(a) General. One or more corrective or remedial actions will be taken by HUD when, on the basis of a performance review, HUD determines that the DHHL has not:

1. (1) Complied with the requirements of the Act and this part and other applicable laws and regulations, including the environmental responsibilities assumed under § 1006.350;
2. (2) Carried out its activities substantially as described in its housing plan;
3. (3) Made substantial progress in carrying out its program and achieving its quantifiable goals as described in its housing plan; or
4. (4) Shown the continuing capacity to carry out its approved activities in a timely manner.

(b) Action. The action taken by HUD will be designed, first, to prevent the continuance of the deficiency; second, to mitigate any adverse effects or consequences of the deficiency; and third, to prevent a recurrence of the same or similar deficiencies. The following actions may be taken singly or in combination, as appropriate for the circumstances:

1. (1) Issue a letter of warning advising the DHHL of the performance problem(s), describing the corrective actions that HUD believes should be taken, establishing a completion date for corrective actions, and notifying the DHHL that more serious actions may be taken if the performance problem(s) is not corrected or is repeated;
2. (2) Request the DHHL to submit progress schedules for completing activities or complying with the requirements of the Act and this part;
3. (3) Recommend that the DHHL suspend, discontinue, or not incur costs for the affected activity;
4. (4) Recommend that the DHHL redirect funds from affected activities to other eligible activities;
5. (5) Recommend that the DHHL reimburse its program account or line of credit under the Act in the amount improperly expended and reprogram the use of the funds; and
6. (6) Recommend that the DHHL obtain appropriate technical assistance using existing grant funds or other available resources to overcome the performance problem(s).