24 C.F.R. § 578.13 – Remedial action.

(a) If HUD finds that the Continuum of Care for a geographic area does not meet the requirements of the Act or its implementing regulations, or that there is no Continuum for a geographic area, HUD may take remedial action to ensure fair distribution of grant funds within the geographic area. Such measures may include:
1. (1) Designating a replacement Continuum of Care for the geographic area;
2. (2) Designating a replacement collaborative applicant for the Continuum's geographic area; and
3. (3) Accepting applications from other eligible applicants within the Continuum's geographic area.
(b) HUD must provide a 30-day prior written notice to the Continuum and its collaborative applicant and give them an opportunity to respond.