---
kind: "section"
citation: "24 C.F.R. § 1003.701"
title: "24"
number: "1003.701"
heading: "Corrective and remedial action."
url: "https://uscodex.org/cfr/24/1003.701"
---

# §1003.701. Corrective and remedial action.

- (a) **General.** One or more corrective or remedial actions will be taken by HUD when, on the basis of the performance review, HUD determines that the grantee has not:
  - (1) Complied with the requirements of the Act, this part, and other applicable laws and regulations, including the environmental responsibilities assumed under [section 104(g)](/cfr/24/104.md?p=g) of title I of the Act;
  - (2) Carried out its activities substantially as described in its applications;
  - (3) Made substantial progress in carrying out its approved program; or
  - (4) **Shown the continuing capacity to carry out its approved activities in a timely manner.**
- (b) **Action.** The action taken by HUD will be designed, first, to prevent the continuance of the deficiency; second, to mitigate any adverse effects or consequences of the deficiency; and third, to prevent a recurrence of the same or similar deficiencies. The following actions may be taken singly or in combination, as appropriate for the circumstances:
  - (1) Request the grantee to submit progress schedules for completing approved activities or for complying with the requirements of this part;
  - (2) Issue a letter of warning advising the grantee of the deficiency (including environmental review deficiencies and housing assistance deficiencies), describing the corrective actions to be taken, establishing a date for corrective actions, and putting the grantee on notice that more serious actions will be taken if the deficiency is not corrected or is repeated;
  - (3) Advise the grantee to suspend, discontinue, or not incur costs for the affected activity;
  - (4) Advise the grantee to reprogram funds from affected activities to other eligible activities, provided that such action shall not be taken in connection with any substantial violation of [part 58](/cfr/24/part58.md) and provided that such reprogramming is subjected to the environmental review procedures of [part 58 of this title](/cfr/24/part58.md);
  - (5) Advise the grantee to reimburse the grantee's program account or line of credit in any amount improperly expended;
  - (6) Change the method of payment from a line of credit basis to a reimbursement basis; and/or
  - (7) **Suspend the line of credit until corrective actions are taken.**

## Notes

### Authority

Authority: 42 U.S.C. 3535(d) and 5301 et seq.

### Source

Source: 61 FR 40090, July 31, 1996, unless otherwise noted. Redesignated at 62 FR 12349, Mar. 12, 1998.