Surplus Property Utilization

To convey or lease all surplus Federal real properties made available by the disposal agency which are needed and usable by eligible organizations and institutions to carry out health programs.

Related Programs

Examples of Funded Projects

Land and buildings are provided for hospitals, clinics, public health administration, water and sewer system development, facilities to assist homeless individuals, and rehabilitation programs.

Agency - Department of Health and Human Services

The Department of Health and Human Services is the Federal government's principal agency for protecting the health of all Americans and providing essential human services, especially to those who are least able to help themselves.

Website Address

Program Accomplishments

During fiscal year 2007, Federal surplus real property having an acquisition cost of $28,520,377 was transferred for public health purposes. This represents 8 transfers of 45.230 acres of land and 8 buildings. It is estimated that over $4,000,000 in real property will be transferred in fiscal year 2008 for public health purposes.

Uses and Use Restrictions

Real property must be used for eligible health purposes including research.

It may consist of land with or without buildings and other improvements or buildings only.

A discount of up to 100 percent based on the proposed-use program is granted.

This discount applied against the fair value of the property, is earned by approved use over a prescribed period of 30 years for land with or without improvements, and a lesser time for leased facilities and improvements which are sold without land.

Allowance of less than 100 percent requires payment of the difference in cash at the time of conveyance.

Property must be used for the purpose for which conveyed, and may not be sold, leased, mortgaged, or encumbered without consent of the Department.

Eligibility Requirements

Applicant Eligibility

States, their political subdivisions and instrumentalities; tax-supported public health institutions, and nonprofit institutions which (except for institutions which lease property to assist the homeless under Title V of Public Law 100-77) have been held exempt from taxation under Section 501 (c) (3) of the 1986 Internal Revenue Code.

Beneficiary Eligibility

Anyone attending, working with or for, or served by the eligible applicants. Examples of potentially eligible use programs are hospitals, public health clinics, water and sewer systems, institutions for the rehabilitation of mentally or physically handicapped, health research institutions, homeless assistance facilities, and other institutions with basic health programs.


Applicants must demonstrate current need for properties they request and the ability to carry out the proposed program.

Aplication and Award Process

Preapplication Coordination

Notice of availability of surplus real property is sent by the Division of Property Management, Program Support Center (PSC), Department of Health and Human Services (DHHS), to all known potentially interested institutions.

When applying for real property, an informal preapplication conference either in person or by telephone is recommended.

At that time, consultation and assistance are available to aid in the preparation of an application.

Applicants are required to submit factors for consideration of potential environmental impact, in accordance with the Environmental Questionnaire furnished with the application instructions.

This program is excluded from coverage under E.O.


Application Procedures

Applicants interested in acquiring Federal real properties must contact the Division of Property Management, PSC, DHHS.

Award Procedures

Real property is awarded to the applicant whose programs of use are determined to be in the highest public interest. Land (with or without improvements) is conveyed by quitclaim deed or lease; buildings for off-site removal are by agreement of sale.


Any organization interested in acquiring real property must notify the Division of Property Management, PSC, DHHS, within 15 days after notice of availability, or in the case of acquiring properties for homeless purposes, within 60 days after publication by Department of Housing and Urban Development in the Federal Register.


Federal Property and Administrative Services Act of 1949, Section 203(k), Public Law 81-152, 40 U.S.C. 484, as amended; Stewart B. McKinney Homeless Assistance Act of 1987, as amended, 104 Stat. 4673.

Range of Approval/Disapproval Time

Normally, approval or disapproval is made within 30 days after an application has been submitted for real property. For properties to assist homeless individuals under Title V of the McKinney Act, approval or disapproval is made 25 days after a complete application is received.


An applicant may appeal a decision to the Division of Property Management, PSC, DHHS.



Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula or matching requirements.

Length and Time Phasing of Assistance

Deed restrictions run for a period of 30 years and Agreements of Sale are normally for 5 years, after which the transferee has clear title to the property. Restrictions on leased property run for the period of the lease.

Post Assistance Requirements


Transferees/lessees are required to make an annual utilization report to the Division of Property Management, PSC, DHHS, and the property is also visited by Division of Property Management personnel.


The Department's Audit agency makes periodic audits of the headquarters operation and may make spot checks of the utilization by real property transferees.


Transferees of real property, who expend funds to rebuild, refurbish, or to otherwise improve property under restrictions, should maintain records of these costs in the event they wish to dispose of the property prior to termination of the restriction period.

Financial Information

Account Identification



(Salaries and Expenses) FY 07 $454,184; FY 08 est $394,129; and FY 09 est $439,608.

Range and Average of Financial Assistance


Regulations, Guidelines, and Literature

Title 45, Subtitle A, Part 12, Disposal and Utilization of Surplus Real Property for Public Health Purposes. Literature: The following pamphlet is available from the Division of Property Management: "How to Acquire Federal Surplus Real Property for Public Health Purposes," at no charge.

Information Contacts

Regional or Local Office


Headquarters Office

Director, Division of Property Management, Program Support Center, Department of Health and Human Services, Parklawn Building, Room 5B-17, 5600 Fishers Lane, Rockville, MD 20857. Telephone: (301) 443-2265. Fax: (301) 443-0084. E-Mail:

Criteria for Selecting Proposals

All applications must establish eligibility of the institution, its programs, and the proposed use to meet the program needs. A public benefit allowance formula, uniformly applied, determines the respective benefits of each program. Basic allowance of 50 percent is allowed to institutions meeting the following: (1) Proof of current need; (2) ability to operate and maintain; (3) suitability of facilities or adaptability for conversion; (4) requirement for utilization through period of restrictions; and (5) nondiscrimination because of race, color, sex, age, handicap, or national origin. Additional allowances are made for tax support, accreditation, hardship, integrated research, outpatient services, public services, and training programs. For competing programs, the one showing the greatest public benefit is selected. Where property can be divided, as many compatible programs as possible are accommodated.

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