Department of economic and community development 498 office of community development chapter 20: community development block grant (cdbg) program




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F. INTERIM FINANCE PROGRAM


The Interim Finance Program (IFP) utilizes funds not disbursed in the State’s Letter of Credit for grants to communities to assist businesses or developers in creating housing and job opportunities for low and moderate income people through short-term loans.

1. Threshold Criteria:
(a) The proposed activities must meet the low and moderate income objective as described below:
(i) at least 51% of the jobs created by IFP expenditures must be provided to low and moderate income persons,
(ii) at least 51% of the housing units created by IFP expenditures must be occupied by low and moderate income households, or
(iii) the IFP expenditures reduce the development costs for new mulit-family, non-elderly housing construction where not less than 20% of the units will be occupied by low and moderate income households at affordable rents and the proportion of the total cost of developing the project to be borne by the IFP funds is no greater than the proportion of units in the project that will be occupied by low and moderate income households.
(b) Complete the required IFP appication materials.
(c) The application amount must be between $500,000 and $5,000,000. The Commissioner of DECD may waive the $500,000 minimum requirement if OCD determines it is in the best interest of the State and if OCD incurs no additional administrative costs as a result of the smaller award.
2. Special Program Requirements: IFP applicants must also comply with the following:
(a) Need for Financing: There must be a demonstrated need for an IFP loan in order for the project to be funded. The need may be based upon either a gap in available funding for the project or on a determination that the costs of financing so adversely affect the project’s rate of return that the project would not be undertaken without additional assistance. IFP grantees must demonstrate the proposed rate and term have been set to ensure the assistance provided is the minimum needed and the proposed assistance is necessary and appropriate to carry out an economic development project.

(b) Commitment of Non-CDBG Funds: The business being assisted must demonstrate that all non-CDBG financing, both permanent and interim, necessary for the project’s completion has been secured.


(c) Community Benefit: The project must result in a substantial benefit to the community: job creation/retention, tax revenue increases, new housing opportunities, or public facility inmprovements relative to the public dollar investment.
(d) Surety: The business being assisted by the IFP grantee must secure an unconditional, irrevocable letter of credit for the full amount of the Interim Financing Loan (principal plus any accrued interest to term) from a lending institution acceptable to DECD which will be assigned to the State. The State may accept a FAME guarantee in lieu of an irrevocable letter of credit, or other surety instrument deemed acceptable by DECD.
3. Selection Process: IFP grants will be made on a first come, first served basis. Projects that meet requirements may be awarded IFP grants until the amount of funds available in the State’s letter of credit has been committed. Following full commitment of the IFP, the State wil maintain a waiting list of eligible projects to be funded. If projected funds will not be available for a minimum of six months, the State reserves the right not to accept any additional applications.
4. Approval Process: Through is Technical Assistance Providers, direct mailings, and other marketing methods, the State will advertise the availability of funds within the IFP. Communities interested in applying will: notify the State of their intent to apply, identify the proposed loan recipient and provide an application describing the project. Following the acceptance of a complete application by the State, the DECD or its designee will conduct a financial analysis of the project. DECD will determine if the IFP loan is needed, if all non-CDBG permanent and interim funds are committed, and if an irrevocable letter of credit is in place. The DECD staff will recommed the loan terms and interest rates to the Director of the OCD. The State will review all other program requirements. If these requirements are met, the Commissioner of the DECD will make a grant award based on the project meeting all program requirements.
SECTION 4. PLANNING
A. PROJECT DEVELOPMENT PHASE PLANNING GRANTS
The Project Development Phase Planning Grant Program enables communities to gather, analyze, and provide information required by the Project Development Phase process.
1. Threshold Criteria:
(a) Eligible Applicants: All communities invited into the Project Development Phase for a CDBG Program except for the Community Planning Grant, Housing Assessment Planning Grant and Development Fund Programs.
(b) Eligible Activities: Planning funds may only be used for planning activities necessary to complete Project Development Phase requirements.
(c) Need and Capacity: Applicants must demonstrate a need for financial assistance and provide a schedule for completion.
(d) Federal and State Certifications: Communities applying for Project Development Phase Planning Grants must certify they will comply with all applicable federal and state CDBG program certifications.
2. Selection Process: Communities will submit a Project Development Phase Planning Grant Proposal that demonstrates need for financial assistance to complete applicable Project Development Phase requirements and will describe how the funds will be used to complete those tasks.
3. Approval Process: OCD staff will review threshold criteria and the applicant's proposal. Project Development Phase Planning Grants will be awarded on an as-needed basis. Recipients and amount of assistance shall be determined by the OCD staff.
4. Maximum Grant Award : $2,500


