Multifamily Property Disposition

To manage and dispose of multifamily housing projects that are owned by the Secretary or that are subject to a mortgage held by the Secretary in a manner that is consistent with the National Housing Act; protect the financial interests of the Federal government, and will, in the least costly fashion
among reasonable available alternatives: preserve certain housing so that it can remain available to and affordable by low-income persons; preserve and revitalize residential neighborhoods; maintain the existing housing stock in a decent, safe and sanitary condition; minimize the involuntary displacement of tenants; maintain housing for the purpose of providing rental housing, cooperative housing, and home ownership opportunities for low-income persons; supporting fair housing strategies; and dispose of such projects in a manner consistent with local housing market conditions.

Agency - Department of Housing and Urban Development

The Department of Housing and Urban Development's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. HUD fulfills this mission through high ethical standards, management and accountability, and by forming partnerships with community organizations.

Office - Interested parties can contact the Multifamily Property Disposition Centers in the Atlanta and Fort Worth HUD Offices listed in Appendix IV of the Catalog.

Program Accomplishments

HUD closes about 50-125 projects annually.

Uses and Use Restrictions

This section only applies to multifamily housing projects owned by the Secretary or that are subject to a mortgage held by the Secretary for which a foreclosure sale is to be held.

A property can be sold with its current project-based Section 8 contract assigned to the new owner so that contract and its requirements stay in place.

A property can be sold with tenant-based Housing Choice Vouchers (14.871) being provided to eligible tenants, which give the tenants the ability to stay on-site in units that meet HUD standards, or move to another location.

In both cases, the residents must meet the eligibility requirements of those programs, which are defined elsewhere.

A HUD-owned property may be sold with an up-front grant to assist in paying for rehabilitation or rebuilding provided funds have been appropriated by Congress.

To be eligible, in addition to the property being HUD-owned, it must have more than 50 percent of the units in the project occupied by very low- income residents at the time a disposition plan is approved by HUD, or HUD must determine it is essential, as affordable housing, to the revitalization of its community; it must be located in a housing market or submarket in which there is not sufficient habitable, affordable, rental housing, as defined in 24 CFR 290.3; it will generate, after rehabilitation or rebuilding, sufficient rental income in a competitive market to cover all operating expenses, meet after sale debt service requirements, fund required reserves and throw off positive cash flow; will provide affordable housing for at least 20 years, after the rehabilitation and/or rebuilding is completed; meets such other requirements, including deed restrictions, loan provisions, and monetary penalties for non-performance, as HUD may determine are appropriate on a case-by-case basis.

The maximum that HUD will fund per project in an up-front grant or loan is 50 percent of total development cost (TDC), or $40,000 per affordable, finished unit, whichever amount is less (not to exceed the current number of residential units in the project).

Eligibility Requirements

Applicant Eligibility

These properties can be purchased by governmental entities, private individuals, corporations, or nonprofit organizations who have the requisite qualifications and agree to abide by the conditions set by HUD for the particular property sale.

Beneficiary Eligibility

The ultimate beneficiary of those properties sold for continued use as affordable housing are low-income individuals and families.


Interested parties must file HUD form 2530, "Previous Participation Clearance Application," and certify to HUD that any properties owned by the purchaser in the same geographical area of the property being purchased meet all applicable standards and housing codes.

Aplication and Award Process

Preapplication Coordination


This program is excluded from coverage under E.O.


Application Procedures

There is no application process. Foreclosure sales are conducted on an open, oral bid process, with sealed bids also being permitted. HUD-owned properties may be purchased without competition by governmental entities. HUD can sell some properties non-competitively to nonprofits. All other HUD-owned properties are sold through a full and open competition, usually sealed bids, auctions, or a Request for Proposals. HUD maintains a mailing list of individuals and firms interested in buying these projects, and maintains a website which lists all properties currently available for sale.

Award Procedures

Properties sold at foreclosure are sold to the highest responsive and responsible bidder. HUD-owned projects may be sold to governmental entities who agree to meet HUD's requirements. Certain HUD-owned projects can be sold to nonprofits who agree to meet HUD's requirements. HUD-owned properties can be sold to the highest responsive and responsible bidder, and some are sold to the proposer with the best experience and plan for the future operation of the property.


Deadlines are established on a property-by-property basis.


National Housing Act, Section 207(k) and (l); Housing and Community Development Amendments of 1978, Section 203; Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act of 1997, Public Law 104-204; Departments of Veterans Affairs, Housing and Urban Development, Section 213, and Independent Agencies Appropriations Act of 1998, Public Law 105-65; Departments of Veterans Affairs, Housing and Urban Development, Section 206, and Independent Agencies Appropriations Act of 1999, Public Law 105-276; Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act of 2000, Public Law 106-74.

Range of Approval/Disapproval Time

Contingent upon complexity of case.




Renewals of the Section 8 are subject to the rules of the particular program. There are no renewals of Up-Front Grants.

Assistance Considerations

Formula and Matching Requirements


Length and Time Phasing of Assistance


Post Assistance Requirements


Purchaser must file, electronically, an annual financial statement to HUD audited and prepared in accordance with Generally Accepted Accounting Principals and Generally Accepted Auditing Standards.

Other reporting requirements established by Property Disposition Centers.





Financial Information

Account Identification

86-4072-0-1-371; 86-4077-0-1-371.


(Sales) FY 07 est not available; FY 08 est not available; and FY 09 est $450,000.

Range and Average of Financial Assistance

Not applicable.

Regulations, Guidelines, and Literature

Reference material can be found at website

Information Contacts

Regional or Local Office

Interested parties can contact the Multifamily Property Disposition Centers in the Atlanta and Fort Worth HUD Offices listed in Appendix IV of the Catalog.

Headquarters Office

Director, Office of Multifamily Asset Management, Department of Housing and Urban Development, Washington, DC 20410. Telephone: (202) 708-3730.

Criteria for Selecting Proposals

For the up-front grants, once HUD identifies an eligible project, the grant is made part of the sale and the project is only sold to a purchaser who has the demonstrated experience to rehabilitate/rebuild the project and maintain it as affordable housing for at least 20 years after the rehabilitation/rebuilding is completed.

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