[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR905.120]

[Page 359-360]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 905_THE PUBLIC HOUSING CAPITAL FUND PROGRAM--Table of Contents
 
Sec. 905.120  Penalties for slow obligation or expenditure of CFP 
assistance.

    In addition to any other statutory, regulatory, or contractual 
sanctions available to HUD, the penalties for slow obligation or 
expenditure of CFP assistance will be applied as follows:
    (a) Obligation of amounts. (1) Except as provided in paragraph (b) 
of this section, a PHA must obligate any assistance received under this 
part not later than 24 months after, as applicable:
    (i) The date on which the funds become available to the PHA for 
obligation in the case of modernization; or
    (ii) The date on which the PHA accumulates adequate funds to 
undertake modernization, substantial rehabilitation, or new construction 
of units.
    (2) Notwithstanding paragraph (a)(1) of this section, any funds 
appropriated to a PHA for Fiscal Year 1997 or prior fiscal years shall 
be fully obligated by the PHA not later than September 30, 1999.
    (b) Exceptions to obligation requirement--(1) Extension before 
expiration of obligation period. A PHA may request and HUD may approve a 
longer timeframe or HUD may, by prior approval granted before the 
expiration of the

[[Page 360]]

time period in paragraph (a) of this section, extend the time period 
under paragraph (a) of this section for an additional period not to 
exceed 12 months, based on:
    (i) The size of the PHA;
    (ii) The complexity of the capital program of the PHA;
    (iii) Any limitation on the ability of the PHA to obligate the 
amounts allocated for the PHA from the Capital Fund in a timely manner 
as a result of state or local law; or
    (iv) Such other factors as HUD determines to be relevant.
    (2) Extension of obligation period. HUD may extend the time period 
under paragraph (a) of this section for a PHA, for such period as HUD 
determines to be necessary, if HUD determines that the failure of the 
agency to obligate assistance in a timely manner is attributable to:
    (i) Litigation;
    (ii) Obtaining approvals of the federal government or a state or 
local government;
    (iii) Complying with environmental assessment and abatement 
requirements;
    (iv) Relocating residents;
    (v) An event beyond the control of the PHA; or
    (vi) Any other reason established by HUD by notice published in the 
Federal Register.
    (3) Disregard of minimal unobligated amounts. HUD will disregard the 
requirements of paragraph (a) of this section with respect to any 
unobligated amounts made available to a PHA, to the extent that the 
total of such amounts does not exceed 10 percent of the original amount 
made available to the PHA.
    (c) Effect of failure to comply--(1) Prohibition of new assistance. 
A PHA will not be awarded CFP assistance for any month during any fiscal 
year in which the PHA has funds unobligated in violation of paragraph 
(a) or (b) of this section.
    (2) Withholding of assistance. During any fiscal year described in 
paragraph (c)(1) of this section, HUD will withhold all assistance that 
would otherwise be provided to the PHA. If the PHA cures its failure to 
comply during the year, it shall be provided with the share attributable 
to the months remaining in the year.
    (3) Redistribution. The total amount of any funds not provided PHAs 
by operation of this section shall be allocated for PHAs determined to 
be high-performing under the Public Housing Assessment System (at 24 CFR 
part 902) (or the applicable performance evaluation program for public 
housing).
    (d) Expenditure of amounts--(1) In general. A PHA must spend any 
assistance received under this part not later than four years (plus the 
period of any extension approved by HUD under paragraph (b) of this 
section) after the date on which funds become available to the PHA for 
obligation.
    (2) Enforcement. HUD will enforce the requirement of paragraph 
(d)(1) of this section through default remedies up to and including 
withdrawal of the CFP funding.
    (e) Right of recapture. Any obligation entered into by a PHA is 
subject to the HUD's right to recapture the obligated amounts for 
violation by the PHA of the requirements of this section.

[68 FR 45731, Aug. 1, 2003]