Grant funds returned by a State will be reallocated as follows:

(a) Eligible recipients. HUD will make the funds available:

(1) To metropolitan cities and urban counties in the State that were not allocated funds under §576.3 because the amount they would have been allocated did not meet the minimum requirement under §576.3(b)(2);

(2) If funds remain, to county governments in the State other than urban counties;

(3) Then, if funds remain, to metropolitan cities and urban counties in the State that were allocated funds under §576.3.

(b) Notification of availability. HUD will notify eligible recipients of the availability of the funds by a notification letter or Federal Register notice, which will specify how the awards of funds will be made.

(c) Application requirements. Within 45 days after the date of notification, the eligible recipient must submit to HUD:

(1) A substantial amendment to its approved consolidated plan in accordance with 24 CFR part 91; or

(2) If the eligible recipient does not have an approved consolidated plan, an abbreviated consolidated plan that meets the requirements in the Federal Register notice or notification letter from HUD.

(d) Restrictions that apply to reallocated amounts. The same requirements that apply to grant funds allocated under §576.3 apply to grant funds reallocated under this section.