source:
  type: guide
  id: hud-4000-1-iii-e-sale-of-property-acquired-through-foreclosure-or-dil
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — e. Sale
    of Property Acquired through Foreclosure or DIL (04/29/2024)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — e. Sale
    of Property Acquired through Foreclosure or DIL (04/29/2024).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-e-sale-of-property-acquired-through-foreclosure-or-dil-full
  canonical_id: hud-4000-1-iii-e-sale-of-property-acquired-through-foreclosure-or-dil-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — e. Sale of
    Property Acquired through Foreclosure or DIL (04/29/2024)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — e. Sale
      of Property Acquired through Foreclosure or DIL (04/29/2024)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'e. Sale of Property Acquired through Foreclosure or DIL (04/29/2024)
      Where the Mortgagee intends to submit an Acquired Property Claim (Claim Type
      21), the Mortgagee must: • take possession of the Property; • preserve and protect
      the Property in accordance with Appendix 7.0; and • make a diligent effort to
      sell the Property within six months from the date the Mortgagee acquired the
      Property, or within such additional time as provided by HUD. The Mortgagee must
      sell the Property for an amount no less than the current appraised value unless
      the Mortgagee obtains written permission from HUD authorizing a sale at a lower
      price. i. Repairs The Mortgagee must repair the Property only to the extent
      the repairs do not exceed those required: • by local law; or • by HUD or the
      Department of Veterans Affairs (VA), if the sale of the Property is being financed
      using an FHA-insured or VA-guaranteed mortgage. The Mortgagee must not make
      any other repairs without specific advance approval from HUD. The Mortgagee
      must submit an over-allowable request using the appropriate timeline in HERMIT.
      ii. Closing Costs For case numbers assigned on or after September 19, 2017,
      the Mortgagee may be reimbursed for allowable closing costs associated with
      the sale of the Property in an amount not to exceed 11 percent of the sales
      price. Allowable closing costs may include: • a sales commission at a rate customarily
      paid in the community; and • other reasonable and customary expenses incurred
      in connection with the sale of the Property. iii. Prohibited Conflicts of Interest
      The Mortgagee must not enter into a contract for the preservation, repair, or
      sale of the Property with any: III. SERVICING AND LOSS MITIGATION B. Title II
      Insured Housing Programs Reverse Mortgages 2. Default Servicing Handbook 4000.1
      1511 Last Revised: 11/26/2025 • officer, employee, or owner of 10 percent or
      more interest in the Mortgagee; • other person or organization having an Identity
      of Interest with the Mortgagee; or • Family Member of such officer, employee,
      owner, or person.'
  judgment: false
