[Code of Federal Regulations]

[Title 24, Volume 3]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR570.301]



[Page 63-64]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 

        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents

 

                      Subpart D_Entitlement Grants

 

Sec.  570.301  Activity locations and float-funding.



    The consolidated plan, action plan, and amendment submission 

requirements referred to in this section are those in 24 CFR part 91.

    (a) For activities for which the grantee has not yet decided on a 

specific location, such as when the grantee is allocating an amount of 

funds to be used for making loans or grants to businesses or for 

residential rehabilitation, the description in the action plan or any 

amendment shall identify who may apply for the assistance, the process 

by which the grantee expects to select who will receive the assistance 

(including selection criteria), and how much and under what terms the 

assistance will be provided, or in the case of a planned public facility 

or improvement, how it expects to determine its location.

    (b) Float-funded activities and guarantees. A recipient may use 

undisbursed funds in the line of credit and its CDBG program account 

that are budgeted in statements or action plans for one or more other 

activities that do not need the funds immediately, subject to the 

limitations described below. Such funds shall be referred to as the 

``float'' for purposes of this section and the action plan. Each 

activity carried out using the float must meet all of the same 

requirements that apply to CDBG-assisted activities generally, and must 

be expected to produce program income in an amount at least equal to the 

amount of the float so used. Whenever the recipient proposes to fund an 

activity with the float, it must include the activity in its action plan 

or amend the action plan for the current program year. For purposes of 

this section, an activity that uses such funds will be called a ``float-

funded activity.''

    (1) Each float-funded activity must be individually listed and 

described as such in the action plan.

    (2)(i) The expected time period between obligation of assistance for 

a float-funded activity and receipt of program income in an amount at 

least equal to the full amount drawn from the float to fund the activity 

may not exceed 2.5 years. An activity from



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which program income sufficient to recover the full amount of the float 

assistance is expected to be generated more than 2.5 years after 

obligation may not be funded from the float, but may be included in an 

action plan if it is funded from CDBG funds other than the float (e.g., 

grant funds or proceeds from an approved Section 108 loan guarantee).

    (ii) Any extension of the repayment period for a float-funded 

activity shall be considered to be a new float-funded activity for these 

purposes and may be implemented by the grantee only if the extension is 

made subject to the same limitations and requirements as apply to a new 

float-funded activity.

    (3) Unlike other projected program income, the full amount of income 

expected to be generated by a float-funded activity must be shown as a 

source of program income in the action plan containing the activity, 

whether or not some or all of the income is expected to be received in a 

future program year (in accordance with 24 CFR 91.220(g)(1)(ii)(D)).

    (4) The recipient must also clearly declare in the action plan that 

identifies the float-funded activity the recipient's commitment to 

undertake one of the following options:

    (i) Amend or delete activities in an amount equal to any default or 

failure to produce sufficient income in a timely manner. If the 

recipient makes this choice, it must include a description of the 

process it will use to select the activities to be amended or deleted 

and how it will involve citizens in that process; and it must amend the 

applicable statement(s) or action plan(s) showing those amendments or 

deletions promptly upon determining that the float-funded activity will 

not generate sufficient or timely program income;

    (ii) Obtain an irrevocable line of credit from a commercial lender 

for the full amount of the float-funded activity and describe the lender 

and terms of such line of credit in the action plan that identifies the 

float-funded activity. To qualify for this purpose, such line of credit 

must be unconditionally available to the recipient in the amount of any 

shortfall within 30 days of the date that the float-funded activity 

fails to generate the projected amount of program income on schedule;

    (iii) Transfer general local government funds in the full amount of 

any default or shortfall to the CDBG line of credit within 30 days of 

the float-funded activity's failure to generate the projected amount of 

the program income on schedule; or

    (iv) A method approved in writing by HUD for securing timely return 

of the amount of the float funding. Such method must ensure that funds 

are available to meet any default or shortfall within 30 days of the 

float-funded activity's failure to generate the projected amount of the 

program income on schedule.

    (5) When preparing an action plan for a year in which program income 

is expected to be received from a float-funded activity, and such 

program income has been shown in a prior statement or action plan, the 

current action plan shall identify the expected income and explain that 

the planned use of the income has already been described in prior 

statements or action plans, and shall identify the statements or action 

plans in which such descriptions may be found.



[60 FR 56913, Nov. 9, 1995]