Section R: Grant Amendments

In this section...

Link to the Commonly used forms:

SF-424
Certification of Consistency with the Consolidated Plan

This section describes how to handle the inevitable changes that occur in SHP projects during the term of the grant. It describes the procedure for requesting a grant agreement amendment to reflect a change to the original project. The grant agreement, like a contract, establishes the rights and responsibilities of HUD and the grantee.

Note that grantees cannot request an amendment to their grant before the grant agreement has been signed.

Program Changes

Significant and minor changes are often necessary during the life of an SHP grant. Whenever it is necessary to make changes, the HUD field office needs to be involved - either to be informed of the change or to approve the change, depending on its seriousness.

Significant Changes

Significant changes substantially affect implementation of the project and are departures from the initial application. The following are examples of significant changes:

  • Change in the grantee or project sponsor;
  • Change in the project site;
  • Additions or deletions of eligible SHP activities;
  • Change in the category or number of participants to be served; and
  • Shift of more than 10 percent of funds from one approved SHP eligible activity to another.

Significant changes may be implemented after HUD and the grantee have executed a grant agreement amendment. Such changes may be made at any time during the grant term. However, only those significant changes in a written grant amendment that has been signed by HUD and the grantee before the competition’s application deadline will be considered when awarding a renewal grant. Also, HUD will not agree to sign a grant agreement with an entity that did not apply for a grant so grantees should not request a change of grantee during the competition’s technical submission phase.

Minor Changes

Minor changes are departures from the initial application that do not substantially affect implementation of the grant. An example of a minor change is a shift of less than 10 percent of SHP funds from one approved SHP activity to another over the life of the grant, including the initial grant term and all extensions and renewals.

Minor changes do not require HUD approval, and no amendment to the grant agreement is necessary. However, the grantee must fully document any changes to its project.

Minor changes do not require prior HUD approval and no amendment to the grant agreement is necessary. However, the grantee must fully document any changes to its project. The documentation must be available to the field office during on-site reviews or, for remote monitoring, sent to the field office if requested.

Return to Top

Requesting an Amendment

When a significant change is contemplated, a grantee should prepare a written request to the field office.

The request should indicate what the change is and the circumstances causing the need for the change. The grantee should also attach revised application or technical submission exhibits reflecting the proposed change. In addition, certain changes require additional items to process the request for a change. The most common are described next.

Return to Top

Guidance on Common Significant Changes

Change in Grantee

When the grantee seeks to be released from its obligations under the grant, several documents are needed:

  • a letter from the current grantee indicating its reasons for requesting a change of grantee;
  • a letter from the proposed substitute organization indicating its willingness to become the new grantee and to accept all the responsibilities according to the terms of the current grant;
  • revised charts from Exhibit 2 of the Continuum of Care Homeless application, if determined by the Field Office; and
  • documentation of private nonprofit status if the substitute is a nonprofit organization.

Grantee Name Change

When the grantee organization changes its name, or merges with another entity, the grantee must submit a revised SF-424 and legal documentation confirming the name change or merger. A mere change of name by the grantee should not require an amendment of the grant agreement. Neither should a merger in which the grantee is the surviving organization. However, a “merger” which is accomplished through the sale of two grantees assets will require prior HUD approval and an amendment.

Change in Project Site

For a change in the project site, the grantee must provide evidence of site control and zoning where appropriate; revised Project Summary Information from Exhibit 2 of the application; and a revised Certification of Consistency with the Consolidated Plan , if applicable. An environmental review must also be completed according to current requirements.

See Section H Site Control and Environmental Review for more information.
Change in Population Served

When changing the population being served and/or where the homeless population is coming from (e.g., outreach, referral source), the grantee needs to submit a letter explaining the change. The letter should clearly describe the original population (number being served, population served, where the population is coming from), proposed revision and reasons for the change. The grantee should also submit a revised Targeted Subpopulations chart from Exhibit 2.

Change in Number Being Served

For a change in the number of homeless persons being served, the grantee needs to submit a letter explaining the change. The letter should clearly describe the original population (number being served; population served; where the population is coming from; the number of beds; and the number of bedrooms), proposed revision and reasons for the change.

If the change relates to an increase or decrease in the level of supportive services the project provides to homeless participants, the grantee must either maintain the same level of supportive services to the modified number of participants, or it must reduce the scope of the project to be in line with the reduction in supportive services that will be provided. That is, the project must continue to provide the same level of supportive services that it committed to in its original application or, it must propose an overall reduction in scope and proportionate reduction in amount of SHP funds requested. It is critical that the grantee provide evidence that the same level of services will be provided to the residents of the project.

As described in Section D Eligible Activities, beginning with the 2006 competition, if actual rents have increased substantially from the time of the initial application to the time of the first renewal, the grantee or project sponsor may need – and is allowed – to reduce the number of units that can be supported by the project since the overall level of SHP funding cannot be increased. Grantees should note that if a reduction in the number of units leads to a reduction in the number of participants, this may result in a corresponding decrease in the other funded budget categories. Grantees may proportionately reduce or eliminate any other elements of the project and the SHP request. However, be aware that this project, as well as all projects, must meet all project threshold requirements as identified in the NOFA. HUD intends to continue this policy in the future.

Shift in SHP Funds of More Than 10 Percent

When a grantee seeks to shift funds in an approved budget that cumulatively exceeds 10 percent of the total allocation for an eligible activity (e.g., Acquisition, Supportive Services, etc.) such changes require Headquarters concurrence and a grant amendment to be executed by the field office. Although the terms “Budget Line Item,” “Budget Activity,” and “Budget Category” have been used interchangeably in the McKinney Act, SHP regulations, and guidance memos, this guidance refers specifically to a shift of more than 10 percent of funds from one approved SHP eligible activity to another over the lifetime of the grant. The threshold that triggers the requirement for advance HUD approval is a change between eligible activities (e.g. between Supportive Services and Leasing) – not changes within activities (e.g., between mental health treatment and day care).

This rule does not prohibit grantees from making significant changes in eligible activities that could affect the originally approved project goals. Although HUD Field Offices will not review every such change, grantees should inform their field offices of changes in eligible activities to prevent them from being found ineligible and consequently disallowed through field office monitoring.

Return to Top

Criterion for Approving an Amendment

Field Office CPD directors are authorized to approve significant changes in projects and execute grant agreement amendments. However, the SHP regulations specify that approval for a significant change is contingent upon the application ranking remaining high enough after an amendment is approved to have been competitively selected for funding in the year the application was selected (see 24 CFR 583.405 ). This means that Field Offices must contact HUD Headquarters for this determination because competitive selections are made in Headquarters

Examples of changes to a project that are likely to result in a project of lower quality are:

  • Housing or services are of lower quality or quantity than initially proposed;
  • New housing or service provider is less experienced than the initial provider;
  • Innovative features are eliminated;
  • Site is moved to an area of less need;
  • Resources from other public or private sources are reduced; or
  • Cost-effectiveness is reduced.

Return to Top

Previous Section | Table of Contents | Next Section