B. COMMUNITY PLANNING GRANTS
The Community Planning Grant (CPG) Program provides funding to communities or community partnerships that have clearly identified a local community or economic development problem and lack the resources to develop a strategy for solving that problem.
1. Threshold Criteria and Certifications: Community Planning Program funds will be distributed through an annual grant application selection process.
Eligible Activities: CPG funds may be used for planning only activities that include studies, analysis, data gathering, preparation of plans and maps, and identification of actions that will implement plans. Engineering, architectural and design costs related to specific projects are not eligible.
Project Benefit: The program activities must meet one of the CDBG Program's national objectives. The outcome of the planning activities, if implemented, must provide either a benefit to low and moderate-income persons, or prevent or eliminate slum or blighting conditions.
2. Special Program Requirements:
(a) Past Performance: In order to be eligible to apply for the 2001 Community Planning program, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds prior to application.
Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Maximum CPG Grant Amount: $10,000.

3. Selection Process: The selection process will consist of two phases - an application phase and a project development phase.
Priority for funding will be given to the following categories in the numbers indicated: Public Facilities and Public Infrastructure (4), Economic Development (3) and Tourism Opportunities (3).
Phase I Application: The maximum application length is six pages. The application deadline is February 16, 2001.
Each application will be rated in relation to all others. A minimum of 80 points from the Problem Statement, Development of Strategy, Citizen Participation and Project Leverage is required for consideration to be invited into the Project Development Phase.
(a) Problem Statement (40 points): A description of the problems, how they were identified, the impact on the community and on LMI persons or slum/blighting conditions.
(b) Development of Strategy (40 points): A description of the tasks proposed to solve your community's problems. Description of how the project will address a CDBG national objective. Include a proposed budget and describe how funds will be used.
(c) Project Leverage (10 points): A description of other resources (local, state, federal, private) that will be contributed to the project.
(d) Citizen Participation (10 points): A description of how citizens, community groups, and project beneficiaries were involved in this application and how involvement will continue.

C. HOUSING ASSESSMENT PLANNING GRANTS
The Housing Assessment Planning Grant (HAPG) Program provides funding to communities or community partnerships to study their housing problems. Planning funds will enable communities to develop housing strategies that may be implemented with future CDBG funds. From program year 2001 and forward, housing assistance grant awards will be made to HAPG recipients or communities completing similar housing planning programs.
1. Threshold Criteria and Certifications: Housing Assessment Planning Grant funds will be distributed through an annual application selection process.
Eligible Activities: HAPG funds will be used to conduct a comprehensive study of housing issues for the community. The study will cover issues such as: number and age of units, condition, energy considerations, affordability, occupancy rates, need for new construction, rehabilitation, code enforcement, elderly, assisted living, special needs housing and financial resources to address housing needs. Engineering, architectural and design costs related to specific activities are not eligible.
Project Benefit: The proposed activities must meet one of the CDBG Program's national objectives - providing benefit to low and moderate-income persons, or preventing or eliminating slum or blighting influences.
2. Special Program Requirements:
(a) Past Performance: In order to be eligible to apply for the 2001 Housing Assessment Planning program, communities that received CDBG grants in or prior to 1997 must have closed their grants prior to application. Communities that received CDBG grants in 1998 must have conditionally closed their grants prior to application. Communities that received CDBG grants in 1999 must have obligated 50% of their benefit activity funds prior to application.
Exceptions: Applicants may request a waiver of this requirement under the following circumstances: l) program delays have occurred beyond the control of the grantee due to unforeseen changes in availability of funds or acts of nature; 2) the recipient has received unanticipated program income and expenditure of grant funds has been delayed; 3) the job creation goals of a previous grant have not been fulfilled; or 4) special circumstances as determined and approved by the OCD Director.
(b) Maximum HAPG Grant Amount: $15,000.

