On expiry of its agreement a subrecipient must hand back CDBG cash and receivables, and property over $25,000 must keep meeting a national objective for five years after expiration or be paid for

cdbg.disposition_and_transfer.subrecipient_reversion_of_assets_and_five_years_of_national_objective_use · v1.0.0

The subrecipient-side counterpart to the recipient-side change-of-use rule, and it runs on a different clock from a different event. The written agreement must specify that UPON ITS EXPIRATION the subrecipient transfers to the recipient any CDBG funds on hand and any accounts receivable attributable to the use of CDBG funds. It must also ensure that any real property UNDER THE SUBRECIPIENT'S CONTROL acquired or improved in whole or in part with CDBG funds - INCLUDING CDBG FUNDS PROVIDED IN THE FORM OF A LOAN - in excess of $25,000 is either used to meet one of the national objectives in 570.208 UNTIL FIVE YEARS AFTER EXPIRATION OF THE AGREEMENT, or for such longer period as the recipient determines appropriate; or else the subrecipient pays the recipient an amount equal to the current market value of the property less any portion of that value attributable to non-CDBG expenditures for acquisition or improvement, and THAT PAYMENT IS PROGRAM INCOME to the recipient. No payment is required after the five-year period ends. Two things to hold onto. The clock runs from AGREEMENT EXPIRATION, not from closeout of the grant, which is the recipient-side trigger - the same property can carry two overlapping periods ending on different dates. And the recipient may extend the period in the agreement, so the operative term is whatever the written agreement says, never the regulatory floor read alone.

Confidence

high

Effective from

2015-11-12

Consequence model

agency finding with cure

Last reviewed

2026-08-22