with the Field Office Director or his designee having jurisdiction.

(b) If the existence of a discriminatory practice is denied by the person, firm or other entity against which a complaint has been made, the Field Office Director or his designee shall conduct such inquiries and hearings as may be deemed appropriate for the purpose of ascertaining the facts.

(c) If it is found that the person, firm or other entity against which a complaint has been made has not engaged in a discriminatory practice, the parties concerned shall be so notified.

(d) If it is found that there has been a violation of the regulations in this subpart, the person, firm or other entity in violation shall be requested to attend a conference for the purpose of discussing the matter. Failure or refusal to attend such a conference shall be proper basis for the application of sanctions.

(e) The conference arranged for discussing a violation shall be conducted in an informal manner and shall have as its primary objective the elimination of the discriminatory practice. If such practice is eliminated and satisfactory assurances are received that the person, firm or other entity in violation will not engage in such practices in the future, the parties concerned shall be so notified.

§ 200.345 Sanctions.

Failure or refusal to eliminate a discriminatory practice or to give satisfactory assurances of future compliance with the requirements of this subpart shall be proper basis for applying sanctions. In the case of discrimination involving lending practices, the sanction may include the withdrawal of the lender's approval as a mortgagee. In other cases the sanctions may take the form of placing the offender's name on an ineligible list. Applications for mortgage insurance shall be rejected as ineligible if any person, firm or other entity included on the ineligible list is identified in any manner with the proposed transaction.

§ 200.350 Appeals from findings of Field Office Directors.

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Upon written application, a plainant or a person, firm or other entity against which a complaint has been filed under the regulations may apply to the Commissioner for a rehearing or a readjudication of the action taken by the Field Office Director. Upon receiving such application, the Commissioner may designate a representative to conduct a hearing and to make a report of findings. The Commissioner may, after a review of the record on appeal, reverse an action taken by the Field Office Director.

§ 200.355 Reinstatement.

Reinstatement of restricted persons, firms or other entities shall be within the discretion of the Commissioner and under such conditions as he may prescribe.

Subpart J-Equal Employment Opportunity

§ 200.400 Purpose.

The purpose of this subpart is to assist in achieving the aims of Part III of Executive Order 11246 and the relevant regulations of the Secretary of Labor and the Secretary of Housing and Urban Development.

§ 200.405 Notice to public.

Participants in insurance programs under the National Housing Act shall be informed, as early as possible upon indicating their interest in any such program, of the established policy of nondiscrimination in employment in construction, repair or rehabilitation work financed with assistance under the Act.

§ 200.410 Definition of term "applicant".

(a) In any mortgage or loan insurance transaction under this chapter where the Commissioner will control the mortgagor either through the ownership of corporate stock or under the provisions of a regulatory agreement, the term "applicant" as used in § 200.415 shall mean the mortgagor.

(b) In any transaction other than one specified in paragraph (a) of this section, the term “applicant” as used

in 200.415 shall mean the developer, or the builder, dealer or contractor performing the construction, repair or rehabilitation work for the property

owner.

§ 200.415 Agreement of applicant.

An applicant shall, prior to the Commissioner's issuance of any commitment or other loan approval, agree (in a form prescribed by the Commissioner) that there shall be no discrimination against anyone who is employed in carrying out work receiving assistance pursuant to this chapter, or against an applicant for such employment, because of race, color, religion, sex or national origin.

§ 200.420 Equal opportunity clause to be included in contracts and subcontracts. (a) The equal opportunity clause prescribed by the Commissioner pursuant to the regulations of the Secretary of Labor (41 CFR Chapter 60) shall be included in each nonexempt contract and subcontract for work receiving FHA assistance.

(b) Subcontracts less than $50,000 may incorporate by reference the equal opportunity clause.

(c) The equal opportunity clause shall be deemed to be a part of each nonexempt contract or subcontract whether or not it is physically incorporated in such contract.

§ 200.425 Exemptions.

(a) Transactions of $10,000 or under. Contracts and subcontracts not exceeding $10,000 are exempt from the requirements of the equal opportunity clause. No contractor or subcontractor shall procure supplies or services in less than usual quantities to avoid applicability of the equal opportunity clause.

(b) Contracts and subcontracts for indefinite quantities. Contracts and subcontracts for indefinite quantities are exempt from the requirements of the equal opportunity clause if the amount to be ordered in a single year under any such contract will not exceed $10,000.

