6400.1 REV-1

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CHAPTER 13. CORRECTIVE AND REMEDIAL ACTIONS AND SANCTIONS

13-1. CORRECTIVE AND REMEDIAL ACTIONS

A. At any time during the program year when the Urban Homesteading

Coordinator discovers or learns of a problem that appears to

require corrective or remedial action in a locality\'s urban

homesteading program, immediate action should be taken in

accordance with 24 CFR 590.21 or 590.31 and this Handbook.

Technical assistance should always be offered to the LUHA. In

cases of suspected fraud, the HUD Office of Inspector General

should be informed immediately for further investigation and

action.

B. The Urban Homesteading Coordinator shall document all findings

of non-compliance and file them in his/her file on the LUHA

along with documentation of all correspondence and efforts to

resolve the problem.

C. As an initial corrective action, except where there is clear and

convincing evidence of ongoing statutory non-compliance, a

letter of warning signed by the Field office Manager, or

designee, shall be sent advising the LUHA of its

deficiency(ies), and putting the LUHA on notice that more

serious corrective and remedial actions will be taken by HUD if

the LUHA does not correct the deficiency or if it is repeated.

The letter shall also specify what the corrective and remedial

actions will be. Copies shall be sent to the Director of the

Urban Homesteading Program, Rehabilitation Loans and

Homesteading Division, CPD, Headquarters. See also paragraph

13-2.D.

D. Letters issuing warnings and specifying corrective and remedial

actions should be, detailed and always include schedules for

implementation, and penalties for noncompliance, as permitted by

24 CFR 590.21 and 590.31.

13-2. PROCEDURES FOR IMPOSING SANCTIONS

A. When all reasonable efforts to correct problems have failed, or

in all cases where there is clear and convincing evidence of

ongoing statutory non-compliance, the Urban homesteading

coordinator shall recommend the imposition of sanctions on the

LUHA.

B. Sanctions should be matched to the severity of the problem and

may include one or more of the following;

1\. temporary suspension of an identified, defective activity,

e.g., suspension of property acquisition from the Section

312,

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13-1 3/90

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6400.1 REV-1

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FHA, VA and FmHA inventories, until corrective action has

been taken (see 24 CFR 590.31(b)).

2\. suspension of new, or cancellation of existing reservations

of Section 810 funds (24 CFR 590.21) or conditioning the

approval of the next annual request for program

participation if there is substantial evidence of a lack or

progress, noncompliance, or a lack of continuing capacity

(24 CFR 590.31(c)). In conditioning cases, HUD shall

specify the reasons for the conditional approval and the

actions necessary to remove the condition.

3\. repayment to the Section 810 fund if a LUHA has converted a

property for a non-homesteading use, received excessive

consideration for its conveyance, or failed to adequately

preserve and protect the property so that it no longer can

be homesteaded or will be affordable to a homesteader. The

LUHA may be required to repay to HUD either the amount of

compensation that the LUHA received or the amount of Section

810 funds expended for the property, as appropriate (24 CFR

590.31(e)).

4\. termination of the Urban Homesteading Program Participation

Agreement and close-out of the program, in cases off

continued substantial noncompliance (24 CFR 590.31(d)).

C. The Field Office Manager, or designee, shall sign all letters

notifying the LUHA of sanctions. Field Office Counsel shall

review and concur in all letters imposing sanctions under this

Paragraph 13-2. Copies shall be sent to the Director or the

Urban Homesteading Program, Rehabilitation Loans and

Homesteading Division, CPD, Headquarters.

D. Letters containing warnings and/or specifying sanctions shall

also specify remedial actions to be taken and acceptable

timeframes for actions to be corrected. In general, unless

there, is a danger that the LUHA will take further actions in

noncompliance with the Act in the interim, the LUHA should be

given 30 calendar days within which to present its point of view

and appeal the matter to the Field Office Manager if there is

disagreement. In cases where there is clear and convincing

evidence of ongoing statutory non-compliance, an interim

sanction, such as suspension, shall be imposed immediately to

maintain the status quo until a permanent sanction goes into

effect, or the noncompliance is resolved.

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3/90 13-2