Section 108 Regulations

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Sec. 570.708 Sanctions.

1. Non-State assisted public entities. The performance review procedures described in subpart O of this part apply to all public entities receiving guaranteed loan funds other than State-assisted public entities. Performance deficiencies in the use of guaranteed loan funds made available to such public entities (or program income derived therefrom) or violations of the contract entered into pursuant to Sec. 570.705(b)(1) may result in the imposition of a sanction authorized pursuant to Sec. 570.900(b)(7) against pledged CDBG grants. In addition, upon a finding by HUD that the public entity has failed to comply substantially with any provision of the Act with respect to either the pledged grants or the guaranteed loan funds or program income, HUD may take action against the pledged grants as provided in Sec. 570.913 and/or may take action as provided in the contract for loan guarantee assistance.
   
2. State-assisted public entities. Performance deficiencies in the use of guaranteed loan funds (or program income derived therefrom) or violations of the contract entered into pursuant to Sec. 570.705(b)(1) may result in an action authorized pursuant to Sec. 570.495 or Sec. 570.496. In addition, upon a finding by HUD that the State or public entity has failed to comply substantially with any provision of the Act with respect to the pledged CDBG nonentitlement funds, the guaranteed loan funds, or program income, HUD may take action against the pledged funds as provided in Sec. 570.496 and/or may take action as provided in the contract.