Inventory Alert: HUD announces bids for vacant property note sales

this Ministry of Housing and Urban-Rural Development Announcing the upcoming sale of a vacant loan secured by a home equity conversion mortgage.

HVLS 2024-2 will be tendered on May 7 and consists of approximately 1,265 notes with a loan balance of nearly $346 million.The sale includes residential loans due and payable guaranteed by First Lien HECMThe borrower and non-borrowing spouse are now deceased, according to an announcement from HUD’s Office of Asset Sales.

Nonprofit organizations, government agencies and for-profit businesses are eligible to participate in the sale. HUD will also consider bids from joint ventures and other partnerships between the businesses.

HUD vacant loan sales were first launched in 2016 to help increase supply through asset dispositions. Sometimes, up to 50% of loans are prioritized to nonprofit and governmental organizations that wish to provide housing, including homeownership opportunities, to residents earning less than 120% of the area median income. Unlike previous HVLS auctions, there is no mention of designated allocations for specific groups of buyers in the latest announcement.

HUD reported late last year that nonprofits had purchased 28% of all HVLS loans for sale since the program’s inception, with a total of 10,280 closed loans through the first half of 2023.

About 52% of the loans sold through HVLS come from 10 states. Florida topped the list with 13%, and Texas came in second with 7%. California, Illinois and New York follow closely, each accounting for 5%.

The latest sales come amid rising housing affordability and inventory issues in the public consciousness. President Biden makes nation’s housing situation a key topic in his recent State of the Union address. Building more housing has been a focus of the Biden administration’s Housing Action Plan, first announced a year ago. Freddie Mac estimates that by the end of 2020, the United States will be short of 3.8 million housing units to fully meet housing demand. meet needs.

HECM is an FHA-backed product available to homeowners age 62 or older. Allowing older borrowers to tap into home equity With age, when the balance reaches 98% of the maximum claim amount, the agency is assigned to HUD from the previous servicer. Rather than foreclosing on a home when a borrower dies, the agency sells the loans to avoid disposal costs and help the real estate industry generate supply.

American Financial is currently the top HECM in the country According to data from Reverse Market Insight, Mutual of Omaha Mortgage ranks second, accounting for approximately 22% of total transaction volume.

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