[Code of Federal Regulations]
[Title 45, Volume 4]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR1309.21]

[Page 244-245]
 
                        TITLE 45--PUBLIC WELFARE
 
CHAPTER XIII--OFFICE OF HUMAN DEVELOPMENT SERVICES, DEPARTMENT OF HEALTH 
                           AND HUMAN SERVICES
 
PART 1309--HEAD START FACILITIES PURCHASE--Table of Contents
 
                Subpart C--Protection of Federal Interest
 
Sec. 1309.21  Recording of Federal interest and other protection of Federal interest.

    (a) The Federal Government has an interest in all real property and 
equipment purchased with grant funds for use as a Head Start facility. 
The responsible HHS official may agree to subordinate the Federal 
interest in such property to that of a lender which finances the 
purchase of the property subject to the conditions set forth in 
paragraph (f) of this section.
    (b) Facilities acquired with grant funds may not be mortgaged or 
used as collateral, or sold or otherwise transferred to another party, 
without the written permission of the responsible HHS official.
    (c) Use of the facility for other than the purpose for which the 
facility was funded, without the express written approval of the 
responsible HHS official, is prohibited.
    (d) Immediately upon purchasing a facility with grant funds, or 
receiving permission to use funds for a previously purchased facility, 
the grantee shall record a Notice of Federal Interest in the appropriate 
official records for the jurisdiction in which the facility is located. 
The Notice shall include the following information:
    (1) The date of the award of grant funds for the purchase of the 
property to be used as a Head Start facility, and the address and legal 
description of the property to be purchased;
    (2) That the grant incorporated conditions which include restriction 
on the use of the property and provide for a Federal interest in the 
property;
    (3) That the property may not be used for any purpose inconsistent 
with that authorized by the Head Start Act and applicable regulations;
    (4) That the property may not be mortgaged or used as collateral, 
sold or otherwise transferred to another party, without the written 
permission of the responsible HHS official;
    (5) That these grant conditions and requirements cannot be altered 
or nullified through a transfer of ownership; and
    (6) The name (including signature) and title of the person who 
completed the Notice for the grantee agency, and the date of the Notice.
    (e) Grantees must meet all of the requirements in 45 CFR parts 74 or 
92 pertaining to the purchase and disposition of real property, or the 
use and disposal of equipment, as appropriate.
    (f) In subordinating its interest in a facility purchased with grant 
funds, the responsible HHS official does not waive application of 
paragraph (d) of this section and Sec. 1309.22. A written agreement by 
the responsible HHS official to subordinate the Federal interest must 
provide:
    (1)(i) The lender shall notify the Office of the Regional 
Administrator, Administration for Children and Families, the Office of 
the Commissioner, Administration on Children, Youth and Families, 
Washington, D.C., and the Office of the General Counsel, Department of 
Health and Human Services, Washington, DC, or their successor agencies, 
immediately, both telephonically and in writing of any default by the 
Head Start grantee;
    (ii) Written notice of default must be sent by registered mail 
return receipt requested; and,
    (iii) The lender will not foreclose on the property until at least 
60 days after the required notice by the lender has been sent.
    (2) Such notice will include:
    (i) The full names, addresses, and telephone numbers of the lender 
and the Head Start grantee;
    (ii) The following statement prominently displayed at the top of the 
first page of the notice: ``The Federal Interest in certain real 
property or equipment used for the Head Start Program may be at risk. 
Immediately give this

[[Page 245]]

notice to the appropriate government official'';
    (iii) The date and nature of the default and the manner in which the 
default may be cured; and
    (iv) In the event that the lender will be exercising its remedy of 
foreclosure or other remedies, the date or expected date of the 
foreclosure or other remedies.
    (3) Head Start grantees which purchase facilities with respect to 
which the responsible HHS official has subordinated the Federal Interest 
to that of the lender must keep the lender informed of the current 
addresses and telephone numbers of the agencies to which the lender is 
obligated under paragraph (b) of this section to give notice in the 
event of a default.