UPPER STORY CONVERSION

Description –

This program funds activities limited to existing buildings to either rehabilitate un-occupiable units or convert existing spaces into new units. All spaces must be vacant and un-occupiable at the time of application and for a period of at least five (5) years.

Applications for funding are competitive and must be received prior to the deadline. Incomplete applications will not be reviewed.

The maximum award per project is $600,00; $550,000 for project and administrative costs and an optional $50,000 to assist with Green Streets activities. Projects choosing the optional Green Streets funding should plan to complete a design consultation prior to application. To do so, contact Jeff Geerts at (515) 348-6211 or Jeff.Geerts@IowaEDA.com .

All incorporated cities and counties in the State, except those designated as HUD entitlement areas, are eligible to apply for and receive funds under this program.

To be eligible for funding, no less than 51% of the rental units in an assisted rental project shall be occupied by persons or households whose incomes are at or below 80% of the area median income limits (LMI) by household size as defined by the U.S. Department of Housing and Urban Development. Current income levels can be found on the IEDA website: https://www.iowaeda.com/cdbg/management-guide/

The services of an architect to prepare preliminary cost estimates and renderings is required as part of the application. These costs cannot be reimbursed by CDBG funds.

2 CFR 200 Audit Requirements –

CDBG contracts must be subject to audit. Federal Code (2 CFR 200) requires that recipients theta exceed $750,000 or more in federal funds within a fiscal year must have a single or program specific audit. When budgeting for CDNG funds, applicants should be aware of these audit requirements:

• For recipients of $750,000 or more in federal funds received from more than one source of federal funding, an organization-wide audit must be conducted in accordance with deferral requirements outlined in 2 CFR 200.514.
• For recipients of $750,000 or more in federal funds received from a single source, a project audit, targeting only transactions dealing specifically with the project, may be performed in lieu of an organization-wide audit.

Communities should consult with their accountants regarding the applicability of an audit and audit requirements.

Audit costs are a CDBG-eligible expense. Organization-wide audits can be paid with CDBG funds proportional to the amount of all other funds included in the audit. The total cost of a project audit can be paid with CDBG funds.

Uniform Relocation Review Requirements –

For projects that include acquisition and relocation, all recipients given the authority to acquire property are required to follow the guidelines in HUD Handbook 1378 – Tenant Assistance, Relocation and Real Property Acquisition. Cost estimates for the proposed project should reflect compliance with these requirements. For information, call IEDA (515-348-6207)

Environmental Review and Project Initiation –

No HUD funds or non-HUD funds may be committed to the project until the applicant has secured environmental approval from the State, as provided in HUD regulation 24 CFR Part 58. In addition, pending environmental approval and pursuant to 24 CFR Part 58.22(a), no grant recipient or participant in the development process, including contractors or sub-contractors, may undertake activity that may limit the choice of reasonable alternatives. Such choice limiting actions include, real property acquisition, conducting a competitive sealed bid process for the project, leasing, rehabilitation, repair, demolition, conversion, and new construction.

Due to this activity being a conversion program and not a housing rehabilitation program of 1-4 units, it is not exempt from the following requirements: Asbestos, Lead, Floodplain Management, Above Ground Storage Tanks, and Noise. All laws and Authorities governing these requirements must be adhered to.

Historical Preservation Review requirements:

Federally funded activities are subject to the review requirements of Section 106 of the National Historic Preservation Act. The goal of the review process is to identify historic properties, both above and below the ground potentially affected by the undertaking, assess the effects of the undertaking, and seek ways to avoid, minimize or mitigate any adverse effects on historic properties.

The review process involves review by IEDA and possible consultation with various agencies, groups, and individuals, including the State Historical Preservation Office (SHPO), located in the Department of Cultural Affairs. Although consultation is not required prior to a CDBG award, if the project includes a property that may have historical significance, it is a good idea to contact IEDA early in the project development. For information regarding Section 106 review and compliance, you may call IEDA at 515-348-6202.

Additional Requirements –

Additional program requirements for the CDBG Upper Story Housing Conversion program can be found here: https://www.iowaeda.com/cdbg/housing-rehabilitation