(a) Mandatory rejection. The request of an owner of an eligible project will not be considered for a Restructuring Plan if the owner is debarred or suspended under 2 CFR part 2424.
(b) Discretion to reject. HUD may also decide not to accept a request for a Restructuring Plan if:
(1) An affiliate is debarred or suspended under 2 CFR part 2424; or
(2) HUD notifies the owner that HUD is engaged in a pending suspension, debarment or other enforcement action against an owner or affiliate, and the grounds for the pending action are included in Sec. 401.403(b)(2)(ii).
(c) Exception for sale. This section does not apply if a sale or transfer of the property is proposed in accordance with Sec. 401.480.
(d) Notice to tenants. The PAE or HUD will give notice to tenants of a rejection in accordance with Sec. Sec. 401.500(f)(2), 401.501, and 401.502. [65 FR 15485, Mar. 22, 2000, as amended at 72 FR 66038, Nov. 26, 2007; 72 FR 73496, Dec. 27, 2007]