3. Selection Process: The selection process will consist of two phases - an application phase and a project development phase.
Phase I Application: The maximum application length is four (4) pages. The application deadline is February 16, 2001.
Each application will be evaluated by the OCD Review Team based on the criteria listed. The Review Team will gather information for the applicant to include: percent of poverty, degree of substandard housing, rent-burdened households and affordability index. This information will be obtained from census data, the Maine State Housing Authority and the State Planning Office.
The application will include a brief description of the housing problems of the community, how these were identified, public participation in determining housing issues and why the community is interested in addressing its housing problems.
(a) Problem Statement: A description of the problems, how they were identified, and their impact on the community.
(b) Development of Strategy: A description of the tasks associated with formulating a solution for your community's housing problems. Description of how the project will address a CDBG national objective.
(c) Citizen Participation: Description of how citizens, community groups and others were involved in the identification of the problem and the development of an application.
Successful applicants will be invited into the project development phase process. Upon completion of the housing study, applicants interested in implementing the action steps of their housing plan will submit a letter of intent to request Housing Assistance grant funds along with this housing study and other required information. The housing study will be reviewed by OCD prior to the 2002 CDBG program. The review will determine the communities selected for invitation into the project development phase of the 2002 Housing Assistance grant program.


D. TECHNICAL ASSISTANCE PROGRAM

The Technical Assistance Program provides selected communities with funds to contract with regional organizations to provide application development, development of alternative funding sources, grant administration and general program assistance to Maine’s communities.


The Office of Community Development will use Technical Assistance funds to: conduct workshops, produce program materials, implement the CDBG Administrator’s Certification Training Program and outreach to communities.


SECTION 5. REDISTRIBUTION OF GRANT FUNDS
This section describes the methods by which undistributed funds, disencumbered funds, additional funds received from HUD, and program income will be redistributed.
A. ADMINISTRATIVE REDISTRIBUTION OF GRANT FUNDS
1. Local Government Grants from the State: Local governments receiving grants as a result of the 2001 CDBG program but failing to have their projects substantially underway (staff hired, environmental review complete, program costs obligated) within twelve months of the grant award, may have their grant rescinded by DECD. Unexpended grant funds may be added to any open CDBG contract, used to make additional awards in any 2001 CDBG program, or added to the available monies for the 2001 or 2002 competition.
Unexpended funds remaining in the grantee's CDBG account at grant closeout, funds remaining in a grantee's award but not drawndown upon grant closeout and funds returned to DECD because of disallowed costs may be added to any open CDBG contract, used to make additional awards in any 2001 CDBG program or added to the available monies for the 2001 or 2002 competition.
2. Unallocated State Grants To Local Governments: Unallocated grant funds resulting from lack of adequate program competition or demand in any of the available 2000 CDBG programs may be added to any open CDBG contract, used to make additional awards in any 2001 CDBG program or added to the available monies for the 2001 or 2002 competition.
3. Basis for Redistribution: The decision to redistribute funds will be made after staff evaluation of the following: the total funds available, requests for additional funding from current CDBG grantees, any applicants that received scores above the specified point threshold in 2001 competitions but did not receive funding and the possibility of holding additional competitions during the 2001 Program. In all cases, these additional competitions and the subsequent programs developed will be subject to the 2001 Program Statement.
In no case will the total of the original grant award and any redistributed funds to that grant exceed the maximum grant award for that program.

B. PROGRAM INCOME
As used in this Proposed Statement, “Program Income” means the gross income received by a grantee from any grant-supported activity. Applicants will refer to the CDBG Regulations and the Maine Office of Community Development policies on program income.


SECTION 6. APPEALS
An applicant wishing to appeal DECD's decision regarding their 2001 award may do so by submitting an appeal letter to the Commissioner of The Department of Economic and Community Development within fifteen (15) days of grant announcement.
Appeals of award decisions are restricted to errors of fact or procedure. Appeals in the areas of judgment regarding qualitative scoring will not be entertained. In the case of a successful appeal, funds will be reserved for the project from available or subsequent CDBG funds.

SECTION 7. AMENDMENTS TO THE PROGRAM STATEMENT
The State may amend the 2001 Program Statement from time to time in accordance with the same procedures required for the preparation and submission of the program statement. The amendment process will be guided by the State of Maine's Administrative Procedure Act.

THIS MATERIAL IS AVAILABLE IN ALTERNATIVE FORMAT

UPON REQUEST

BY CONTACTING:

AARON SHAPIRO, PROGRAM MANAGER

OFFICE OF COMMUNITY DEVELOPMENT

33 STONE STREET

59 STATE HOUSE STATION

AUGUSTA, MAINE 04333-0059

TELEPHONE (207) 287-8476

TTY (207) 287-2656

AMENDED:


April 2, 2001

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