FHA Single Family Housing Policy Handbook 4000.1, Part IV — f. Sales Timeline (04/28/2025)

FHA Single Family Housing Policy Handbook 4000.1, Part IV — f. Sales Timeline (04/28/2025)

f. Sales Timeline (04/28/2025) i. Tenant Right of First Refusal (A) Definition The Tenant Right of First Refusal is a tenant’s ability to purchase a HUD REO Property on a non-competitive basis before it is listed for sale. (B) Standard HUD’s AM will contact eligible tenants regarding their opportunity to purchase occupied Properties at list price under the tenant right of first refusal. ii. Asset Control Area Program (A) Definition The Asset Control Area (ACA) Program is a direct sale program in which eligible local, county, or state governments or HUD-approved Nonprofit organizations may enter into a contract with HUD to purchase vacant HUD REO Properties in designated areas. (B) Standard HUD will sell to entities participating in the ACA Program all or a specified number of vacant HUD REO Properties acquired in designated areas as specified in the ACA agreement. iii. National First Look Program (A) Definition The National First Look Program is a direct sale program in which participating Neighborhood Stabilization Program (NSP) grantees have the exclusive opportunity to purchase HUD REO Properties located in NSP areas. (B) Standard HUD will make available to participating NSP grantees information on HUD REO Properties for sale within NSP-designated areas. Eligible NSP buyers may purchase these HUD REO Properties at a discount of 10 percent for insurable Properties or 15 percent for uninsurable Properties off the list price, less the cost of any applicable listing and sales commission. IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1642 Last Revised: 11/26/2025 (1) Eligible Neighborhood Stabilization Program Grantees The following NSP grantees are eligible to purchase HUD REO Properties at a discount: • direct recipients of NSP funds; or • sub-recipients (or sub-awardees) of direct NSP grantees; and • consortium members under NSP2. (2) First Look Purchase Period The NSP grantee must submit an offer for a HUD REO Property within two business days after the date of the property appraisal. Each First Look Property will remain available for purchase under the First Look Sales Method until an eligible NSP grantee buyer submits an offer to purchase the Property, or through the expiration of the two-day purchase period, whichever comes first. (3) Confirmation of Location of Property The NSP grantee buyer is responsible for confirming that the Property is within the boundaries of the NSP designated area. Where the boundaries of any two or more NSP areas overlap and where multiple eligible NSP grantee buyers submit offers to purchase a HUD REO Property in that overlapping area, the right to purchase the Property is granted to the eligible NSP grantee buyer that first submits an offer to purchase that Property. (4) Use of Neighborhood Stabilization Program Funds The NSP grantee buyer must use NSP funds, at least in part, in order to purchase a HUD REO Property under the NSP grantee buyer time frame and discount. iv. Lottery Period (A) Definition The Lottery Period is a direct sale period in which Governmental Entities, HUD- approved Nonprofits, and GNND participants may submit bids for designated HUD REO Properties. (B) Standard Governmental Entities, HUD-approved Nonprofits, and GNND participants may submit bids equal to the list price during the seven-Day lottery period. At the end of the lottery period, HUD will select a winning bidder at random. The AM will reflect applicable discounts in the sales contract. IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1643 Last Revised: 11/26/2025 (1) Good Neighbor Next Door During the lottery period, GNND participants may submit bids for designated HUD REO Properties. When separate bids are submitted by spouses who are both GNND participants, HUD may approve a bid from only one spouse. (2) Lottery for Governmental Entities and HUD-Approved Nonprofits During the lottery period, Governmental Entities and HUD-approved Nonprofits may submit bids at list price for uninsured Properties located within their approved purchase areas. v. Exclusive Listing Period (A) Definition The Exclusive Listing Period is a competitive listing period in which only eligible Governmental Entities, HUD-approved Nonprofits, and Owner-Occupant Buyers may submit bids on HUD REO Properties. (B) Standard Governmental Entities, HUD-approved Nonprofits, and Owner-Occupant Buyers may submit bids during the exclusive listing period. HUD will choose the winning bid, which produces the greatest net return to HUD and meets HUD’s terms of offering of the Property. (1) Length of Exclusive Listing Period For Properties marketed as “insured” or “insured with escrow,” the exclusive listing period is 15 Days. For Properties marketed as “uninsured,” the exclusive listing period is