PART 30—CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT Authority: 12 U.S.C. 1701q-1, 1703, 1723i, 1735f-14, and 1735f-15; 15 U.S.C. 1717a; 28 U.S.C. 1 note and 2461 note; 42 U.S.C. 1437z-1 and 3535(d). Source: 61 FR 50215, Sept. 24, 1996, unless otherwise noted. Editorial Note: Nomenclature changes to part 30 appear at 87 FR 8197, Feb. 14, 2022. Subpart A—General § 30.1 Purpose and scope. Unless provided for elsewhere in this title or under separate authority, this part implements HUD's civil money penalty provisions. The procedural rules for hearings under this part are those applicable to hearings in accordance with the Administrative Procedure Act, as set forth in 24 CFR part 26. [74 FR 2751, Jan. 15, 2009] § 30.5 Effective dates. (a) Under § 30.20, a civil money penalty may be imposed for violations occurring on or after May 22, 1991. (b) Maximum penalty. (c) Under § 30.40, concerning loan guarantees for Indian housing, a civil money penalty may be imposed for violations occurring on or after October 28, 1992. (d) Under § 30.65, a civil money penalty may be imposed for violations occurring on or after the following dates: (1) September 6, 1996, for owners of more than four residential dwellings; or (2) December 6, 1996, for owners of one to four residential dwellings. (e) Under § 30.68, a civil money penalty may be imposed for violations, or for those parts of continuing violations, occurring on or after January 7, 2002. [61 FR 50215, Sept. 24, 1996, as amended at 66 FR 63441, Dec. 6, 2001; 82 FR 24524, May 30, 2017; 88 FR 9748, Feb. 15, 2023] § 30.10 Definitions. Since this part is primarily procedural, terms not defined in this section shall have the meanings given them in relevant program regulations. Comprehensive definitions are in 24 CFR part 4 (HUD Reform Act). The terms ALJ, Department, HUD, Secretary Ability to pay. Agent. Dealer. Knowing Knowingly. knowing knowingly Material or Materially. Person. Respondent. Sponsored third-party originato [61 FR 50215, Sept. 24, 1996, as amended at 74 FR 2751, Jan. 15, 2009; 77 FR 51468, Aug. 24, 2012; 82 FR 24524, May 30, 2017] § 30.15 Application of other remedies. A civil money penalty may be imposed in addition to other administrative sanctions or any other civil remedy or criminal penalty. Subpart B—Violations § 30.20 Ethical violations by HUD employees. (a) General. (b) Maximum penalty. [61 FR 50215, Sept. 24, 1996, as amended at 72 FR 5588, Feb. 6, 2007; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.25 Violations by applicants for assistance. (a) General. (b) Maximum penalty. [61 FR 50215, Sept. 24, 1996, as amended at 72 FR 5588, Feb. 6, 2007; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.35 Mortgagees and lenders. (a) General. (1) Violates the provisions listed in 12 U.S.C. 1735f-14(b); (2) Fails to comply with the requirements of § 201.27(a) of this title regarding approval and supervision of dealers; (3) Approves a dealer that has been suspended, debarred, or otherwise denied participation in HUD's programs; (4) Makes a payment that is prohibited under § 202.5(l). (5) Fails to remit, or timely remit, mortgage insurance premiums, loan insurance charges, or late charges or interest penalties; (6) Permits loan documents for an FHA insured loan to be signed in blank by its agents or any other party to the loan transaction unless expressly approved by the Secretary; (7) Fails to follow the mortgage assignment procedures set forth in § 203.664 of this title or in §§ 207.255 through 207.258b of this title. (8) Fails to timely submit documents that are complete and accurate in connection with a conveyance of a property or a claim for insurance benefits, in accordance with § 203.365, § 203.366, or § 203.368, or a claim for insurance benefits in accordance with § 206.127 of this title; (9) Fails to: (i) Process requests for formal release of liability under an FHA insured mortgage; (ii) Obtain a credit report, issued not more than 90 days prior to approval of a person as a borrower, as to the person's creditworthiness to assume an FHA insured mortgage; (iii) Timely submit proper notification of a change in mortgagor or mortgagee as required by § 203.431 of this title; (iv) Timely submit proper notification of mortgage insurance termination as required by § 203.318 of this title; (v) Timely submit proper notification of a change in mortgage servicing as required by § 203.502 