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The Housing Corporation today issued a statement about the future of the troubled Ujima Housing Association.
Ujima, which has supported London's ethnic minority communities for the last three decades, was placed under supervision by the Corporation in October.
In November, an interim board launched a financial analysis, which found that Ujima was in difficulties.
A shareholders' meeting held last week considered a proposal that Ujima becomes a subsidiary of the London and Quadrant Group and is given financial help.
In a statement, the Housing Corporation today said: "On December 20 2007 the Housing Corporation was notified that Ujima was in default of all its loans and that lenders had issued a notice calling
in their security on these loans.
"In order to protect tenant interests, the Housing Corporation has exercised its powers under Part I of the Housing Act 1996 to impose a moratorium in respect of the repayment of Ujima's debts in
order to enable draft proposals to be put to Ujima's secured creditors in respect of those debts.
"Under the terms of the draft proposal, London and Quadrant Housing Group would receive a transfer of the assets and liabilities of Ujima.
"Should the proposal be accepted by the secured creditors and the Financial Services Authority, the Housing Corporation will appoint a special manager under Part I of the Housing Act 1996 in order
to implement the terms of the proposal."