five Days. (2) Review of Bids during Exclusive Listing Period (a) Bid Opening for “Insured” and “Insured with Escrow” HUD REO Properties (i) Bids Received from Days 1 through 10 For Properties marketed as “insured” or “insured with escrow,” the AM will open all bids received from the 1st through the 10th Day of the exclusive listing period on the next business day after the 10th Day of the exclusive listing period. The AM opening the bids will treat all bids as having been received simultaneously. IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1644 Last Revised: 11/26/2025 (ii) Bids Received from Days 11 through 15 If none of the bids received by the 10th Day are accepted, the AM will open and review bids received during the 11th Day up to the 15th Day daily on the next business day. If a bid is not accepted during the 15-Day exclusive listing period, the AM will extend the listing to all buyers by listing the Property in the extended listing period. (b) Bid Opening for “Uninsured” HUD REO Properties For Properties that are marketed as “uninsured,” AMs will open and review all bids received from the 1st through the 5th Day on the next business day after the 5th Day of the exclusive listing period. The AM will treat all bids as having been received simultaneously. If a bid is not accepted in the five-Day exclusive listing period for Properties listed as “uninsured,” the AM will extend the listing to all buyers by listing the Property in the extended listing period. (c) Bid Opening on Weekends and Federal Holidays HUD considers bids received on Fridays, Saturdays, and Sundays in the same bid period as being received simultaneously during that period. The AM will open those bids on: • the following Monday; or • the next business day if Monday is a federal holiday. HUD considers bids received on a federal holiday in the same bid period as being received on the previous Day. The AM will open those bids on the next business day. vi. Extended Listing Period (A) Definition The Extended Listing Period is a competitive listing period during which all buyers may submit bids on HUD REO Properties. (B) Standard If a Property remains unsold for 15 Days, HUD will extend the listing to all buyers by listing the Property in the extended listing period. All buyers, including Investors, may submit bids on HUD REO Properties during the extended listing period. IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1645 Last Revised: 11/26/2025 (C) Review of Bids during Extended Listing Period The AM will open bids at the end of each business day, subject to the policies in Bid Opening on Weekends and Federal Holidays. vii. Bulk Sales (A) Definition A Bulk Sale is a direct sale of five or more HUD REO Properties to eligible buyers. (B) Standard HUD may seek to dispose of Properties through bulk sales. HUD will advertise and sell these Properties on an all-cash, as-is basis, without warranty and without FHA- insured mortgage financing. To be eligible for bulk sale discounts, the Governmental Entity or HUD-approved Nonprofit purchasing in bulk must close on all property sale transactions no later than 60 Days from the date the contract is ratified. Bulk Sale to Eligible Governmental Entities and HUD-Approved Nonprofits If a Property is marketed and remains unsold for 60 Days, HUD may elect to sell the Property to eligible Governmental Entities and HUD-approved Nonprofits as part of a bulk sale as follows: • Properties with an appraised value greater than $100,000 will be priced at a 10 percent discount from the appraised value; • Properties with an appraised value less than or equal to $100,000 will be priced at a 50 percent discount; • Properties with an appraised value less than $20,000, and considered “demolition properties” will be priced at $100; • participants purchasing 50 or more Properties will receive an additional 5 percent discount; and • under certain conditions, local governments may purchase Properties that have been listed for 180 Days or more for $1, plus closing costs. viii. Dollar Homes – Government Sales (A) Definition The Dollar Homes – Government Sales Program is a direct sales program through which eligible Governmental Entities may purchase certain HUD REO Properties for $1 each, plus closing costs. IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1646 Last Revised: 11/26/2025 (B) Standard If a Property remains unsold after 180 Days, HUD will remove the Property from the market and offer it exclusively to local governments for 10 Days before returning it to the extended listing period, if no $1 bids are accepted. Local governments may purchase for $1 each, plus closing costs, certain Properties meeting the following criteria: • the Property is not under a contract for sale; • the Property has been offered to the public and marketed for sale for at least 180 Days; • the Property is within the jurisdiction of the local government; • the Property is uninsured; and • the current as-is Market Value of the Property is $25,000 or less. (C) Commissions and Costs (1) Commissions Listing brokers will not receive a commission for a Property sold under the Dollar Homes – Government Sales Program. HUD will not pay a selling agent commission for Properties sold under the Dollar Homes – Government Sales Program; buyers may submit a bid directly without the service of a selling broker. (2) Local Government Liens In those instances where a local government has placed liens against the Properties and fines have been assessed, the local government must remove these liens at no cost to HUD in an effort to facilitate the sale. (D) Dollar Homes Closing Costs Buyers will be required to pay closing costs involved with each Dollar Homes - Government Sales Program property sale transaction. (E) Partnering with HUD-Approved Nonprofits (1) Standard Local Governmental Entities may partner with local nonprofits to purchase Properties under the Dollar Homes – Government Sales Program for local housing and community development initiatives. Governmental Entities may only purchase eligible HUD Properties within their jurisdiction and must: IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1647 Last Revised: 11/26/2025 • identify the intended disposition strategy or strategies and clear public purpose goals and objectives consistent with supporting local housing or community development initiatives, including rehabilitation and resale to first time homebuyers or Low- to Moderate-Income buyers, that it will pursue with Properties purchased through this program; • affirm that all profits from resale of these Dollar Homes will go to support local housing or community development initiatives; and • identify what specific local housing or community development programs or uses these profits will support. (2) Annual Reporting Governmental Entities must provide information pertaining to the purchase and subsequent resale of Properties purchased under the Dollar Homes – Government Sales Program in its annual report to HUD’s Nonprofit Data Management System (NPDMS). The report must include information on: • the ultimate Owner-Occupant Buyer; • the amount of profit realized on the final sale; and • the specific local housing/community development programs or uses these profits were used to support. (3) Compliance with Program Requirements Failure of a Governmental Entity to comply with any of the Dollar Homes – Government Sales Program requirements will result in disqualification from participation in the program. (4) No Direct Purchase by Nonprofits Nonprofit organizations are not permitted to directly purchase Properties under this sales program on their own behalf. HUD will accept a sales contract from nonprofits only if a Governmental Entity identifies in its intended disposition strategy that the nonprofit will act as its agent to purchase these Properties. (5) Demolition Consideration (a) Request to HUD A local government may recommend to the AM the demolition of any Property that is currently available for purchase by that entity meeting the Dollar Homes – Government Sales standard. HUD will consider the following criteria in its decision: IV. CLAIMS AND DISPOSITION B. Title II Disposition 2. REO Property Disposition Handbook 4000.1 1648 Last Revised: 11/26/2025 • whether HUD’s last listed price, plus the cost of rehabilitating the Property to meet HUD’s Minimum Property Standards (MPS) is more than 130 percent of the after-rehabilitation value; • whether the cost of demolition exceeds the cost of rehabilitating the Property to meet MPS; and • whether the Property is listed on or eligible for the National Register of Historic Places or located in a historic district. If it is, a Section 106 consultation with the State Historic Preservation Officer and other interested parties is required before HUD approves the Property for demolition. (b) Cost of Demolition If HUD approves the Property for demolition, HUD will pay for the demolition and clearing of the debris. (c) Sale after Demolition Following demolition, HUD will list the land for sale to the general public for 10 Days at its Fair Market Value (FMV). If no acceptable offers are received from the general public, HUD will offer the land to local governments for $1 for 10 Days. If the land is not purchased by local governments, HUD will relist the Property to all classes of bidders until the Property is sold. ix. HUD Rescission of Listing HUD, at its discretion, may remove a listing or cancel a sales contract and may return all or a portion of a buyer’s earnest money deposit if: • HUD has not acquired the Property; • HUD is unable or unwilling to remove valid objections to the title prior to closing; or • HUD determines that the buyer is not an acceptable Borrower.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part IV — f. Sales Timeline (04/28/2025) · source URL · snapshot 8c03836f77f317e1