NSP FAQ
Q

How do the tenant protections requirements apply to short sale purchases under NSP?

Date Published: October 2012

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The tenant protection requirements directly affect initial successors in interest (ISII) who take title to property through foreclosure. Typically, the ISII in a property acquired through foreclosure is the successful purchaser at foreclosure, such as the lender or trustee for holders of obligations secured by mortgage liens. The NSP definition of foreclosed property includes initiation of the foreclosure process, as well as the end outcome resulting in the transfer of title to an ISII. Therefore, when an NSP grantee purchases a foreclosed rental property directly from the mortgagor via a short sale, the grantee may become the ISII. In these cases, the grantee must comply with NSP tenant protection requirements. See the NSP Policy Alert Guidance on the Impact of New Definitions for NSP-Eligible Properties.

Note: Relocation and tenant protection can be a difficult subject for many grantees and mistakes can lead to costly findings. It is recommended that grantees contact their regional relocation specialist or HUD field office for guidance.


Tags: NSP Program Requirements - Tenant Rights and Tenant Protections

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FAQ ID:

974