U.S. Department of Housing and Urban Development

Office of Housing

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Special Attention of: Notice H 93-6 (HUD)

Regional Administrators Issued: 1/19/93

AH Regional Directors of Expires: 1/31/94

CPD and Housing
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All Field Office Managers Cross References: 57 FR 1592 (Jan. 14, 1992)

All CPD Directors Memorandum of Agreement

All Chief Property Officers effective Nov. 9, 1992

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Subject: Sale of HUD Owned Properties to HOPE 3 Grant Recipients

This Notice implements the Memorandum of Agreement signed

between CPD and Housing which establishes the framework for the

coordination of the sale of HUD-owned single family properties to

HOPE 3 grant recipients. The HOPE 3 Program provides grants to

private nonprofit organizations, public agencies, and cooperative

associations to develop affordable homeownership opportunities

for low-income buyers utilizing properties owned by HUD, DVA, the

RTC, and any other Federal agency, as well as State or local

governments. HOPE 3, a program which replaced Urban Homesteading

and the Section 312 Rehabilitation Loan Programs, has the

potential to be a significant sales resource for HUD properties

nationwide.

Property Listings for Potential Applicants

Upon request, the local HUD Office will make available to

any HOPE 3 applicant, at least monthly, a list of single family

properties owned by HUD and located within the ZIP code area(s)

where the applicant is proposing a HOPE 3 program. This list is

available by accessing the SAMS Ad Hoc subsystems screen and

requesting report #2152D.

HOPE 3 Property Acquisition Process

A. CPD Responsibilities: After a HOPE 3 grant agreement

has been signed by both HUD and the recipient, the CPD

HOPE 3 Coordinator in each HUD Office will provide the

appropriate Chief Property Officer (CPO) with a list of

HOPE 3 grant recipients who wish to receive property

reports. The list of grantees will include names of

contact persons, the address and telephone number of

each agency (including a fax number, if available) and

a list of areas by ZIP code where the grant recipient

is interested in purchasing HUD-owned properties. The

CPD HOPE 3 Coordinator will provide instructions to

each grant recipient describing how to use the property

report and the procedures for acquiring HUD properties.

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HSIP : Distribution : W-3-1, W-2(OGC)(H)(Z), W-3(A)(H)(ZAOO),

W-4(H), R-1, R-2, R-3, R-3-1(H)(CPD)(RC), R-3-2, R-3-3, R-6, R-6-1,
R-6-2,

R-7, R-7-1, R-7-2, R-8, R-8-l

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Finally, the CPD HOPE 3 Coordinator will notify

appropriate CPOs in writing when each grant recipient

has exhausted its HOPE 3 acquisition resources.

B. Housing Responsibilities: The CPO, or designee,

prepares a list of HUD properties which have an

approved disposition program but are not yet listed for

sale (SAMS Processing Steps 3 through 5) by designated

ZIP code area(s) for each HOPE 3 grantee at least

monthly. This property list shall be prepared by

accessing the Ad Hoc subsystem in SAMS and requesting

report #2152D. The report has been specifically

designed for this purpose. It provides information

automatically, where available, about property address,

list price, number of bedrooms, square footage, whether

the property is HUD insurable, and the type of

property. After six months, property lists will

continue to be provided to a grantee only if it has

purchased a HUD property in that timeframe, or if

extenuating circumstances prevented a purchase, such as

a HUD delay in funds\' distribution.

Property Transfer Procedures

A. Within five calendar days of receipt of the property

list, the HOPE 3 grantee will notify the CPO, or

designee, by telephone to indicate preliminarily which

specific properties it may be interested in purchasing.

(See special instructions in Attachment A for

processing these cases in SAMS.) All other properties

on the list will continue to be processed for sale

using standard procedures. A HOPE 3 grantee then has

an additional 10 calendar days to exercise a right of

first refusal on the properties which it initially

designated as potential purchases. These properties

will be held off market for the balance of the 15 day

period. (The 15 day period begins when the HOPE 3

grantee receives the property list. If notification is

by mail, the 15 day period begins 5 days after dispatch

by the CPO. If the list is hand delivered or faxed,

the 15 day period begins immediately.) A right of

first refusal will be deemed to have been exercised if

the CPO receives a written notice, by the date

specified, of good faith intent to purchase a property.

