Are list price discounts offered to Nonprofits on HUD homes in Competitive sales periods?

Discounts off the list price of HUD Homes, offered to HUD-Approved Nonprofits, may be applied only during Direct Sale bid periods which includes the Lottery Listing Period.

For competitive sales listings on individual properties, Exclusive or Extended Bid Listing Period, HUD will not offer or provide post-bid acceptance discounts to any purchaser.  Instead, HUD will accept the bid that produces the greatest net return and also meets all the terms and conditions of HUD’s offering with priority given to owner-occupant purchasers for properties being offered with FHA-insured mortgages.

For properties offered without FHA-insured mortgages, priority will be given to governmental entities and nonprofit organizations prior to the owner-occupant purchasers.

The net offer is calculated by subtracting the dollar amounts required by the purchaser for the financing and loan closing costs, and the broker’s sales commission, from the bid price.

This guidance does not apply to HUD Homes sold under the FHA disposition programs, including Bulk Sales, Good Neighbor Next Door, and Asset Control Areas.

For policy information see Handbook 4000.1 Sections IV.B.2.d.iv; IV.B.2.f.v; & IV.B.2.h. at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

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-04360