Can the mortgagee sell an acquired HECM property for less than the appraised value?

The mortgagee may not sell FHA insured properties acquired by foreclosure or deed-in-lieu of foreclosure for less than the appraised value unless written permission is obtained from HUD. Due to current economic conditions, HUD will review requests to accept an amount that is less than the appraised value on a case-by-case basis and determine if the sale is in the best interest of all parties involved.

To request a review, please submit the information below and forward to HUD's Loan Servicing Contractor.

  • Cover Letter/Signed sales contract with specified closing date
  • Estimated HUD-1 or Net to Lender Sheet
  • Current appraisal (less than 6 months old) completed by a HUD Roster Appraiser
  • Length of time on the market
  • Listing prices
  • Offers to Date
  • Market Statistics


Novad Management Consulting
Shepherd’s Mall
2401 NW 23rd Street, Suite 1A1
Oklahoma City, OK 73107

Toll-Free Telephone Number: (800) CALLFHA (225-5342)
Fax Number: (800) 489-1733

Borrower inquiries (HECM or Forward)

HECM Servicer inquiries

Extensions and Variances Automated Requests System (EVARS) and E-Class assistance

Payoff requests for Secretary-Held HECM mortgages:

24 CFR 206.125(g)

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02254