[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR880.507]



[Page 54-55]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 

 

PART 880_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 

CONSTRUCTION--Table of Contents

 

             Subpart E_Housing Assistance Payments Contract

 

Sec.  880.507  Default by PHA and/or owner (private-owner/PHA projects).



    (a) Rights of Owner if PHA defaults under Agreement or Contract. The 

ACC, the Agreement and the Contract will provide that, in the event of 

failure of the PHA to comply with the Agreement or Contract with the 

owner, the owner will have the right, if he is not in default, to demand 

that HUD investigate. HUD will first give the PHA a reasonable 

opportunity to take corrective action. If HUD determines that a 

substantial default exists, HUD will assume the PHA's rights and 

obligations under the Agreement or Contract and meet the obligations of 

the PHA under the Agreement or Contract including the obligations to 

enter into the Contract.

    (b) Rights of HUD if PHA defaults under ACC. The ACC will provide 

that, if the PHA fails to comply with any of its obligations, HUD may 

determine that there is a substantial default and require the PHA to 

assign to HUD all of its rights and interests under the Contract; 

however, HUD will continue to pay annual contributions in accordance 

with the terms of the ACC and the Contract. Before determining that a 

PHA is in substantial default, HUD will give the PHA a reasonable 

opportunity to take corrective action.

    (c) Rights of PHA and HUD if Owner defaults under Contract. (1) The 

Contract will provide that if the PHA determines that the owner is in 

default under the Contract, the PHA will notify the owner and lender, 

with a copy to HUD, (i) of the actions required to be taken to cure the 

default, (ii) of the remedies to be applied by the PHA including 

specific performance under the



[[Page 55]]



Contract, abatement of housing assistance payments and recovery of 

overpayments, where appropriate, and (iii) that if he fails to cure the 

default, the PHA has the right to terminate the Contract or to take 

other corrective action, in its discretion or as directed by HUD.

    (2) If the PHA is the lender, the Contract will also provide that 

HUD has an independent right to determine whether the owner is in 

default and to take corrective action and apply appropriate remedies, 

except that HUD will not have the right to terminate the Contract 

without proceeding in accordance with paragraph (b) of this section.