Are there exceptions allowing an unoccupied property to be sold under the Standard Pre-Foreclosure Sale (PFS) option?

HUD authorizes Mortgagees to grant exceptions to Non-Occupant Borrowers, allowing participation in the Standard Pre-Foreclosure Sale (PFS) Program when the following can be demonstrated:
  • need to vacate: the non-occupancy was related to the cause of Default; and
  • not purchased/used as rental: the subject Property was not purchased as a rental or used as a rental for more than 18 months prior to the Borrower’s acceptance into the PFS Program.  
Additional questions may be directed to the HUD National Servicing Center at (877) 622-8525.
 For policy information see Handbook 4000.1 III.A.2.l.ii.(B)(2)(c)(viii.) 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-05181