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Topic 6. Limited Denial of Participation (LDP)
Introduction
A Limited Denial of Participation (LDP)
is a sanction imposed by a local VA office limiting a program participant’s activities within that local VA office’s jurisdiction
can either exclude the program participant from participation in any VA loan guaranty activities in the geographic area or just certain types of loan guaranty activities in the geographic area, and
can be the sole sanction against a participant, or a means to immediately end unacceptable conduct while more severe sanctions are considered.
Note: An LDP may prohibit the participant from performing VA appraisals, but not from acting as a management broker or in another role.
Participant is an Entity
If the participant is an entity, the sanction can be imposed against
the entire organization
a certain part of the organization, or
only certain individuals.
LDP Exceptions
An LDP can be imposed against any program participant (individual or entity) and/or affiliate except
lenders
employees of lenders, and
manufactured home manufacturers.
Causes for LDP
VA can impose LDPs based on any of a multitude of causes outlined in VA regulations 38 CFR 44.705. These causes include, but are not limited to
irregularities in a participant’s or contractor’s performance in the VA loan guaranty program
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failure to satisfy contractual obligations or to proceed in accordance with contract specifications
construction deficiencies deemed by VA to be the participant’s responsibility, and
failure to proceed in accordance with VA requirements or to comply with VA regulations.
LDP as Reciprocal Action
A local VA office may also impose an LDP as a reciprocal action because an LDP or other sanction was imposed upon the participant by
another VA office, or
an office of another Federal agency, such as HUD or USDA.
A VA office may also notify local offices of another Federal agency that the LDP action has been taken.
Jurisdiction Restrictions
The participant is excluded from targeted activities only within the jurisdiction of the VA office imposing the sanction. If other VA offices impose a reciprocal LDP, the exclusion applies within their jurisdictions also.
Appeal Rights
No additional appeal rights are provided to the participant for reciprocal LDPs. The participant is provided appeal rights with the original LDP only, and may choose to exercise them at that time.
LDP Time Period
LDPs can be imposed for a specified period up to 12 months.
Builders With Unresolved Deficiencies
In the case of builders with unresolved construction deficiencies, the LDP may be for
an indefinite period pending correction of the construction deficiencies, or
a specified period up to 12 months.
Obtaining LDP Party Information
LDP parties are not listed in GSA’s List of Parties Excluded From Federal Procurement and Nonprocurement Programs. Therefore, information must be obtained from the local VA office.