of this title; or (vi) Report all delinquent mortgages to HUD, as required by § 203.330 of this title; (10) Fails to service FHA insured mortgages, in accordance with the requirements of 24 CFR parts 201, 203, 206, and 235; (11) Fails to fund loans that it originated, or otherwise misuses loan proceeds; (12) Fails to comply with the conditions relating to the assignment or pledge of mortgages; (13) Fails to comply with the provisions of the Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq. et seq. et seq. (14) Fails to engage in loss mitigation as provided in § 203.605 of this title. (b) Continuing violation. (c)(1) Amount of penalty. (2) Maximum penalty for failing to engage in loss mitigation. [61 FR 50215, Sept. 24, 1996, as amended at 63 FR 9742, Feb. 26, 1998; 68 FR 12788, Mar. 17, 2003; 70 FR 21578, Apr. 26, 2005; 72 FR 5588, Feb. 6, 2007; 74 FR 2751, Jan. 15, 2009; 74 FR 14725, Apr. 1, 2009; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 82 FR 7117, Jan. 19, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.36 Other participants in FHA programs. (a) General. (1) Sellers; (2) Borrowers; (3) Closing agents; (4) Title companies; (5) Real estate agents; (6) Mortgage brokers; (7) Appraisers; (8) Sponsored third-party originators; (9) Dealers; (10) Consultants; (11) Contractors; (12) Subcontractors; and (13) Inspectors. (b) Knowing and material violations. (1) Submits false information to the Secretary in connection with any mortgage insured under the National Housing Act (12 U.S.C. 1701 et seq. (2) Falsely certifies to the Secretary or submits a false certification by another person or entity to the Secretary in connection with any mortgage insured under the National Housing Act or any loan that is covered by a contract of insurance under title I of the National Housing Act; or (3) Is a loan dealer and fails to submit to the Secretary information which is required by regulations or directives in connection with any loan that is covered by a contract of insurance under title I of the National Housing Act. (c) Amount of penalty. [65 FR 9087, Feb. 23, 2000, as amended at 72 FR 5588, Feb. 6, 2007; 77 FR 51468, Aug. 24, 2012; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.40 Loan guarantees for Indian housing. (a) General. (b) Continuing violation. (c) Amount of penalty. [61 FR 50215, Sept. 24, 1996, as amended at 65 FR 9087, Feb. 23, 2000; 68 FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.45 Multifamily and section 202 or 811 mortgagors. (a) Definitions. (1) Agent employed to manage the property that has an identity of interest identity of interest agent. (i) That has management responsibility for a project; (ii) In which the ownership entity, including its general partner or partners (if applicable) and its officers or directors (if applicable), has an ownership interest; and (iii) Over which the ownership entity exerts effective control. (2) Effective control. (3) Entity. (4) Multifamily property. et seq. (5) Ownership interest. (6) Section 202 or 811 property. (b) Violation of agreement General. (i) Has agreed in writing, as a condition of a transfer of physical assets, a flexible subsidy loan, a capital improvement loan, a modification of the mortgage terms, or a workout agreement, to use nonproject income to make cash contributions for payments due under the note and mortgage, for payments to the reserve for replacements, to restore the project to good physical condition, or to pay other project liabilities; and (ii) Knowingly and materially fails to comply with any of the commitments listed in paragraph (b)(1)(i) of this section. (2) Maximum penalty. (c) Other violations. (1) Any mortgagor of a multifamily property; (2) Any general partner of a partnership mortgagor of such property; (3) Any officer or director of a corporate mortgagor; (4) Any agent employed to manage the property that has an identity of interest with the mortgagor, with the general partner of a partnership mortgagor, or with any officer or director of a corporate mortgagor of such property; or (5) Any member of a limited liability company that is the mortgagor of such property or is the general partner of a limited partnership mortgagor or is a partner of a general partnership mortgagor. (d) Acceptable management. (1) Fiscal management in accordance with HUD regulations and requirements; (2) Handling of vacancies and tenanting in accordance