HUD: Upcoming HUD-Held Single Family Note Sale Emphasizes Nonprofit Participation

Competitive bid sale provides priority bidding to nonprofit organizations and units of state and local government.

The U.S. Department of Housing and Urban Development’s Office of Asset Sales announced on Thursday that it will conduct a competitive bid HUD-held vacant note sale (HVLS 2022-1) on November 10, 2021. The sale will include approximately 1,730 reverse mortgage notes secured by properties where the borrower is deceased and not survived by a non-borrowing spouse. Consistent with the Biden-Harris Administration’s September 1, 2021, announcement that more HUD-owned properties should be returned to future owner-occupancy, HUD will offer up to 50 percent of the notes in the multi-loan pools for bids first by eligible non-profit organizations and units of state and local government. Previous sales prioritized approximately 10 percent of the mortgage notes for this purpose.

“This sale provides greater opportunities for non-profits and local governments to purchase properties that can then be made available for affordable homeownership and support neighborhood revitalization,” said Principal Deputy Assistant Secretary for Housing Lopa P. Kolluri.

The sale seeks to increase affordable housing supply, expand opportunities for homeownership and rental housing, and revitalize communities through the disposition of these notes, including:

  • Selling properties to low- to moderate-income homebuyers at a price affordable to households earning less than 120 percent of the Area Median Family Income; and
  • Leasing properties at rents affordable to households earning less than or equal to 80 percent of the Area Median Family Income.

To encourage more non-profit organizations and local governments to participate in this and future sales, HUD is hosting a virtual training conference for such organizations on September 29, 2021. The conference, “Expanded Opportunities for Participation,” will include presentations on the note sale process, technical considerations, and an overview of the mortgage notes and processes for the November 10, 2021, sale.

HUD’s Office of Asset Sales is part of the Office of Finance and Budget in HUD’s Office of Housing. All mortgage notes to be sold through the November 10, 2021, sale are for vacant and abandoned properties secured by Home Equity Conversion Mortgages assigned to HUD following the death of the borrower and any non-borrowing spouse where the time for heirs to come forward has elapsed.

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