HUD Section 4

Capacity Building Grant

As part of our ongoing commitment to community development and the development and preservation of affordable housing in underserved communities, LISC Hampton Roads is pleased to announce an open call for Section 4 Capacity Building grant funding.

The Department of Housing and Urban Development (HUD) Section 4 Capacity Building Program is exclusively for Community Development Corporations (CDCs) and Community Housing Development Organizations (CHDOs) to carry out affordable housing and community development activities that benefit low-and-moderate-income families and persons. CDCs and CHDOs must be organized under Federal, State, or local law to engage in community development activities (which may include housing and economic development activities) primarily within an identified geographic area of operation. CDCs and CHDOs must have a tax exception ruling from the IRS under 501 (c)(3) or (4) of the Internal Revenue Code.

Qualifications

Only eligible entities -Community Development Corporations (CDCs) and Community Housing Development Organizations (CHDOs) are eligible for HUD Section 4 funds. This checklist contains a series of questions that will help you evaluate whether your organization qualifies as a CDC.

1. A CDC is a nonprofit organization that undertakes eligible Section 4 Capacity Building Program activities as defined here, and that meets these qualifications:

a. Is organized under Federal, State or local law to engage in community development activities (which may include housing and economic development activities) primarily within an identified geographic area of operation.

b. Is governed by a board of directors composed of community residents, business, and civic leaders.

c. Has as its primary purpose the improvement of the physical, economic, or social environment of its geographic area of operation by addressing one or more critical problems of the area, with particular attention to the needs of persons of low income.

d. Is neither controlled by, nor under the direction of, individuals or entities seeking to derive profit or gain from the organization.

e. Has a tax exemption ruling from the Internal Revenue Service under section 501(c) (3) or (4) of the Internal Revenue Code of 1986 (26 CFR 1.501(c)(3)-1);

f. Has standards of financial accountability that conform to 2 CFR 200.302, "Financial Management" and 2 CFR 200.303, "Internal Controls”.

g. Is not an agency or instrumentality of a State or local government; and

h. For urban areas, “community” may be a neighborhood or neighborhoods, town, village, county or multi-county area (but not the entire State or territory).

2. An organization that does not qualify under paragraph (a) through (h) may also be determined to qualify as an eligible entity if:

a. It is a Small Business Administration (SBA) approved Section 501 State Development Company - or an SBA Certified Section 503 company - under the Small Business Development Act of 1958, as amended (P.L. 85-699); or

b. The recipient demonstrates to the satisfaction of HUD, through the provision of information regarding the organization's charter and by-laws, that the organization is sufficiently similar in purpose, function, and scope to those entities qualifying under paragraphs (a) through (h) of this definition, or

c. It is a State of locally chartered organization; however, the State or local government may not have the right to appoint more than one-third of the board membership of the organization's governing body and no more than one-third of the board members may be public officials or employees of the State or local government entity chartering the organization. Board members appointed by the State or local government may no appoint the remaining two-thirds of the board members.

Requirements

CDCs and CHDOs applying and/or receiving HUD S4 capacity building grants from LISC must submit the following documentation and comply with specific program and federal requirements. This list is for intake and general information purposes. Sub-recipients may be subject to additional documentation or program requirements determined by LISC and HUD.

• W-9 Form and banking information.
• Tax Determination Letter. Letter must indicate 501c(3) or (4) status.
• Qualify as a CDC or CHDO. Only eligible entities -Community Development Corporations (CDCs) and Community Housing Development Organizations (CHDOs) are eligible for Section 4 funds. See the qualifications section.
• Audited Financial Statements for the last two Fiscal Years. Internal financials and 990 Forms may be accepted in the first year of funding. Additional funding may be contingent upon completing a financial audit, review, or concrete plans for an audit.
• If subject to an A-133 audit, submission of A-133 Audits to the federal Audit Clearing House is required. Organizations expending over $750,000 of federal funds during a fiscal year are subject to an A-133 audit. Organizations subject to an A-133 audit must submit the package to the Federal Audit Clearinghouse within nine months after the close of their fiscal year or 30 days after receiving it from the auditors. https://facweb.census.gov/uploadpdf.aspx.
• Unique Entity Identifier (UEI). The Federal government requires that all entities applying for Federal grants and cooperative agreements have a Unique Entity Identifier (UEI). Obtaining a UEI number is free. www.sam.gov.
• Active registration on the System for Award Management (SAM). Organizations applying for HUD S4 capacity building grants must: 1) Be registered in SAM. 2) Maintain an active SAM registration during the LISC grant term. SAM registrations must be renewed on an annual basis. www.sam.gov.
• Do not have debt subject to offset. As evidenced in www.sam.gov. Additionally, LISC may ask for copies of the CDC's recent Form 941 for proof of payment of federal tax obligations. LISC will also review this information at any moment during the grant period.
• It is not excluded, debarred, or suspended from doing business with the Federal government. As evidenced in www.sam.gov.
• An accounting system that maintains records that identify the source and application of funds by grant/award (PA by PA). Project cost accounting system able to segregate grant revenues and expenditures by grant. This is different from having separate bank accounts. Organizations must track their HUD S4 grants separately in their accounting systems. They should be able to produce general ledgers, balance sheets, and other accounting records that demonstrate that grant expenses are segregated for each federal grant.
• Time and Effort Reporting System that meets federal requirements. CDCs must have employee timekeeping systems that record and certify how much time the employee spends on each funded project. Time records should identify how much time the employee spends on work under the CDC's HUD Section 4 grant. Reasonably reflect the total activity for which the employee is compensated, not exceeding 100% of paid activities, encompass federally assisted and all other activities compensated on an integrated basis, and must be signed or certified electronically by the employee and their supervisor. Documentation must include actual compensation (i.e., payroll records).
• Written Personnel Policies and Procedures. The CDC should have a written Personnel Manual updated or reviewed every 2-3 years.
• Written Procurement Policies and Procedures. The CDC should have Procurement Procedures that meet federal regulations.
• Written Financial & Accounting Procedures. The CDC must have a Finance or Accounting Manual updated or reviewed every 2-3 years.
• Board of Directors Roster. The roster must include length of time on board, subject area/expertise (especially as it relates to activities in the proposal), gender and ethnicity, and the committees they serve on.

