---
kind: "section"
citation: "24 C.F.R. § 907.3"
title: "24"
number: "907.3"
heading: "Bases for substantial default."
url: "https://uscodex.org/cfr/24/907.3"
---

# §907.3. Bases for substantial default.

- (a) **Violations of laws and agreements.** A PHA may be declared in substantial default when the PHA:
  - (1) Violates a federal statute;
  - (2) Violates a federal regulation; or
  - (3) **Violates one or more terms of an ACC, or other covenants or conditions to which the PHA is subject.**
- (b) **Failure to act.** In addition to the violations listed in [paragraph (a)](#a) of this section, in the case where a PHA is designated as a troubled performer under PHAS, the PHA shall be in substantial default if the PHA:
  - (1) Fails to execute an MOA;
  - (2) Fails to comply with the terms of an MOA; or
  - (3) Fails to show substantial improvement, as provided in [§ 902.75(d)](/cfr/24/902.75.md?p=d) of this chapter.

## Notes

### Authority

Authority: 42 U.S.C. 1437d(j), 42 U.S.C. 3535(d).

### Source

Source: 76 FR 10162, Feb. 23, 2011, unless otherwise noted.