity: There are five eligible uses under NSP2 (and a greater number of possible activities): establishment of financing mechanisms for purchase of foreclosed homes; purchase and rehabilitation of abandoned or foreclosed homes; land banking of foreclosed homes; demolition of blighted structures; and redevelopment of vacant or demolished property.
Description: As NSP2 is a new competitive program open to states, local governments and non- profit organizations, HUD cannot yet estimate the nature and scope of programs that applicants may propose or that may ultimately be selected for funding.
Funding: $1,930,000,000.00

Project/Activity: NSP TA will provide technical assistance to NSP1 and 2 grantees to increase their capacity to carry out neighborhood stabilization programs.
Description: NSP TA will use the demand-response system to determine which communities need assistance. HUD plans to direct some of the assistance to NSP1 high risk grantees to provide on-site assistance to meet the statutory fund use deadline. HUD HQ, selected field offices, and grantees will also be able to request or direct TA to address specific capacity needs. TA may include, but is not limited to, individual on- site consultation and training, group training, web materials, and printed materials such as detailed model programs
Funding: $50,000,000.00

Project/Activity: HUD will provide training, technical assistance, monitoring, enforcement, research and evaluation activities.
Description: HUD will hire staff, build IT systems and work with grantees to ensure effective and efficient implementation.
Funding: $20,000,000.00

Description of Agency Periodic Review of Partners' progress:
(1) Data Collection and Reporting
a. Spend Plan Submissions: These identify each grantee’s plan for the use of funds. For NSP2, the use of funds will be described in detail in the competitive applications. If selected, recipients will submit details on the proposed projects and activities to HUD’s reporting system. HUD field staff must review and approve the plans in the system before any draw vouchers or performance reports may be submitted.
b. Financial Reports: HUD will generate and analyze two financial reports. 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 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 DRGR collects summary information on program beneficiaries, start and end dates of each activity, national objective, number of housing units, location information including addresses of acquired and rehabilitated properties, dollars budgeted, obligated, and expended.
d. Sample Survey of Outcomes: HUD has allocated a portion of the program funds for research, including an evaluation of NSP, which will capture changes in occupancy, tenure, and property values in NSP neighborhoods.

(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 are those who are new to the CDBG program, habitually poor CDBG or HOME performers, have open monitoring or audit findings, significant funding increases, recent critical staff turnover, extremely high Congressional or national media interest. HUD looks for factors, such as (1) timely expenditure of funds, (2) quality expenditure of funds, (3) budget/cost compliance, and (4) legal compliance and prevention of fraud. HUD may impose additional grant conditions such as more frequent reporting or HUD pre-approval of smaller draw requests than normal, and HUD may conduct frequent remote and on-site monitoring pursuant to existing monitoring guidelines and practices for the regular CDBG program (CPD Monitoring Handbook and Risk Analysis), with specific risk and monitoring guidelines under development for NSP. HUD staff and NSP TA contractors will provide a broad range of capacity building, such as on-site consultation and project-specific training, web and classroom training on technical areas such as land banking, financial compliance, environmental reviews and model program designs. The CDBG regulations in the 24 CFR 570.900 series provide for a very broad range of corrective actions and due process designed to stop noncompliance, prevent recurrence of the problem and mitigate the negative effects of the problem. HUD’s choice of corrective actions ranges from sending a warning letter to a grantee, to requiring repayment of the grant funds, to legal action.

(3) Longer Term Evaluation and Research: HUD will perform an evaluation on NSP, which will capture changes in occupancy, tenure, and property values in NSP neighborhoods.

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. In addition, HUD will establish internal management controls to create a greater level of accountability for performance. There are three levels of internal performance reviews: 1) 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. 2) In addition to the bi-weekly program management team meeting and 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. 3) On a quarterly basis, these monthly meetings will include updated grant recipient data described above.

NSP is primarily a single family housing program; HUD expects that the majority of the funding will directly address housing needs associated with foreclosed and abandoned residential properties . However, a limited amount of infrastructure may be funded as grantees redevelop vacant or demolished properties and need to construct or renovate infrastructure to support their housing projects.