Program Priority Areas

Program funds may be used for one or more of the following program priority areas, specifically to the benefit of low-income residents:

• Increased organizational capacity of Community Development Corporations.
• Housing rehabilitation, preservation and development.
• Economic development, creative placemaking, and equitable revitalization of key neighborhoods and commercial districts

LISC Hampton Roads will also consider programs and projects that support community revitalization efforts through the promotion of neighborhood health, safety, equity, climate resiliency and inclusion.

Eligible Costs

Section 4 funds can support the following:

• CDC staff salaries
• Consultants
• Stipends or interns
• Allowable program costs
• CDC staff or board training
• Indirect costs or overhead

Ineligible Costs

Section 4 funds CANNOT support the following:

• Lobbying or advocacy work intended to influence policy
• Fundraising by staff or consultants
• Food and entertainment
• Conferences attended by anyone outside of CDC staff
• Acquisition, construction/rehab, minor home repair
• Marketing and communications for the organization

Evaluation and Selection

LISC Hampton Roads staff will evaluate proposals based on the following criteria:

Grant Amount

The LISC Hampton average award is expected to be $75,000. Requests should align with proposed activities and stay within the recommended award range. Assuming correct documentation submission, award letters are expected to be sent by the beginning of June 2024.

Deadline Timeline

Proposal submission deadline: To be determined.

Expected Notice of Award: To be determined.

Grant performance period: To be determined.

General Questions

• Is there a maximum or suggested limit to the amount of salary we can request through this grant? LISC Hampton Roads’ average award is expected to be $75,000.00.  Requests should be reasonable compared to the proposed activities in the proposal.  It is recommended that requests stay within the award range listed.
• What is the 'grant period'? Grant periods will begin after both the Applicant recommended for an award and LISC Hampton Roads sign the grant agreement.  Grant periods will generally run 12 – 18 months from the date of full execution.
• Can CDCs with current LISC Hampton Roads Capacity Building grant apply for this RFP? Yes, current grantees may apply for funding under this RFP.  Applicants that have a current grant are expected to be in good standing which means adhering to all administrative, programmatic, and fiscal contractual requirements.
• We have a federally approved indirect cost rate. Can we apply this rate to our request when developing the budget? Yes, LISC Hampton Roads will accept rates approved under an Applicant’s federally negotiated indirect cost rate agreement (NICRA) or allow Applicants who do not have a NICRA to charge 10% for indirects against Total Modified Direct Costs.  Applicants that have NICRAs will be asked to submit a copy if recommended for an award.
• When will the grant be approved and funded? Assuming all the correct documentation is submitted, we anticipate sending the award letters out by the beginning of June 2024.
• Do you have prioritized geographies? Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg, and the counties of Gloucester, Isle of Wight, James City, Mathews, Southampton, Surry, and York.
• What is included in the narrative section of the proposal? Organizational background, project/program description, project budget, real estate development description (if applicable), and HUD Section 4 Outcomes.

Privacy

Information provided through the application process is the responsibility of each applicant. Applications submitted to the portal remain confidential to the general public and any fellow applicants. Applicants will not hold LISC, its affiliates, members, partners, and staff liable for any losses, damages, costs, or expenses, of any kind relating to the use or the adequacy, accuracy, or completeness of any information loaded in the form. See LISC's Privacy Policy for more details.

About LISC Hampton Roads

We are the Hampton Roads office of Local Initiatives Support Corporation (LISC), a national nonprofit that provides financing and support for community development around the country.  As one of 38 local offices, LISC Hampton Roads works with local government, community development corporations and other nonprofits to revitalize neighborhoods and catalyze opportunity. 

LISC is one of the country's largest social enterprises supporting projects and programs to revitalize underserved communities and bring greater economic opportunity to residents. We invest in affordable housing, quality schools, safer streets, growing businesses and programs that connect people with financial opportunity. In response to the pandemic, we are delivering resources and expertise to support communities, businesses and people. Learn more here.