The Department of Housing and Urban Development will give nonprofits and government entities first dibs in an upcoming vacant property loan sale, giving precedence to these groups over investors.
On May 23, mission-driven entities will have priority on 50% of the loan pools secured by Home Equity Conversion Mortgages. These contain 1,237 notes, with a balance of approximately $319 million.
This is a stark difference from previous loan sales where just 10% of notes
The vacant loan sales for HECMs, which were first introduced in 2016, seek to "expand opportunities for homeownership and rental housing, and revitalize communities through encouraging the disposition of these notes in a manner that achieves mission outcomes," HUD said in a statement announcing the sale.
By giving first pick to mission-oriented bidders, HUD hopes that the properties will eventually house those who earn less than 120% of the area median family income for homeowners or less and or equal to 80% of that for renters.
The department's push to prioritize these organizations reinforces the federal government's commitment to increasing housing supply
Regarding the properties attached to the notes, no surviving borrowers or
In May 2022, the Federal Housing Administration also
"This policy change is critical as the nation continues to address the challenges of a real estate market in which home prices are high and the availability of affordable housing supply is low," said Lopa Kolluri, who at the time was the principal deputy assistant secretary for housing and the FHA, in a press release.