In the interest of time, grantees should be encouraged

to fax their property selections to the CPO when

possible. If more than one agency expresses an

interest in the same property, the first to offer a

signed sales contract shall be the buyer.

B. Sales contracts (Form HUD 9548) should be executed

within 15 days of transmitting a written notice of

intent to purchase a property by the HOPE 3 grantee.

C. HOPE 3 grantees shall be provided a 10 percent discount

on cash \"as is\" price.

D. Closings are expected to occur within 60 days, or less,

of executing a sales contract. In the event a

scheduled closing cannot be held, extension periods

will be granted in 15 day increments only. The grantee

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must submit a written request to the CPO for an

extension of the closing date, accompanied by a

non-refundable fee per property of not less than \$10 per

day, and not more than \$25 per day, as currently

established by the CPO for all sales. The HOPE 3

agency will be credited for any unused portion of the

extension period at closing.

E. If HUD experiences repeated delays in scheduled

closings with a HOPE 3 grantee, the CPO may decline to

grant extensions on future scheduled closings and place

properties earmarked for that grantee on the market.

Alternatively, the CPO may require an earnest money

deposit of \$500 per property on future transactions, if

a recipient repeatedly fails to close in a timely

manner on properties which have been held off market on

their behalf. The deposit shall be subject to

forfeiture on the same basis as other sales which fail

to close within the contract timeframe, including

approved extensions.

F. If a HOPE 3 grantee wishes to purchase properties that

have already been listed for sale, then it will be

treated like any other purchaser. An offer from the

HOPE 3 agency will be considered along with other

offers received. If successful as high net bidder, the

HOPE 3 agency will receive a 10 percent discount off

the cash \"as is\" price.

Miscellaneous Requirements

A. No real estate broker will be used, and no sales

commission will be paid, in HOPE 3 sales.

B. HOPE 3 agencies will utilize HUD closing agents.

C. HUD will not pay any closing costs associated with the

purchase except for HUD\'s closing agent\'s fee.

D. Property taxes will be prorated to the date of closing

between HUD and the HOPE 3 grantee. HUD Field Offices

will not transfer a property for which HUD is not

reimbursed at closing for prepaid property taxes.

E. All sales are for cash only and on an \"as is\" basis.

\"Table funding\" is required, as with all HUD sales;

i.e. payment is due at closing.

F. HUD\'s standard special warranty deed shall be

applicable.

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Arthur J. Hill Russell K. Paul

Assistant Secretary for Housing Acting Assistant Secretary

-Federal Housing Commissioner for CPD

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APPENDIX 1

ATTACHMENT:\_\_\_\_

CODING HOPE 3 PROPERTIES IN SAMS

A. Those properties which are included in the list of

properties provided to the HOPE 3 grantee are not to be

listed for sale until the expiration of the five (5)

day period, which commences upon receipt of property

list by the HOPE 3 grantee. Additionally, these cases

should not be Held Off the Market. All other

properties that are not within the grantee\'s specified

ZIP code area(s) should be programmed for sale as

usual.

B. Upon notification by the HOPE 3 grantee that they are

preliminarily interested in a specific property, the

CPO shall re-program the property as Held Off The

Market \"HOM Code 10\". If the ten (10) day \"first right

of refusal\" period has expired and the grantee fails to

submit a \"written notice of intent to purchase\", the

CPO must mark the case for reanalysis (CM-DS-WR) and

re-program the property in the usual manner.

C. Upon receipt of the \"written notice of intent to

purchase\", the CPO will mark the case for reanalysis

(CM-DS-WR) and re-program it for Direct Sale, Type \"P\".

