How can a Governmental Entity purchase a HUD Real Estate Owned (REO) Property at a discount?

Governmental Entities do not need to be pre-approved prior to purchasing HUD Real Estate Owned (REO) Properties at a discount, provided they are not organized as 501(c)(3) nonprofits.

Governmental Entities are included in the definition of Owner-Occupant Buyers and may purchase Properties during the same periods as Owner-Occupant Buyers.

For Direct Sales, Governmental Entities may purchase HUD REO Properties at the following discounts on the list price:

  • 30 percent off the list price for Properties that are located within a Revitalization Area and uninsured;
  • 10 percent off the list price for Properties located outside of a Revitalization Area that are insured or uninsured;
  • 10 percent off the list price for insured Properties located within a Revitalization Area; and
  • 15 percent off the list price for FHA-insured or uninsured Properties located outside of a Revitalization Area, and insurable Properties located inside a Revitalization Area when:
  • the Asset Manager (AM) has accepted five or more bids from the Governmental Entity or HUD-approved Nonprofit within a 15-business day period; and
  • the sales are closed in a single transaction.

Governmental Entities must submit bids for HUD REO Properties electronically through HUDHomestore. In order to submit bids through HUDHomestore, Governmental Entities must:

  • have applied for and been issued a Name and Address Identification Number (NAID); and
  • be registered on HUDHomestore or successor site.

To obtain a NAID number and for detailed NAID registration information and instructions please visit: and click on NAID Application Portal on the gray bar at the top of the page, or you can go directly to the page at:

For guides and short videos on Registering as a Bidder and Submitting a Bid go to:

If you need further clarification, you may send a request for additional information by email to or call the FHA Resource Center at

For policy information see Handbook 4000.1  IV.B.2.d.iv and  IV.B.2.g. at:

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-03195