(c) Work outside the United States. Contracts and subcontracts with regard to work performed outside the

United States by employees who were not recruited within the United States are exempt from the requirements of the equal opportunity clause.

(d) Others. Other exemptions set forth in the regulations of the Secretary of Labor at 41 CFR 60-1.5 apply to transactions under this subpart.

§ 200.430 Sanctions.

Failure or refusal to comply and give satisfactory assurances of future compliance with the requirements of this subpart shall be proper basis for applying sanctions. The sanctions shall be applied in accordance with the provisions of Executive Order 11246 and the relevant regulations of the Secretary of Labor.

Subpart K-Correction of Structural Defects.

§ 200.500 Purpose.

The purpose of this subpart is to specify the terms, conditions, and types of assistance that the Federal Housing Administration will render to an eligible mortgagor who has been unable to secure satisfactory reconstruction or replacement of structural defects in his property.

§ 200.502 Application for assistance.

An application for assistance in the correction of structural defects, in form satisfactory to the Commissioner, shall be filed by a mortgagor under an FHA-insured mortgage with the Field Office Director having jurisdiction over the area in which the property is located. The application shall be filed not later than four years after the date of the first mortgage insurance certificate issued in connection with the property. A mortgagor under a new FHA mortgage on the same property shall be entitled to file an application if it is filed within the same four-year period following the date of the first insured mortgage certificate.

§ 200.505 Nature of defect.

Assistance in the correction of structural defects shall be available only in connection with a structural defect in the property which the Commissioner has determined to be of such a nature

as to seriously affect the livability of the property. Such assistance shall not be available where the defect occurs as a result of fire, earthquake, flood, tornado, or waste.

§ 200.507 Eligibility requirements.

To be eligible for consideration by the Commissioner for receiving assistance in the correction of structural defects, the mortgagor must establish that:

(a) He is the owner of a one- to fourfamily dwelling covered by an individual mortgage that was insured by the Commissioner after September 2, 1964.

(b) The dwelling was approved for mortgage insurance prior to the beginning of construction and was inspected by the Commissioner or by the Veterans Administration.

(c) He has made reasonable efforts to obtain a correction of a structural defect in his property by the builder, seller, or other persons, and that the defect has not been corrected.

§ 200.510 Type of assistance.

The type of assistance in the correction of structural defects to be rendered a mortgagor who establishes eligibility shall be determined by the Commissioner. In those cases where the Commissioner determines it is appropriate and necessary, he may take any of the actions as follows:

(a) Pay expenses in connection with having the defect corrected.

(b) Pay the claim of the mortgagor for corrected damages to the property arising out of such defect.

(c) Acquire title to the property with the approval of the mortgagor and under such terms and conditions as are satisfactory to the mortgagor.

§ 200.512 Subrogation by mortgagor.

Where the Commissioner has taken action as provided in § 200.510, any legal rights the mortgagor may have against the builder, seller, or other persons, arising out of the defect in his property shall be assigned and set over to the Commissioner.

§ 200.520 Application for assistance.

An application for assistance in the correction of defects, in a form satisfactory to the Secretary, shall be filed by or on behalf of an eligible mortgagor with the Area or Insuring Office Director having jurisdiction over the area in which the property is located.

(a) In the case of a dwelling covered by a mortgage insured under Section 235 of the National Housing Act, the application shall be filed not later than one year after the insurance of the mortgage.

(b) In the case of a dwelling located in an older declining urban area and covered by a mortgage insured under Section 203 or 221 of the National Housing Act on or after August 1, 1968, but prior to January 1, 1973, the application shall be filed not later than December 3, 1976.

(c) In the case of a dwelling located in an older declining urban area and covered by a mortgage insured under Section 203 or 221 of the National Housing Act on or after January 1,

1973, but prior to August 3, 1976, the application shall be filed not later than August 3, 1977.

[41 FR 42185, Sept. 27, 1976]

§ 200.522 Eligibility for consideration.