with HUD regulations and requirements; (3) Handling of rent collection in accordance with HUD regulations and requirements; (4) Maintenance in accordance with HUD regulations and requirements; (5) Compliance with HUD regulations and requirements on tenant organization; and (6) Any other matters that pertain to proper management in accordance with HUD regulations and requirements. (e) Civil money penalty. (f) Section 202 or 811 projects. (g) Maximum penalty. (h) Payment of penalty. (i) Exceptions. [66 FR 63441, Dec. 6, 2001, as amended at 68 FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007; 74 FR 2751, Jan. 15, 2009; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.50 GNMA issuers and custodians. (a) General. (b) Continuing violation. (c) Amount of penalty. [61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.60 Dealers or sponsored third-party originators. (a) General. (1) Falsifying information on an application for dealer approval or reapproval submitted to a lender; (2) Falsifying statements on a HUD credit application, improvement contract, note, security instrument, completion certificate, or other loan document; (3) Failing to sign a credit application if the dealer or sponsored third-party originator assisted the borrower in completing the application; (4) Falsely certifying to a lender that the loan proceeds have been or will be spent on eligible improvements; (5) Falsely certifying to a lender that the property improvements have been completed; (6) Falsely certifying that a borrower has not been given or promised any cash payment, rebate, cash bonus, or anything of more than nominal value as an inducement to enter into a loan transaction; (7) Making a false representation to a lender with respect to the creditworthiness of a borrower or the eligibility of the improvements for which a loan is sought. (b) Continuing violation. (c) Amount of penalty. [61 FR 50215, Sept. 24, 1996, as amended at 68 FR 12788, Mar. 17, 2003; 72 FR 5588, Feb. 6, 2007; 77 FR 51467, Aug. 24, 2012; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024;90 FR 24747, June 12, 2025] § 30.65 Failure to disclose lead-based paint hazards. (a) General. (b) Amount of penalty. [65 FR 50593, Aug. 18, 2000, as amended at 76 FR 36851, June 22, 2011; 79 FR 35042, June 19, 2014; 81 FR 38935, June 15, 2016; 82 FR 24524, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9453, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24420, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] § 30.68 Section 8 owners. (a) Definitions. Agent employed to manage the property that has an identity of interest identity of interest agent. (1) That has management responsibility for a project; (2) In which the ownership entity, including its general partner or partners (if applicable), has an ownership interest; and (3) Over which the ownership entity exerts effective control. Effective control. Entity. Ownership interest. e.g. e.g., (b) General. (1) Failure to provide decent, safe, and sanitary housing pursuant to section 8 of the United States Housing Act of 1937 and 24 CFR 5.703; or (2) Knowing or willful submission of false, fictitious, or fraudulent statements or requests for housing assistance payments to the Secretary or to any department or agency of the United States. (c) Maximum penalty. (d) Payment of penalty. (e) Exceptions. [66 FR 63442, Dec. 6, 2001, as amended at 74 FR 2751, Jan. 15, 2009; 78 FR 4059, Jan. 18, 2013; 81 FR 38935, June 15, 2016; 82 FR 24525, May 30, 2017; 83 FR 32793, July 16, 2018; 84 FR 9454, Mar. 15, 2019; 85 FR 13044, Mar. 6, 2020; 86 FR 14373, Mar. 16, 2021; 87 FR 24421, Apr. 26, 2022; 88 FR 9748, Feb. 15, 2023; 89 FR 13616, Feb. 23, 2024; 90 FR 24747, June 12, 2025] Subpart C—Procedures § 30.70 Prepenalty notice. (a) Prior to determining whether to issue a complaint under § 30.85, the official designated in subpart B of this part, or his or her designee (or the chairperson of the Mortgagee Review Board, or his or her designee, in actions under § 30.35), shall issue a written notice to the respondent. This prepenalty notice shall include the following: (1) That HUD is considering seeking a civil money penalty; (2) The specific violations alleged; (3) The maximum civil money penalty that may be imposed; (4) The opportunity to reply in writing to the designated program official within 30 days after receipt of the notice; (5) That failure to