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14.311 Single Family Property Disposition
OFFICE OF HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
National Housing Act, as amended, 12 U.S.C 1710, Sections 203(b), 203(k), 204, 24 CFR 200.
To sell the inventory of HUD-acquired properties in a manner that expands home ownership opportunities, strengthens neighborhoods and communities, and ensures a maximum return to the FHA mortgage insurance fund.
TYPES OF ASSISTANCE:
USES AND USE RESTRICTIONS:
The Single Family Property Disposition Program is the marketing and sale of one to four-family properties acquired by HUD after foreclosure of an FHA-insured mortgage. Some properties are sold to any interested buyer on a competitive basis, others are sold to local governments and nonprofit organizations, at a discount, to further local affordable homeownership programs. Under the local government/nonprofit initiatives, HUD provides discounts of up to 30 percent off the list price to local government agencies and nonprofit organizations that buy HUD homes located in revitalization areas. Homes located outside of revitalization areas are sold at 10 percent discount. Revitalization areas are geographical areas designated by HUD in consultation with local governments and interested nonprofit organizations which are either very low income areas, or have a high concentration of eligible HUD homes, or have a low home ownership rate. The local government/nonprofit purchaser enters a binding agreement that the housing assets will be used in conjunction with a home ownership plan with the primary purpose of expanding home ownership, and to meet specific home ownership performance goals, in the revitalization area in which the homes are situated. The home ownership plan must include rehabilitation standards that meet or exceed HUD's standards for housing quality. The purchaser also agrees that each home will be rehabilitated in accordance with those standards prior to sale to eligible purchasers. Most HUD home sales are to members of the general public who may be eligible to obtain low down payment FHA insured financing to purchase their new home. FHA also has programs to enable new home owners to obtain FHA-insured financing to repair and/or rehabilitate a HUD home. Under the Section 203(b) program, HUD insures the mortgage up to a maximum mortgage amount and borrowers generally will pay a low down payment. The homes may be new or existing one to four family homes in urban and rural areas. The homes also must meet HUD's minimum property standards. Under the 203(b) repair with escrow financing, an escrow account for up to $5,000 in repairs to bring the home up to minimum property standards is established with the lender making the FHA-insured loan. The costs of repairs are included in the loan amount and are repaid by the borrower as part of the housing payment. This financing is only available with FHA-insured loans. Section 203(k) loans enable a home buyer to purchase and rehabilitate a HUD home (in excess of $5,000 in costs) up to a maximum allowable mortgage amount with one loan.
Applicant Eligibility: Local Governments and Nonprofit Organizations: HUD contractors in the specific area should be contacted regarding eligibility requirements. Contact HUD at the number shown below for a listing of nationwide HUD contractors. FHA Insured Financing: Generally, anyone who has a satisfactory credit rating; enough cash to close the loan; sufficient, steady income to make the monthly payments without difficulty; and who will live in the home can be approved for an FHA insured mortgage. Income is only one of several factors that apply in the lending process. Interested buyers should contact their lender for more information.
Pre-application Coordination: None. This program is excluded from coverage under E.O. 12372, Intergovernmental Review of Federal Programs (or consultation with State and local governments regarding program design).
Formula and Matching Requirements: Not applicable.
POST ASSISTANCE REQUIREMENTS:
Reports: Nonprofit organizations purchasing homes at a 30 percent discount must submit an annual report, by February 1st, to the Director of the appropriate Single Family Homeownership Center(s), identifying their program accomplishments (see http://www.hud.gov/groups/grantees.cfm).
Account Identification: 86-4070-0-1-371; 86-4072-0-1-371; 86-4077-0-1-371; 86-4587-0-1-371.
Over 65,000 homes were sold in fiscal year 2001.
REGULATIONS, GUIDELINES, AND LITERATURE:
HUD Regulations at 24 CFR Part 291. Program information is available on HUD's website at http://www.hud.gov.
Regional or Local Office:
EXAMPLES OF FUNDED PROJECTS:
CRITERIA FOR SELECTING PROPOSALS: