HUD Allows Key Deadline Flexibilities for CSP Requests

In response to advocacy by LeadingAge, HUD has allowed key deadline flexibilities for COVID-19 Supplemental Payment (CSP) requests for capital cost reimbursements due to COVID-19. HUD announced the change in a 20-question CSP FAQ document; HUD also released a draft version of the CSP request form.

The FAQ document about COVID-19 Supplemental Payments (CSPs), including the need for key deadline flexibility to allow housing providers more time to make COVID-19 related capital improvements to properties, was released on Oct 7.

The current CSP request round features critical new reimbursable cost categories, including expenditures related to internet infrastructure installation, back-up generator installation, and ventilation system updates. However, initially, HUD's guidance for completing purchases and requesting reimbursement for COVID-19 costs included an Oct. 31 deadline to complete purchases for reimbursement - an impossible timeline for projects trying to line up internet or generator installation projects.

In response to strong advocacy by LeadingAge, HUD has agreed to offer an additional 5-month period within which to complete capital cost expenditures and installation, giving housing providers until March 31, 2022 to complete eligible capital projects. Providers making use of the extended deadline will need to submit supporting documentation by April 8 demonstrating that the project was completed and may receive reimbursement payments later than HUD's late-February timeline for request payouts. Operating costs reimbursement requests still need to adhere to the Oct. 31 expenditure deadline.

Additional Time Provided for Capital Project Expenses and Completion

HUD's FAQ document states: "HUD is allowing additional flexibility on the timing of delivery and installation of eligible capital items. Where the owner is unable to find a vendor who can complete delivery by Oct. 31 HUD will allow inclusion of amounts for Eligible Capital Expenses in CSP requests in the following circumstances:

  • Completed Payment, Incomplete Installation. Payment has been completed AND delivery/installation date has been specified by the vendor to occur not later than March 31, 2022; OR
  • Incomplete Payment and Installation, but Committed Contract Signed. Payment has not been disbursed to the vendor, but legal liability to complete the purchase has been established. This may be accomplished through a legally binding purchase order dually signed by the owner and vendor, or similar legal contract. Agreements must include delivery/installation no later than March 31, 2022."

Owners using the extra time are required to submit documentation to HUD demonstrating that the purchase and project were completed by March 31, 2022; the supporting documentation should be submitted to HUD by April 8, 2022. The deadline flexibility does not apply to eligible expenses under the Operating Cost (Category A) section of HUD's CSP Notice.

Funding Reimbursable Projects through Reserves and Residual Receipts

After LeadingAge requested information from HUD about how housing communities can cover expenses until HUD can offer reimbursement, HUD responded:

"CSP funds may be used to reimburse HUD-approved owner advances to the property (recorded in property financial records as repayments due owner) or address other project debt directly associated with expenses for which the CSP was requested. This includes amounts borrowed with prior HUD approval from Reserve for Replacement accounts. HUD will approve loans against Reserve for Replacement  accounts only up to the Minimum Expected Funding level for the property. Expenditures using HUD Residual Receipt account withdrawals cannot be reimbursed by CSP, but Residual Receipt funds may be used in conjunction with CSP reimbursements to fully address the project costs."

In addition, HUD's FAQs state: "HUD will use best efforts to process these requests on a timeline that allows owners to complete eligible purchases by Oct. 31, 2021. Owners should note on their HUD 9250 and in the subject line of their email submitting the request to HUD that this is a "CSP Reserve Release Request."

HUD has released a draft version of their CSP request form, which providers can utilize to calculate their minimum expected payment. HUD expects to make the finalized form available in the next week. 

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