[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR572.225]

[Page 187-188]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 572_HOPE FOR HOMEOWNERSHIP OF SINGLE FAMILY HOMES PROGRAM (HOPE 3)--Table of Contents
 
                            Subpart C_Grants
 
Sec. 572.225  Grant agreements; corrective and remedial actions.

    (a) Terms and conditions. After HUD approves an application for a 
planning grant or an implementation grant under this part, it will enter 
into a grant agreement with the recipient setting forth the amount of 
the grant and applicable terms and conditions. The grant agreement will 
be effective for purposes of this part and funds may be disbursed under 
the Cash and Management Information (C/MI) System, described in Sec. 
572.230, after the grant agreement has been executed by the authorized 
official of the recipient and HUD. Among other things, the grant 
agreement will provide that the recipient agrees:
    (1) To carry out the program in accordance with the provisions of 
this part, applicable law, the approved application, and all other 
applicable requirements; and
    (2) To comply with such other terms and conditions, including 
recordkeeping and reports, as HUD may establish for the purposes of 
administering, monitoring, and evaluating the program in an effective 
and efficient manner.
    (b) Corrective and remedial actions. (1) HUD may withhold, withdraw, 
or recapture any portion of a grant, terminate the grant agreement, or 
take other appropriate action authorized under the grant agreement, if 
HUD determines that the recipient is failing to carry out the approved 
homeownership program in accordance with the terms of the approved 
application and this part, including failure to provide the 
contributions toward the match. Corrective or remedial actions that HUD 
may instruct the recipient to undertake include;
    (i) Preparing and following a schedule of actions or a management 
plan for properly completing the approved activities;
    (ii) Cancelling or revising the affected activities before expending 
grant funds for them, revising the grant budget as necessary, and 
substituting other eligible activities;
    (iii) Discontinuing draws under the C/MI System, and not incurring 
further costs for the affected activities;
    (iv) Reimbursing its HOPE 3 program account in the amount not used 
in accordance with this part and the grant agreement; and
    (v) In the case of implementation grants, making additional matching 
contributions in substitution for contributions not in compliance with 
this part and the grant agreement or submitting to HUD acceptable 
evidence that matching contributions sufficient to meet the total match 
required under this part and the grant agreement will be made, before 
additional draws are made.
    (2) If HUD determines that the recipient is not complying with the 
corrective or remedial actions agreed upon with the recipient, or as 
otherwise authorized in the grant agreement, HUD may implement the 
following additional corrective and remedial actions:
    (i) Changing the method of payment under the C/MI System to a 
reimbursement basis;
    (ii) Suspending the recipient's authority to make draws under the C/
MI System for affected activities;
    (iii) Reducing (deobligating) the grant in the amount affected by 
the performance deficiency, including, in the case of implementation 
grants, failure to furnish matching contributions in the required 
amount;
    (iv) Terminating the grant for all further activities and initiating 
close-out procedures;
    (v) Taking action against the recipient under 24 CFR part 24 and 
Executive Order 12549 (3 CFR, 1986 Comp., p. 189) with respect to future 
HOPE 3, HUD, or Federal grant awards; and
    (vi) Taking any other remedial action legally available.
    (3) If the amount of grant funds that has been disbursed under the 
C/MI System exceeds the amount finally determined by HUD to be 
authorized (including any authorized deobligation), the recipient must 
repay such excess amount to HUD, and will have no right to reclaim or 
reuse such excess amount.
    (c) Failure to complete and transfer a property to a homebuyer. If a 
property assisted under this part or credited as match is not completed 
and transferred to homebuyers as required under this

[[Page 188]]

part, whether voluntarily by the recipient or otherwise, grant 
expenditures on the property are considered ineligible, and HOPE 3 funds 
for acquisition and rehabilitation must be repaid to the program 
account. Preliminary costs (such as architectural and engineering, 
inspection, and appraisal fees) expended before acquisition are 
considered general program expenses and need not be repaid.
    (d) Failure to provide homeownership opportunities under an 
implementation grant. Failure to provide at least 70 percent of the 
number of homeownership opportunities proposed in the application for an 
implementation grant within the timeframe specified in Sec. 572.210(f) 
may result in remedial actions, as described in paragraph (b) of this 
section, being taken by HUD, including requiring repayment of all or 
part of the grant.