Any funds remaining in NSP2 grantees’ Lines of Credit after September 30, 2015 will be recaptured by Treasury. The American Reinvestment and Recovery Act of 2009 (ARRA) which authorized the NSP2, required all funds to be expended by the end of FY 2013. HUD obtained an extension for NSP funds because program income must be expended before Line of Credit funds. This means that any funds left in Lines of Credit for NSP2 grantees will be automatically recaptured on October 1, 2015.
NSP Grantees should keep in mind:
- This Recapture of funds only applies to NSP2 grantees. NSP1 and NSP3 lines of credit will not be impacted.
- The First In First Out rule still applies. In other words, Program Income on hand must be expended first before Line of Credit funds can be expended.
- Program Income on Hand will not be recaptured, only any remaining Funds in NSP2 Grantees’ Lines of Credit.
- Because ARRA requires these funds to be recaptured, HUD does not have the ability to waive or provide exceptions to any NSP2 grantees.
- Grantees that have concerns for meeting this deadline should seek advice for ways to expend these funds from the Field Office or request TA from the HUD Exchange.
- One tool that grantees may wish to consider is a Revolving Fund. Please consult your Field Office for assistance.
- Be on the lookout for a series of webinars on strategies to spend down your Line of Credit.