[Code of Federal Regulations] [Title 24, Volume 2] [Revised as of April 1, 2002] From the U.S. Government Printing Office via GPO Access [CITE: 24CFR291.100] [Page 493-495] TITLE 24--HOUSING AND URBAN DEVELOPMENT CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PART 291--DISPOSITION OF HUD-ACQUIRED SINGLE FAMILY PROPERTY--Table of Contents Subpart B--Disposition by Sale Sec. 291.100 General policy. For all sales, except as otherwise specifically indicated, those sales conducted in accordance with Secs. 291.90(a) and 291.200 or with subpart D of this part, the following general policies apply: (a) Qualified purchaser. (1) Anyone, including a purchaser from a transferor of a property pursuant to Secs. 291.90(a) and 291.200, regardless of race, color, religion, sex, national origin, familial status, age, or disability may offer to buy a HUD-owned property, except that: (i) No member of or delegate to Congress is eligible to buy or benefit from a purchase of a HUD-owned property; and (ii) No nonoccupant mortgagor (whether an original mortgagor, assumptor, or a person who purchased ``subject to'') of an insured mortgage who has defaulted, thereby causing HUD to pay an insurance claim on the mortgage, is eligible to repurchase the same property. (2) Neither HUD nor any transferor pursuant to Secs. 291.90(a) or 291.200 will offer former mortgagors in occupancy who have defaulted on the mortgage [[Page 494]] the right of first refusal to repurchase the same property. (3) HUD will offer tenants accepted under the occupied conveyance procedures outlined in 24 CFR 203.670 through 203.685 the right of first refusal to purchase the property only if: (i) The tenant has a recognized ability to acquire financing and a good rent-paying history, and has made a request to HUD to be offered the right of first refusal; or (ii) State or local law requires that tenants be offered the right of first refusal. (b) List price. The list price, or ``asking price,'' assigned to the property is based upon an appraisal conducted by an independent real estate appraiser using nationally recognized industry standards for the appraisal of residential property. (c) Insurance. Properties may be sold under the following programs: (1) Insured. A property that meets the Minimum Property Standards (MPS), as determined by the Secretary, for existing dwellings (Requirements for Existing Housing, One to Four Family Living Units, HUD Handbook 4905.1, which is available at the Department of Housing and Urban Development, HUD Customer Service Center, 451 7th Street, SW, Room B-100, Washington, DC 20410; by calling (202) 708-3151; or via the Internet at www.hud.gov) will be offered for sale in ``as-is'' condition with FHA mortgage insurance available. Flood insurance must be obtained and maintained as provided in 24 CFR 203.16a. (2) Insured with repair escrow. A property that requires no more than $5,000 for repairs to meet the MPS, as determined by the Secretary, will be offered for sale in ``as-is'' condition with FHA mortgage insurance available, provided the mortgagor establishes a cash escrow to ensure the completion of the required repairs. (3) Uninsured. A property that fails to qualify under either paragraph (c)(1) or (c)(2) of this section will be offered for sale either in ``as-is'' condition without mortgage insurance available, or in ``as-is'' condition under section 203(k) of the National Housing Act (12 U.S.C. 1709(k)). (d) Financing. (1) Except as provided in paragraph (d)(2) of this section, the purchaser is entirely responsible for obtaining financing for purchasing a property. (2) HUD, in its sole discretion, may take back purchase money mortgages (PMMs) on property purchased by governmental entities or private nonprofit organizations who buy property for ultimate resale to owner-occupant purchasers with incomes at or below 115 percent of the area median income. When offered by HUD, a PMM will be available in an amount determined by the Secretary to be appropriate, at market rate interest, for a period not to exceed 5 years. Mortgagors must meet FHA mortgage credit standards. (3) Purchase money mortgage (PMM). For purposes of this section, the term ``purchase money mortgage,'' or PMM means a note secured by a mortgage or trust deed given by a buyer, as mortgagor, to the seller, as mortgagee, as part of the purchase price of the real estate. (e) Environmental requirements and standards. Sales under this part are subject to the environmental requirements and standards described in 24 CFR part 50, as applicable. (f) [Reserved] (g) Lead-based paint poisoning prevention. Properties constructed before 1978 are subject to the requirements of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead- Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing regulations at part 35, subparts A, B, F, and R, of this title. (h) Listings. Any real estate broker who has agreed to comply with HUD requirements may participate in the sales program. Purchasers participating in the competitive sales program, except government entities and nonprofit organizations, must submit bids through a participating broker. (1) Open listings. Except as provided in paragraph (h)(2) of this section, properties are sold on an open listing basis with participating real estate brokers. (2) Asset management and listing contracts. (i) A local HUD office may invite [[Page 495]] firms experienced in property management to compete for contracts that provide for an exclusive right to manage and list specified properties in a given area. (ii) In areas where a broker has an exclusive right to list properties, a purchaser may use a broker of his or her choice. The purchaser's broker must submit the bid to HUD through the exclusive broker. [64 FR 6480, Feb. 9, 1999, as amended at 64 FR 50225, Sept. 15, 1999]