respond within the 30-day period may result in issuance of a complaint under § 30.85 without consideration of any information that the respondent may wish to provide; and (6) That if a complaint is issued under § 30.85, the respondent may request a hearing before an administrative law judge in accordance with § 30.95. (b) Obligation to preserve documents. [74 FR 2751, Jan. 15, 2009] § 30.75 Response to prepenalty notice. (a) The response shall be in a format prescribed in the prepenalty notice. The response shall address the factors set forth in § 30.80 and include any arguments opposing the imposition of a civil money penalty that the respondent may wish to present. (b) In any case where respondent seeks to raise ability to pay as an affirmative defense or argument in mitigation, the respondent shall provide documentary evidence as part of its response. [74 FR 2751, Jan. 15, 2009] § 30.80 Factors in determining amount of civil money penalty. After determining that a respondent has committed a violation as described in subpart B of this part that subjects the respondent to liability under this part, the officials designated in subpart B of this part shall consider the following factors to determine the amount of penalty to seek against a respondent, if any: (a) The gravity of the offense; (b) Any history of prior offenses; (c) The ability to pay the penalty, which ability shall be presumed unless specifically raised as an affirmative defense or mitigating factor by the respondent; (d) The injury to the public; (e) Any benefits received by the violator; (f) The extent of potential benefit to other persons; (g) Deterrence of future violations; (h) The degree of the violator's culpability; and (i) Such other matters as justice may require. (j) In addition to the above factors, with respect to violations under §§ 30.45, 30.55, 30.60, and 30.68, the Assistant Secretary for Housing—Federal Housing Commissioner, or his or her designee, or the Assistant Secretary for Public and Indian Housing, or his or her designee, shall also consider: (1) Any injury to tenants; and/or (2) Any injury to lot owners. (k) HUD may consider the factors listed in paragraphs (a) through (k) of this section to determine the appropriateness of imposing a penalty under § 30.35(c)(2); however, HUD cannot change the amount of the penalty under § 30.35(c)(2). [74 FR 2751, Jan. 15, 2009, as amended at 82 FR 24525, May 30, 2017] § 30.85 Complaint. (a) General. (b) If a determination is made to seek a civil money penalty, government counsel shall issue a complaint to the respondent on behalf of the officials listed at subpart B of this part or the Mortgagee Review Board for violations under § 30.35. The complaint shall be served upon respondent and simultaneously filed with the Office of Hearings and Appeals, and shall state the following: (1) The factual basis for the decision to seek a penalty; (2) The applicable civil money penalty statute; (3) The amount of penalty sought; (4) The right to submit a response in writing, within 15 days of receipt of the complaint, requesting a hearing on any material fact in the complaint, or on the appropriateness of the penalty sought; (5) The address to which a response must be sent; (6) That the failure to submit a response may result in the imposition of the penalty in the amount sought. (c) A copy of this part and of 24 CFR part 26, subpart B, shall be included with the complaint. (d) Service of the complaint. [61 FR 50215, Sept. 24, 1996, as amended at 74 FR 2752, Jan. 15, 2009; 90 FR 24747, June 12, 2025] § 30.90 Response to the complaint. (a) Request for a hearing. (b) Answer. (c) Filing with the administrative law judges. [61 FR 50215, Sept. 24, 1996, as amended at 74 FR 2752, Jan. 15, 2009; 74 FR 7313, Feb. 17, 2009; 74 FR 4635, Jan. 26, 2009; 78 FR 4060, Jan. 18, 2013] § 30.95 Hearings. Hearings under this part shall be conducted in accordance with the procedures applicable to hearings in accordance with the Administrative Procedure Act, set forth in 24 CFR part 26. [74 FR 2752, Jan. 15, 2009] § 30.100 Settlement of a civil money penalty action. The officials listed at subpart B of this part, or their designees (or the Mortgagee Review Board, or designee, for violations under § 30.35), are authorized to enter into settlement agreements resolving civil money penalty actions that may be brought under part 30. [74 FR 2752, Jan. 15, 2009]