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Choice to Not Recapture or Settle for Less than Whole Amount The various federal regulations cited above establish the City as the Lead Agency with authority to recapture the full amount of ineligible assistance whether awarded due to errors by BCC Partners or a Housing Assistance Program recipient. However, for claims under $100,000, if the City, State, or HUD determines that the recipient cannot repay ineligible grant assistance, BCC may choose to 1) forgive the funding; or 2) negotiate another amount. If negotiated, the City may defer the repayment to sale, refinance, or transfer of the existing home or otherwise place a lien on the property, or enter into a repayment plan with the recipient. BCC defines "ability to pay" as: "determined based on an assessment of the respondent's resources available both presently and prospectively from which BCC could ultimately recover the total award, which may be predicted based on historical evidence." The City will make initial determinations and bring findings to the BCC in determining whether to recapture ineligible assistance. The BCC will consider the cost effectiveness of such action given the amount of ineligible assistance and the availability of records to support BCC's determination. BCC may forgo collection of ineligible assistance if the following conditions are met: 1. A demand for recovery of the ineligible assistance was made; and 2. The ineligible assistance did not result from inaccurate or false information, knowingly or fraudulently, provided by the recipient; and 3. BCC determines that the recipient is unable to comply with the ineligible assistance repayment demand, but is otherwise willing and able to meet BCC requirements; and 4. BCC determines that it is in the best interest of the Federal Government to forgo collection of the ineligible assistance for amounts less than $5,000. BCC will normally return files concerning default amounts that are less than a threshold amount of $5,000 because the minimum cost to pursue a legal proceeding to recover money is unlikely to be less than that amount. Note that ALL FOUR conditions above must be met for forbearance. BCC may elect to accept a compromise settlement. If a compromise amount is negotiated and then put on an installment plan, the executed contract must say that if the recipient defaults, the recipient will owe the ENTIRE amount of the originally determined ineligible assistance, not just the negotiated amount. Assessment of a recipient's negotiated compromise amount will be based on the recipient's financial statements, obtained on penalty of perjury, showing assets, liabilities, income, expenses, credit reports and other pertinent financial information, 31 U.S.C. 902.2(g). 24 L•\FRIEDLAN\My Documents L\CDBG\2016 CDBG-DR IGA Lousville_FINALdocx 3/15/2016