Upon receipt of the HUD Contract (Form HUD 9548) the

CPO shall code the contract information into the

CM-DS-OA screen as usual.

D. Since the HOPE 3 grantee does not use a selling broker

and no sales commission will be paid by HUD, the Field

Office generic Selling Broker code must be used in

coding the contract information into the CM-DS-OA

screen.

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APPENDIX 2

HOPE 3 Coordinators PAGE 1 OF 2

As of: December 14, 1992

REGIONAL OFFICES FTS FIELD OFFICES HOPE 3 COORDINATORS

I BOSTON 617-565-5342 Boston (Regional) Frank Del Vecchio

617-565-5357 Boston James Phieffer

603-666-7640 Manchester David LaFond

203-240-4508 Hartford Daniel Kolesar

II NEW YORK 212-264-5135 New York (Regional) Susan Horowitz

212-264-5027 New York Anthony Magri

716-846-4202 Buffalo Harold Cole

201-877-1752 Newark Lucille Spada

III PHILADELPHIA 215-597-2530 Philadelphia (Regional) Michael Fallon

215-597-1827 Philadelphia Edwin Bramble

301-962-3718 Baltimore Ann Schenning

412-644-5485 Pittsburgh John Brennan

804-771-2853 Richmond Bill Burnham

202-275-0994 Washington, DC Bobbie Denson

IV ATLANTA 404-331-4092 Atlanta (Regional) Robert Barnett

404-331-4005 Atlanta Susan Brooke

205-290-7672 Birmingham Dale Richards

809-766-5883 Caribbean Elinson Acosta

803-765-5641 Columbia Jack Sober

919-547-4006 Greensboro Gary Dimmick

601-965-4765 Jackson Lou Morris

904-232-1202 Jacksonville Nick Sotriopoulos

615-549-9432 Knoxville Mary Griffeth

502-582-6141 Louisville Sandy Frye

V CHICAGO 312-886-7351 Chicago (Regional) Victor Thornton

312-886-0119 Chicago Robert Berlan

614-469-5557 Columbus Phillip Braman/

Gretchen Garland

313-226-7194 Detroit Ken Kiihr

317-226-6132 Indianapolis Julia Beverly

612-370-3025 Minneapolis Doug Olson

414-297-1255 Milwaukee John Maxwell

VI FORT WORTH 817-885-2714 Fort Worth (Regional) Gayla Frazier

817-885-5783 Fort Worth (NM/W.-C.) Melodee Humbert

817-885-5887 Fort Worth (East/South) Will Williamson

501-324-6375 Little Rock Danny Carter

504-589-7213 New Orleans Aaron Johnson

405-231-4973 Oklahoma City Ivan Wisely

405-231-5968 Oklahoma City Gale Swanson

(Indian P.)

210-229-6820 San Antonio Phillip Aguirri

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APPENDIX 2

PAGE 2 OF 2

HOPE 3 Coordinators

REGIONAL OFFICE FTS FIELD OFFICES HOPE 3 COORDINATORS

VII KANSAS CITY 913-236-2184 Kansas City (Regional) Bill Boyd

913-236-2187 Kansas City Greg Harris

402-492-3145 Omaha Reggie Robinson

314-539-6532 St. Louis Allan Howard

VIII DENVER 303-844-4018 Denver (Regional) Sharon Jewell

IX SAN FRANCISCO 415-556-3317 San Francisco Gary Hanes

(Regional)

213-251-7239 Los Angeles Mary L. Samaniego/

213-251-7268 Los Angeles Mary Ann Soos

602-379-4754 Phoenix Diane Domzalski

808-541-1327 Honolulu Frank Johnson

X SEATTLE 206-553-0374 Seattle (Regional) John Epler

206-553-0374 Seattle Kaycie Collins

503-326-7018 Portland Cheryl Vezey

903-271-4665 Anchorage Colleen Craig/

Alfred Heston

A:Disk#2

\* U.S. G.P.O.:1993-342-362:80017