Reallocation of ESG Funds

New rules define reallocation process

Understanding the New ESG ProgramThe new Emergency Solutions Grant (ESG) regulations released by HUD on November 15, 2011, defined the process to reallocate funds because of the recipient’s failure to submit and obtain HUD approval of a consolidated plan will be reallocated.

Click here to read a summary of all of the ESG Reallocation.

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.

Grant funds reallocated by a city or urban county will be reallocated as follows:

  • HUD will make funds available to the State;
  • HUD will promptly notify the State of the amounts available for reallocation;
  • Within 45 days after notification, the State must submit a substantial amendment to its coordinated plan to HUD (in accordance to 24 CFR part 91.);
  • The same requirements that apply to allocated grant funds apply to reallocated grants funds, except that the State must redistribute reallocated funds:
    • To nonprofit organizations and local government in the geographic area of the city or urban county; and
    • If funds remain, to nonprofit organizations and local government throughout the state.

Grant funds returned by a State will be reallocated as follows.

HUD will make the funds available:

  • To cities and urban counties in the State that were not allocated funds because the amount they would have been allocated did not meet the minimum requirement
  • If funds remain, to counties that are not urban counties; and then
  • Any remaining funds to cities and urban counties that were allocated funds.

HUD will notify eligible recipients of available funds by letter or Federal Register notice which will specify how awards will be made.

Within 45 days after of the notification date, eligible recipients must submit to HUD:

  • A substantial amendment to its approved consolidated plan (in accordance with 24 CFR part 9); or
  • If the eligible recipient does not have an approved consolidated plan, an abbreviated consolidated plan that meets the Federal Register requirements or HUD notification letter.

The same requirements that apply to grant funds allocated apply to reallocated grant funds.

Click here to read our overview of reallocation process.

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