source:
  type: guide
  id: hud-4000-1-iv-k-sale-of-the-repossessed-home
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part IV — k. Sale of
    the Repossessed Home (05/09/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part IV — k. Sale
    of the Repossessed Home (05/09/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iv-k-sale-of-the-repossessed-home-full
  canonical_id: hud-4000-1-iv-k-sale-of-the-repossessed-home-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part IV — k. Sale of
    the Repossessed Home (05/09/2022)
  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 IV — k. Sale
      of the Repossessed Home (05/09/2022)
    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: 'k. Sale of the Repossessed Home (05/09/2022) The Manufactured
      Home must be sold to a third party and the sale must be evidenced by a sales
      contract. The Manufactured Home must be sold in a commercially acceptable manner,
      including all legally required notifications to the Borrower(s). i. Best Price
      Obtainable When the Lender obtains title to the Property securing a Manufactured
      Home Loan through repossession or foreclosure, the Property must be sold for
      the best price obtainable before submitting an insurance claim. (A) Definition
      The Best Price Obtainable refers to the greater of: • the actual sales price
      of the Property, after deducting the cost of o repairs to make the home habitable,
      o cleaning and reconditioning, o upgrades to the home requested by a buyer,
      o making home furnishings, and equipment needed to make the Property marketable,
      and o transportation, set-up, and anchoring if the Manufactured Home is moved
      to a new home site; or • the appraised value of the Property before repairs
      (as determined by a HUD- approved appraisal obtained in accordance with Appraiser
      and Property Requirements for Title I Loans. (B) Standard A Lender’s objective
      in selling the Manufactured Home is to obtain the maximum net return in order
      to minimize the loss to HUD and to the Lender, and to minimize the deficiency
      amount that will be owed by the Borrower. The Lender should attempt to sell
      the home for a net sales price of no less than the retail appraised value of
      the home. A Lender may sell a home for less than the retail appraised value,
      but HUD’s calculation of the insurance claim payment will be based on the best
      price obtainable. ii. Cost to Make the Manufactured Home Marketable Any expense
      paid to a third party to facilitate a sale by making the home marketable must
      be documented in the case binder. A receipt must be legible and detailed to
      identify the unit, Borrower, date, amount, purpose, and parties involved in
      the transaction. Items may include the cost of repairs, furnishings, transportation,
      and set-up. Any expense dated after the resale date will not be eligible for
      eventual insurance claim reimbursement. IV. CLAIMS AND DISPOSITION D. Title
      I Disposition 2. Property Disposition of Manufactured Homes Handbook 4000.1
      1691 Last Revised: 11/26/2025 iii. Extra Items Sold with the Repossessed Manufactured
      Home If a Lender sells an extra item in addition to the repossessed Manufactured
      Home to induce the sale, the extra item must be itemized on the sales contract
      and a value provided. This will allow the deduction of the item (i.e., a new
      washer and dryer, when none existed before) from the sales price to arrive at
      the sale value of the repossessed Manufactured Home for the purpose of claim
      calculation. iv. Sales Commission The amount of a sales commission paid to a
      third party must be documented in the case binder. Determination of whether
      the Manufactured Home was sold on- or off-site must be part of the documentation.
      Note that HUD limits the amount of Sales Commission that can be included in
      its calculation of the Lender’s claim payment. v. Enforceable Note The Lender
      must service the Loan in a manner that will preserve a post-repossession resale
      deficiency, where state law allows. If necessary, a Lender may obtain a Judgment
      against the Borrower to establish enforceability. vi. Lender Responsibility
      While Insurance Claim is Pending If an insurance claim is pending payment, a
      Lender must not pursue active collections against the Borrower, but should take
      all steps necessary to protect the interests of HUD and the Lender. vii. Legal
      Notices The Lender is responsible for answering legal notices (e.g., bankruptcy)
      and forwarding the information to the FOC. viii. Borrower Payment before Claim
      Payment If a Borrower sends a payment while an insurance claim is pending, the
      Lender may either amend its form HUD-637, Title I Claim for Loss, or request
      that claim payment be expedited so that the payment can be forwarded to HUD.
      ix. Prohibition against Coinsurance Recovery The Lender must not attempt to
      collect money from the Borrower, including the coinsurance loss, after a claim
      is paid. Since the loan Note is assigned to the United States, the Lender has
      no basis from which to make demand upon a Borrower. x. Borrower Payment after
      Claim Payment All payments received by a Lender after claim payment must be
      promptly transmitted to the FOC. V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE
      A. Quality Control of Lenders and Mortgagees 1. Quality Control Program Overview
      Handbook 4000.1 1692 Last Revised: 11/26/2025 V. QUALITY CONTROL, OVERSIGHT,
      AND COMPLIANCE The Quality Control, Oversight, and Compliance section in this
      FHA Single Family Housing Policy Handbook (Handbook 4000.1) covers quality control
      requirements, Federal Housing Administration (FHA) monitoring of Mortgagees,
      and enforcement actions FHA may take if its requirements are violated. This
      section covers Title I Lenders, Title II Mortgagees, and other FHA program participants.
      The term “Mortgagee” is used throughout for all types of FHA approval (both
      Title II Mortgagees and Title I Lenders) and the term “Mortgage” is used for
      all products (both Title II Mortgages and Title I Loans), unless otherwise specified.
      A Mortgagee must fully comply with all of the following requirements in order
      to participate in the origination, underwriting, closing, endorsement, servicing,
      purchasing, holding, or selling of FHA-insured Title I or Title II Mortgages.
      If there are any exceptions or program-specific requirements that differ from
      those set forth below, the exceptions or alternative program requirements are
      explicitly stated or hyperlinked to the appropriate guidance. Terms and acronyms
      used in this Handbook 4000.1 have their meanings defined in the Glossary and
      Acronyms and in the specific section of Handbook 4000.1 in which the definitions
      are located. A. QUALITY CONTROL OF LENDERS AND MORTGAGEES 1. Quality Control
      Program Overview'
  judgment: false
