24 CFR 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., maintenance, capital improvement, occupancy, or financial management), to a single program or group of programs, or to a single project or a group of projects. For example, HUD may select, or participate in the selection of, an AME to assume management responsibility for a specific project, a group of projects in a geographical area, or a specific operational area, while permitting the PHA to retain responsibility for all programs, operational areas, and projects not so designated.