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)

Can health centers apply for less than the maximum amount of ARP-Capital funding available?

Yes. Health centers can apply for an amount that is less than the maximum amount of ARP-Capital funding that was communicated to them by HRSA. Requested funding should be consistent with the scope and funding needs for the project(s) proposed within the ARP-Capital application.

(Added: 5/18/2021)

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)

What should health centers do if they are not able to define all the details of the proposed project(s) requested in their ARP-Capital application?

If you are not able to finalize all the details for your proposed ARP-Capital application (e.g., the details suggested in the NOFO for the project description, site information, project management, and project timeline), provide as much information as possible and submit the application by the deadline of June 24, 2021. HRSA will review all submitted applications and will condition ARP-Capital awards as needed for any items that require additional details. HRSA does not require that you hire an architect or design professional to develop and submit the information required for the ARP-Capital application.

(Added: 6/7/2021)

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)

Do the Davis-Bacon Act requirements apply to capital improvement activities using C8E funds?

No. The Davis-Bacon Act does not apply to this funding. However, you must follow state and local requirements for prevailing wages and fair labor policies.

(Added: 6/24/2021)

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 of September 1, 2021?

Physical construction activities (e.g., installation of utilities, demolition) that occur prior to September 1, 2021, are unallowable. Other pre-construction activities, such as design development, budgeting, the hiring of an architect, surveys, and testing, may be allowable expenses if they occurred on or after January 31, 2020. You must submit a separate prior approval request for such pre-award costs after the ARP-Capital award has been issued.

(Updated: 6/7/2021)

Although American Rescue Plan Funding for Health Centers (H8F) and ARP-Capital (C8E) funds cannot be used for the same project at a single site address, are there scenarios in which a health center may use funds from both awards at the same site?

Health center applicants are allowed to propose the use of H8F and C8E funds at the same site, as long as the proposed construction-related activities or projects supported under each award are separate and distinct. Each project must have its own construction contract, deliverables, and milestones. H8F and C8E funds cannot be combined to support the same construction-related activities or project, nor can C8E funds be combined with any other HRSA construction grant funding to support the same project.

(Added: 6/7/2021)

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)

If a health center plans to use New Market Tax Credits (NMTC) with their ARP-Capital project, what information will HRSA need to assess the NMTC financing?

If a health center plans to use NMTC with their ARP-Capital project, they must submit a prior approval request. Health centers should contact their assigned Grants Management Specialist for instructions. The request will likely consist of the following documentation:

  • Detailed description of the financing for the ARP-Capital project, including the proposed NMTC arrangement and other associated financing resources, such as bridge financing.
  • Description of the benefits of the proposed NMTC financing for the project (e.g., comparison of NMTC loan rates and associated cost savings compared to other loans or bond rates available to the health center).
  • Description of the financial risks associated with the proposed NMTC financing and corresponding mitigation strategies to protect the health center’s and HRSA’s interest in the associated property.
  • Assurance that the project approved by HRSA will be completed as proposed, in accordance with federal interest requirements and the approved timeline.
  • Letter of commitment from the Community Development Entity.
  • Proposed schedule of cash draws (dates and amounts) from the appropriate Payment Management System subaccount.

Please note: If there is a requirement for HRSA to subordinate federal interest and/or grant permission to transfer property to a Limited Liability Company, this information should also be submitted along with the request for prior approval.

(Added: 6/7/2021)


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:  June 2021