Guide to Federal Government Sales Department of Housing and Urban Development

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Department of Housing and Urban Development

Office of Single Family Housing

What is sold

When a mortgage lender forecloses on a mortgage insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD), the lender may convey the property to HUD in exchange for the mortgage insurance benefits. HUD sells the homes to the public, nonprofit groups, and governmental entities at fair market value or at a discounted price under special programs. The acquired properties are single-family homes (1-4 units), including townhomes, condominiums, or other types of single-family dwellings.

How HUD Homes are sold

HUD uses the competitive electronic bid process as its primary method of disposing of acquired properties. Bids must be submitted online at t he HUD Home Sale website at www.hud.gov/homes. Typically, at the end of the offer period (usually 10 days), all the bids received on the home are opened. HUD accepts the bid giving the highest acceptable net return.The winning bid is then posted on the HUD Home Sale website. Buyers must use a licensed real estate broker to prepare and submit bids. From time to t ime, HUD may use the auction method to dispose of properties in hard to sell areas and where there is a l arge inventory of properties that have been on-hand longer than six months. HUD also offers properties on a direct sale basis to nonprofit organizations and governmental entities under special sales programs.

How sales are advertised

HUD provides information on available properties via widely circulated daily newspapers and the Internet at www.hud.gov/homes.

Special restrictions/conditions

HUD does not offer direct financing on its properties. However, FHA-insured financing is available through approved FHA lenders on many of HUD's properties. Generally, HUD employees, their relatives, and HUD contractors are prohibited from buying HUD properties.

For more information

Call 1 (800) 767-4483 to request information on the HUD Homes sales program. You may also call a participating real estate broker in your area. Participating real estate brokers are a valuable source of information and advice about HUD Homes and HUD will pay the broker's fee. Consult the HUD website at www.hud.gov/homes. To read the HUD brochure, The HUD Home Buying Guide, which includes helpful advice on choosing and buying a HUD home, visit www.pueblo.gsa.gov/cic_text/housing/hudhome/sfhhomeb.html.

Office of Multifamily Housing Programs

What is sold

When an owner of a multifamily property (5 or more units) with a HUD-insured mortgage defaults on the mortgage, the mortgagee generally assigns the mortgage to HUD in exchange for the payment of insurance benefits. When HUD becomes the mortgagee, it can sell the note or foreclose if the mortgage is in default.

Examples of these properties include multifamily apartment projects, nursing homes, assisted living facilities, mobile home parks, and hospitals.

How items are sold

Note sales and foreclosure sales are generally auction-type sales to the public and are the predominant method of sale. If HUD is the high bidder at the foreclosure sale, HUD becomes owner of the property. City, state, and local public housing agencies have a right of first refusal to purchase HUD-owned properties if they can meet the sales conditions set by HUD. If the property is not sold pursuant to the right of first refusal, it is generally sold to the public through a competitive process, either by sealed bid, auction, or request for proposals.

HUD-held multifamily mortgage loans are usually offered for sale in pools according to various criteria such as performance status, collateral type, loan type, and geography. Bidders must meet specific qualifications. A Bidder Information Package is available to all qualified bidders, which details the loans offered for sale and the bidding process. The loans are sold servicing-released, without FHA insurance and, except as expressly provided in the loan sale agreement, without any representation or warranty, whether express, implied or created by operation of law.

How sales are advertised

Foreclosure sale information is available on the Internet, in the Wall Street Journal every Wednesday, and in local and regional newspapers where properties for sale are located. HUD also maintains a mailing list of persons and firms who have indicated a desire to be informed of all sales--an Invitation to Bid is e-mailed to everyone on the mailing list for each property advertised for competitive sale.

Note: sales are advertised in financial newspapers such as the Wall Street Journal and on the Internet at www.hud.gov/offices/hsg/comp/asset/mfam/mhls.cfm. This site is updated as Note sales are scheduled.

Special restrictions/conditions

Apartment projects located in areas where there is a need for affordable housing are usually sold with a condition that they be maintained as affordable housing for at least 20 years. HUD does not offer financing to purchase properties. HUD may impose deed restrictions to assure that an apartment project is repaired to HUD standards and maintained as affordable housing, generally for at least 20 years after the repairs are completed. Some projects are sold with a requirement that they be partially or totally demolished.

Subsidized mortgage loans are sold with protections for the tenants. Unsubsidized mortgage loans are generally sold without any restrictions.

For more information

To obtain a list of projects currently available for sale, consult HUD's website at www.hud.gov/offices/hsg/mfh/pd/multifam.cfm and the Wall Street Journal every Wednesday. To get on the mailing list, go to www.hud.gov/subscribe/index.cfm.

For information on mortgage sales, visit HUD's website at www.hud.gov/offices/hsg/comp/asset/mfam/mhls.cfm

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