Use of ESG Funds

The regulations will go into effect
January 4, 2012

Understanding the New ESG ProgramThe new Emergency Solutions Grant (ESG) regulations released by HUD on November 15, 2011, defined matching requirements as well as how recipients can use the funds.

Click here to read a summary of all of the ESG Award and Use of Funds.

HUD officially published the regulations for the new Emergency Solutions Grant (ESG) program in today’s Federal Register. The regulations will go into effect in 30 days, on January 4. Public comments will be due in 60 days, on February 3, 2012. Interested persons may submit comments electronically through the Federal eRulemaking Portal. The final regulation on defining “homeless” was also officially published in the Federal Register today, and those changes will also go into effect on January 4, 2012.

The recipient must make matching contributions to supplement the recipients’ ESG program equaling the amount of HUD ESG funds.

If the recipient is a State, the first $100,000 of the fiscal grant does not require a match. But the recipient must transfer the benefit of this exception to its sub-recipients that are least capable of providing the recipient with matching contributions. The recipient may require its sub-recipients to make matching contributions to help meet the recipient’s matching requirements and these may be obtained from any source including:

  • Any Federal source other than the ESG program if:
    • the laws governing any funds to be used do not prohibit those funds from being used to match ESG funds; and
    • ESG funds are used to satisfy another Federal program matching requirements, then funding from that program may not be used to satisfy these matching requirements
  • and state, local, and private sources.

The Means of Carrying Out Grant Activities depend on the recipient.

If the recipient is a State:

  • the recipient may use an amount consistent with the restrictions to carry out administrative activities through its employees or procurement contracts
  • and it has been identified as the HMIS lead by the CoC, funds may be used to carry out HMIS activities. The recipient must subgrant the remaining fiscal year grant funds to:
    • units of local government in the State, including counties that receive direct HUD ESG funds or
    • nonprofit organizations, provided that for emergency shelter activities, the recipient obtains a certificate of approval from the local government for the geographic area in which those activities are to be carried out.

If the recipient is not a State:

  • the recipient and all sub-recipients may carry out all eligible activities through the employees, procurement contracts, or subgrants to private nonprofit organizations
  • but is an urban county, it may carry out activities through any of its member governments as long as the county applies the same requirements applicable to local government sub-recipients under this part.

Click here to read our overview of uses of ESG Funds.

Click here to read all of our posts on the new ESG regulations.