24 C.F.R. § 1000.116
What should HUD do before declining a proposal to provide assistance to non low-income families or a model housing activity?
HUD shall consult with a recipient regarding the recipient's proposal to provide assistance to non-low-income families or a model housing activity. To the extent that resources are available, HUD shall provide technical assistance to the recipient in amending and modifying the proposal, if necessary. In case of a denial, HUD shall give the specific reasons for the denial.