PART 907—SUBSTANTIAL DEFAULT BY A PUBLIC HOUSING AGENCY Authority: 42 U.S.C. 1437d(j), 42 U.S.C. 3535(d). Source: 76 FR 10162, Feb. 23, 2011, unless otherwise noted. § 907.1 Purpose and scope. This part provides the criteria and procedures for determining and declaring substantial default by a public housing agency (PHA) and the actions available to HUD to address and remedy substantial default by a PHA. Nothing in this part shall limit the discretion of HUD to take any action available under the provisions of section 6(j)(3)(A) of the 1937 Act (42 U.S.C. 1437d(j)(3)(A)), any applicable annual contributions contract (ACC), or any other law or regulation that may authorize HUD to take actions against a PHA that is in substantial default. § 907.3 Bases for substantial default. (a) Violations of laws and agreements. (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. (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) of this chapter. § 907.5 Procedures for declaring substantial default. (a) Notification of finding of substantial default. (1) Identify the specific statute, regulation, covenants, conditions, or agreements of which the PHA is determined to be in violation; (2) Identify the specific events, occurrences, or conditions that constitute the violation; (3) Specify the time period, which shall be a period of 10 but not more than 30 days, during which the PHA shall have an opportunity to demonstrate that the determination or finding is not substantively accurate, if required; (4) If determined by HUD to be appropriate, provide for an opportunity to cure and specify the time period for the cure; and (5) Notify the PHA that, absent a satisfactory response in accordance with paragraph (b) of this section, action shall be taken as determined by HUD to be appropriate. (b) Receipt of notification and response. (1) The description of events, occurrences, or conditions described in the written determination of substantial default is in error, or establish that the events, occurrences, or conditions described in the written determination of substantial default do not constitute noncompliance with the statute, regulation, covenants, conditions, or agreements that are cited in the notification under paragraph (a) of this section; or (2) If any opportunity to cure is provided, that the violations have been cured or will be cured in the time period specified by HUD. (c) Waiver of notification and the opportunity to respond. (d) Emergency situations. (1) HUD determines that conditions exist that pose an imminent threat to the life, health, or safety of public housing residents or residents of the surrounding neighborhood; or (2) The events or conditions precipitating the default are determined to be the result of criminal or fraudulent activity. § 907.7 Remedies for substantial default. (a) Except as provided in § 907.7(c), upon determining that events have occurred or conditions exist that constitute a substantial default, HUD may: (1) Take any action provided for in section 6(j)(3) of the Act (42 U.S.C. 1437d(j)(3)); (2) Provide technical assistance for existing PHA management staff; or (3) Provide assistance deemed necessary, in the discretion of HUD, to remedy emergency conditions. (b) HUD may take any of the actions described in paragraph (a) of this section sequentially or simultaneously in any combination. (c) In the case of a substantial default by a troubled PHA pursuant to § 902.83(b): (1) For a PHA with 1,250 or more units, HUD shall petition for the appointment of a receiver pursuant to section 6(j)(3)(A)(ii) of the 1937 Act (42 U.S.C. 1437d(j)(3)(A)(ii)); or (2) For a PHA with fewer than 1,250 units, HUD shall either petition for the appointment of a receiver pursuant to section 6(j)(3)(A)(ii) of the Act (42 U.S.C. 1437d(j)(3)(A)(ii)), or take possession of the PHA (including all or part of any project or program of the PHA) pursuant to section 6(j)(3)(A)(iv) of the 1937 Act (42 U.S.C. 1437d(j)(3)(A)(iv)), and appoint, on a competitive or noncompetitive basis, an individual or entity as an administrative receiver to assume the responsibilities of HUD for the administration of all or part of the PHA (including all or part of any project or program of the PHA). (d) To the extent feasible, while a PHA is operating under any of the actions that may have been taken by HUD, all services to residents will continue uninterrupted. (e) HUD may limit remedies under this part to one or more of a PHA's specific operational areas ( e.g.,