42 U.S.C. § 12753 — Program enforcement and penalties for noncompliance

If the Secretary finds, after giving the jurisdiction reasonable notice and a chance for a hearing, that a participating jurisdiction has substantially failed to follow any rule in this part — including rules that must apply for the full period required under section 12745(a)(1)(E) — the Secretary must act. First, the Secretary must reduce the jurisdiction's HOME Investment Trust Fund credit line by the exact amount of any spending that broke the rules. This reduction stays in place until the Secretary is satisfied the jurisdiction is no longer breaking the rules. On top of that mandatory reduction, the Secretary may also do any of the following: (1) block the jurisdiction from withdrawing HOME funds for the activities affected by the violation; (2) limit the jurisdiction to activities that follow one or more of the model programs made available under section 12743; (3) remove the jurisdiction from future allocations or reallocations of funds under this part; or (4) reduce future payments to the jurisdiction by the amount it spent in violation of the rules.