FY 2021 American Rescue Plan – Health Center Construction and Capital Improvements (ARP-Capital) Frequently Asked Questions

If you have a question that is not addressed by these FAQs, by the ARP-Capital notice of funding opportunity (NOFO), or on the ARP-Capital technical assistance webpage, please submit it through the BPHC Contact Form. Select “Applicant" for the Requestor Type, “Capital" as the BPHC Category, and “ARP-Capital (C8E) Funding” as the BPHC Sub Category.

For general COVID-19 information, including additional related FAQs, see the Health Center Program COVID-19 Frequently Asked Questions.


Funding Purpose and Methodology

What is the purpose of ARP-Capital funding?

The purpose of the ARP-Capital one-time funding opportunity for health centers is to support construction, expansion, alteration, renovation, and other capital improvements to modify, enhance, and expand health care infrastructure.

(Added: 4/30/2021)

How much ARP-Capital funding is available?

HRSA will make approximately $1 billion available to health centers. Each health center will be able to apply up to a maximum amount per the following funding formula:

  • Base value of $500,000, plus
  • $11 per patient reported in the 2019 Uniform Data System.

(Added: 4/30/2021)

How many projects are allowed per application and what types of projects will be permitted?

You may submit one application for up to five total projects. You may propose the following project types:

  • Construction of a New Facility – creates a new building structure.
  • Construction/Expansion (C/E) of an Existing Facility – adds square footage to an existing facility.
  • Alteration/Renovation (A/R) of an Existing Facility – renovations/modifications to an existing facility without adding square footage.
  • Equipment Only – involves the acquisition of loose, moveable equipment not affixed to the building structure.

(Added: 4/30/2021)

How much time will be allowed to complete the proposed project(s)?

Each awardee will have three years from the award date to complete their project(s).

(Added: 4/30/2021)

Are Health Center Program look-alikes eligible for ARP-Capital funding?

No, look-alikes are not eligible to apply for ARP-Capital funding.

The American Rescue Plan Act (PDF - 681 KB) authorized funding for major capital activities (e.g., expanding and modernizing existing buildings or constructing new buildings) only for health centers funded under section 330 of the Public Health Service Act. ARP-Capital applicants are limited to existing health centers receiving Health Center Program operational support (under sections 330(e), (g), (h), and/or (i)) at the time of application and at the time of award.

Note that look-alikes may propose to use up to $500,000 of American Rescue Plan – Funding for Look-Alikes (ARP-LAL) (L2C) funds for minor alteration and renovation activities, consistent with the ARP-LAL NOFO.

(Added: 4/30/2021)

Allowed Uses of Funds

Do proposed activities using ARP-Capital funding need to relate directly to COVID-19?

ARP-Capital funding can be used to support a health center’s COVID-19 related infrastructure needs, as well as to address additional health care infrastructure needs related to the health center’s in-scope services.

(Added: 4/30/2021)

Can ARP-Capital funding be used to support in-progress activity at a site that previously received HRSA capital funding?

ARP-Capital funding may not supplant other resources (federal, state, local, or private funds), and proposed projects must be separate and distinct from any other existing construction-related projects. You may not propose a construction-related project or connected activity (e.g., installation of utilities, demolition) with a start date before the ARP-Capital award date of September 1, 2021.

(Added: 4/30/2021)

Can ARP-Capital funding be used to cover costs incurred prior to the award date?

ARP-Capital funding can potentially be used for pre-construction costs incurred dating back to January 31, 2020. However, construction-related activities associated with a project or connected activity (e.g., installation of utilities, demolition) that start before the award date are not allowable.

(Added: 4/30/2021)

Can ARP-Capital funding be used to support a project at an administrative-only site?

Health centers may only propose an administrative-only site for an Equipment Only project. Administrative-only sites cannot be proposed for all other construction-related project types (Construction of a New Facility, Construction/Expansion (C/E) of an Existing Facility or Alteration/Renovation (A/R) of an Existing Facility).

(Added: 4/30/2021)

Can ARP-Capital funds be used to purchase a modular unit?

Yes. The purchase and permanent installation of a modular unit is an allowable construction cost.

(Added: 4/30/2021)

Can ARP-Capital funding be used for operational costs?

No. You may not use ARP-Capital funding to support the provision of services and other operating costs (e.g., funding direct services, clinical full-time equivalents, costs for staff not directly related to the implementation of the proposed project within the project scope of work, rent, mortgage payments, refinanced credit facilities).

(Added: 4/30/2021)

Can a health center add services to its Health Center Program scope of project through this funding opportunity?

No. ARP-Capital award recipients cannot add services to their Health Center Program scope of project through this funding opportunity. Any change to services must be submitted through a separate change in scope request. See Policy Information Notice 2008-01: Defining Scope of Project and Policy for Requesting Changes (PDF - 224 KB).

(Added: 4/30/2021)


Are mobile vans and other vehicles an allowable cost?

You may use ARP-Capital funds to purchase new or replacement mobile medical vans. Other vehicle purchases (e.g., passenger vehicles) are unallowable.

(Added: 4/30/2021)

Are supplies an allowable cost?

No. Expendable supplies (e.g., office supplies, medical supplies, educational supplies) are unallowable. Supplies with a useful life of more than one year may be included as moveable equipment for this funding opportunity.

(Added: 4/30/2021)

What is considered moveable equipment?

Moveable equipment consists of non-expendable equipment items, with a useful life of more than one year, that can be readily shifted from place to place without requiring a change in the utilities or structural characteristics of the facility.

(Added: 4/30/2021)

Can ARP-Capital funds be used to lease moveable equipment?

No. ARP-Capital funds may not be used to lease moveable equipment.

(Added: 4/30/2021)

Can ARP-Capital funding be used to purchase a new electronic health record (EHR) system?

No. You may not use ARP-Capital funding for costs related to a new EHR system, to purchase an EHR, or to support ongoing EHR operations or maintenance. However, you may use the funding to purchase equipment associated with using an existing EHR, such as software, site licenses, laptops, and/or servers.

(Added: 4/30/2021)

Leasehold Improvements and Federal Interest

Can ARP-Capital funding be used at a leased site?

Yes. You may use ARP-Capital funding at a leased site. However, you may not use ARP-Capital funds to address facility needs that are part of the terms of the lease (i.e., the obligation of the lessor). If you propose a project for a leased facility, you must attach a signed Landlord Letter of Consent (LLOC) from the facility owner in the Other Requirements for Sites form. See a sample LLOC (PDF - 61 KB).

(Added: 4/30/2021)

Is a Notice of Federal Interest (NFI) required?

Depending on the scope of work, the owner of the property may be required to consent and file an NFI. Your Notice of Award will indicate if an NFI is applicable.

If an NFI is required, the award recipient must submit the NFI after the award of the grant, but prior to initiating physical work on the project.

For more information regarding the filing of an NFI, see the Federal Interest in Real Property FAQs (PDF - 500 KB). You can also view a sample NFI (PDF - 297 KB).

(Added: 4/30/2021)

What if there is already a HRSA NFI on the property?

NFIs must specify the grant under which the capital funding was provided. NFIs that cite other grant programs cannot be substituted. Existing NFIs may be amended to add in the new grant and project description along with the existing grant information upon issuance of a Notice of Award.

(Added: 4/30/2021)

Are leasehold improvements allowable?

Yes. For more information about leasehold improvements, see the Leasehold Improvements section in the NOFO.

(Added: 4/30/2021)

Date Last Reviewed:  April 2021