The Secretary will consider a mortgagor eligible for assistance under this subpart if the Secretary finds that each of the following requirements is fulfilled:

(a) The person applying for assistance is the owner and mortgagor of a one or two family dwelling covered by a mortgage insured under Section 235 of the National Housing Act pursuant to a mortgage insurance commitment issued when such dwelling was more than 1 year old; or, in the case of a dwelling located in an older, declining urban area, the applicant is the owner and mortgagor of a one, two, three or four family dwelling covered by a mortgage insured under Section 203 or 221 of the National Housing Act on or after August 1, 1968, but prior to August 3, 1976, pursuant to a mortgage insurance commitment issued when such dwelling was more than 1 year old.

(b) One or more structural or other defects existed in such dwelling on the date of the issuance of the mortgage insurance commitment which: (1) So seriously affect use and livability as to create a serious danger to the life or safety of the inhabitants of such dwelling, and (2) were of such a nature that a proper inspection could reasonably be expected to have disclosed them; and

(c) The application for assistance was filed in accordance with the provisions of this subpart.

[41 FR 42185, Sept. 27, 1976]

§ 200.527 Consideration for assistance.

Upon a finding by the Secretary that a mortgagor is eligible to be considered for assistance under this subpart, the Secretary will, in his sole discretion, determine whether to afford assistance hereunder by direct expenditures to correct defects as defined in § 200.522(b), compensation of a mortgagor who has made such expenditures himself, or a combination of

both direct expenditures and compensation of the mortgagor. The Secretary, in determining the form of assistance and when it will be afforded, will consider:

(a) Whether the defects so seriously affect use and livability as to create a serious danger to the life or safety of the inhabitants;

(b) The availability of funds from which the Secretary is authorized to make expenditures hereunder; and

(c) Such other matters as he deems material.

[36 FR 24467, Dec. 22, 1971, as amended at 38 FR 25994, Sept. 17, 1973; 40 FR 8948, Mar. 4, 1975]

§ 200.533 Right and finality of determination.

All decisions of the Secretary with respect to assistance under this subpart are final and conclusive and not subject to judicial review.

Subpart M-Affirmative Fair Housing Marketing Regulations

SOURCE: 37 FR 75, Jan. 5, 1972, unless otherwise noted.

§ 200.600 Purpose.

The purpose of this subpart is to set forth the Department's equal opportunity regulations for affirmative fair housing marketing under FHA subsidized and unsubsidized housing programs.

§ 200.605 Authority.

The regulations in this subpart are issued pursuant to the authority to issue regulations granted to the Secretary by section 7(d) of the Department of Housing and Urban Development Act of 1965, 42 U.S.C. 3535(d), and implement the functions, powers, and duties imposed on the Secretary by Executive Order 11063, 27 FR 11527, and Title VIII of the Civil Rights Act of 1968, as amended, 42 U.S.C. 3608. [40 FR 20080, May 8, 1975]

§ 200.610 Policy.

It is the policy of the Department to administer its FHA housing programs affirmatively, as to achieve a condition in which individuals of similar income

levels in the same housing market area have a like range of housing choices available to them regardless of their race, color, religion, sex, or national origin. Each applicant for participation in FHA subsidized and unsubsidized housing programs shall pursue affirmative fair housing marketing policies in soliciting buyers and tenants, in determining their eligibility, and in concluding sales and rental transactions.

[40 FR 20080, May 8, 1975]

§ 200.615 Applicability.

The affirmative fair housing marketing requirements, as set forth in paragraphs (a) through (f) of § 200.620, shall apply to all applicants for participation in FHA subsidized and unsubsidized housing programs whose application is hereafter approved for development or rehabilitation of:

(a) Subdivisions, multifamily projects and mobile home parks of five or more lots, units or spaces; or

(b) Dwelling units, when the applicant's participation in FHA housing programs had exceeded or would thereby exceed development of five or more such dwelling units during the year preceding the application, except that there shall not be included in a determination of the number of dwelling units developed by an applicant those in which a single family dwelling is constructed or rehabilitated for occupancy by a mortgagor on property owned by the mortgagor and in which the applicant had no interest prior to entering into the contract for construction or rehabilitation.

§ 200.620 Requirements.

With respect to all FHA subsidized or unsubsidized programs in which the applicant hereafter participates (except for housing for which a conditional commitment has been issued prior to the effective date of these regulations), the applicant shall meet the following requirements or, if he contracts marketing responsibility to another party, be responsible for that party's carrying out the requirements: (a) Carry out an affirmative program to attract buyers or tenants, regardless of sex, of all minority and ma