source:
  type: regulation
  id: hud-4000-1-iii-a-2-j
  authority: HUD Handbook 4000.1 III.A.2.j — Home Disposition Options
  description: 'HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.j.

    See obligation entries for operative requirements and verbatim

    primary-source citations.

    '
obligations:
- id: hud-4000-1-iii-a-2-j-full
  canonical_id: hud-4000-1-iii-a-2-j-full
  section: HUD Handbook 4000.1 III.A.2.j
  description: "Home Disposition Options: j. Home Disposition Options (12/30/2025) \nThe Mortgagee must\
    \ review Borrowers for Home Disposition Options who are unable to \nsustain the Mortgage with the\
    \ assistance of a Loss Mitigation Home Retention Option. \n\n \nThe Home Disposition Options include:\
    \ \n• Pre-Foreclosure Sale (PFS); and \n• Deed-in-L…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 III.A.2.j.i — Standard
    source_class: hud-handbook-4000-1
    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: "j. Home Disposition Options (12/30/2025) \nThe Mortgagee must review Borrowers for\
      \ Home Disposition Options who are unable to \nsustain the Mortgage with the assistance of a Loss\
      \ Mitigation Home Retention Option. \n\n \nThe Home Disposition Options include: \n• Pre-Foreclosure\
      \ Sale (PFS); and \n• Deed-in-Lieu (DIL). \nThe Mortgagee must notify the Borrower that they may\
      \ be able to avoid foreclosure by \nselling their home with a traditional sale or a PFS Option.\
      \ \nIf the Borrower advises that their financial situation has improved during the PFS or DIL \n\
      process and wants to retain the Property, the Mortgagee must review the Borrower for \none additional\
      \ Loss Mitigation Home Retention Option. \nii. Pre-Foreclosure Sales \nA Pre-Foreclosure Sale (PFS),\
      \ also known as a Short Sale, refers to the sale of real \nestate that generates proceeds that are\
      \ less than the amount owed on the Property and \nin which the lien holders agree to release their\
      \ liens and forgive the deficiency \nbalance on the real estate. There are two PFS Options: \n•\
      \ Standard PFS; and \n• PFS for Servicemembers. \n(B) Requirements for all PFS Options \n(1) PFS\
      \ Outreach Requirements \n(a) Form HUD-90035, Information Sheet: Pre-foreclosure Sale Procedure\
      \ \nWhen the Mortgagee has identified a Borrower as a qualified candidate for a \nPFS or a Borrower\
      \ has expressed an interest in participating, the Mortgagee \nmust provide to the Borrower, electronically\
      \ or by mail, form HUD-90035, \nInformation Sheet: Pre-foreclosure Sale Procedure, adding its toll-free\
      \ or \ncollect telephone number to the form. \n(b) Disclosure Requirements for PFS Transactions\
      \ \nPrior to approving the Borrower for the PFS Option, the Mortgagee must \nnotify the Borrower\
      \ of the following in writing: \n• The Mortgage must be three or more full monthly payment due and\
      \ \nunpaid (61 Days or more past due) on the date the Mortgagee approves \nthe Borrower’s participation\
      \ in a Standard PFS. \n• On the date the PFS for Servicemembers transaction closes, the \nMortgage\
      \ must be in Default status (minimum 31 Days Delinquent). \n• Until the PFS transaction has closed,\
      \ the Borrower must maintain the \nProperty in “ready to show” condition, make basic property repairs,\
      \ \nand perform all normal property maintenance activities (e.g., interior \ncleaning, lawn maintenance,\
      \ etc.)."
    drafter_attestation: Verbatim section from snapshot 8c03836f77f317e1; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
