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q. Acquiring Possession (11/10/2026)
On the date the deed is filed for recording, the Mortgagee must certify that the Property is vacant and free of Personal Property, unless HUD has agreed to accept title with the Property occupied. This, and the procedures described below, apply whether title is acquired by foreclosure or by DIL of Foreclosure.
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i. Applicable Law Protecting Tenants
When determining compliance with the Reasonable Diligence Time Frame, the Mortgagee may exclude the time required to comply with federal, state, and local laws extending the time required to complete possessory actions.
ii. Identification of Property Occupants
Before completion of foreclosure the Mortgagee must:
• confirm the identity of all occupants;
• determine each occupant’s possible rights for continued occupancy under HUD’s Occupied Conveyance procedures; and
• follow HUD’s Occupied Conveyance procedures by sending occupants the Notice to Occupant of Pending Acquisition (NOPA) 60 to 90 Days before the Mortgagee expects to acquire title.
iii. Notice to Occupant of Pending Acquisition
(A) Definition
The Notice to Occupant of Pending Acquisition (NOPA) is a notice to the Borrower and heads of household that the Mortgagee will be acquiring title to the Property and then conveying the Property to HUD.
(B) Standard
At least 60 Days but not more than 90 Days before the Mortgagee reasonably expects to acquire title, the Mortgagee must notify the Borrower and each head of household occupying a unit of the Property of the possibility that the Mortgagee will convey the Property to HUD following foreclosure. The Mortgagee is not required to postpone the foreclosure sale to comply with the 60-Day requirement, if the foreclosure sale is scheduled for less than 60 Days following the completion of bankruptcy proceedings.
In the event the foreclosure sale is postponed, the NOPA is valid up to 120 Days from the date it was originally mailed.
The NOPA must:
• provide a summary of the conditions under which continued occupancy is permissible;
• advise the Borrower:
o that potential acquisition of the Property by HUD is pending;
o that HUD requires Properties be vacant at the time of conveyance to HUD,
unless the Borrower or other occupant can meet the regulatory conditions for continued occupancy, the habitability criteria, and the eligibility criteria;
o of the process for requesting to remain in the Property; and
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o the Property must otherwise be vacated before the scheduled time of
acquisition; and
• be sent via certified mail or with a signature confirmation service to ensure receipt of the notice by all required occupants.
(C) Required Documentation
The Mortgagee must provide to HUD’s MCM by uploading into P260:
• an electronic copy of each NOPA; and
• all documentation and information obtained regarding existing leases and tenancies.
iv. Occupied Conveyance Requests to HUD
(A) Definition
An Occupied Conveyance is the conveyance to HUD of a Property that is not vacant.
(B) Standard
HUD notifies the Mortgagee if it has received an occupant’s request to remain in the Property. If the Mortgagee has not received such notification from HUD within 45 Days after sending the notice, the Mortgagee must convey the Property as vacant, unless otherwise directed by the MCM.
(C) Approved Occupied Conveyance Requests
If HUD grants Occupied Conveyance, the Mortgagee must convey the Property occupied under HUD’s Occupied Conveyance regulations and procedures provided by the MCM per 24 CFR § 203.670.
(D) Denied Occupied Conveyance Requests
If HUD denies Occupied Conveyance, the Mortgagee must determine if there is occupancy protection under federal, state, or local law that would require the Mortgagee to delay possessory action. If the Mortgagee determines that such laws are applicable, the Mortgagee must:
• follow those requirements before evicting the occupant; and
• attempt to obtain documentation of existing leases and tenancies for the Servicing File and the Claim File as evidence of the applicability of the occupancy protection laws and the additional time needed to comply with them.
v. Rents under Bona Fide Leases
The Mortgagee must attempt to:
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• collect rents payable under bona fide leases and tenancies providing post- foreclosure occupancy rights; and
• in the event of Default, take possessory action pursuant to the rental contract terms and applicable law.
The Mortgagee must reflect any rents it received during the term of the bona fide lease or tenancy on its claim for mortgage insurance benefits.
vi. Preservation and Protection Costs due to Extended Lease or Tenancy
The Mortgagee may request reimbursement of additional routine P&P costs, including lawn maintenance and inspections that are incurred as a result of an extended lease or tenancy under applicable law.
vii. Cash for Keys Consideration
(A) Definition
Cash for Keys is a monetary incentive offered to occupants for vacating the Property as an alternative to legal eviction after foreclosure.
(B) Standard
If property occupants fail to vacate the Property after receiving the first Notice to Quit, the Mortgagee may offer up to $3,000 per dwelling in exchange for the occupants vacating the Property within 30 Days of the Cash for Keys offer. Before releasing the funds, the Mortgagee must inspect the Property to ensure that:
• the Property is in Broom-swept Condition; and
• all built-in appliances and fixtures remain in the Property.
(C) Required Documentation
The Mortgagee must document in the Servicing File and the Claim File the date and amount of the Cash for Keys offer, the date of the actual vacancy, and the date the occupant received the funds.
viii. Evictions and Eviction Personnel
(A) Standard
The Mortgagee must ensure that evictions are conducted in accordance with state and local law and send:
• no more than four people for a townhouse or condominium to complete the eviction; and
• no more than six people for a Single Family detached dwelling to complete the eviction.
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(B) Required Documentation
The Mortgagee must include in the Servicing File and the Claim File:
• photographs showing that all Personal Property and debris have been removed from the Property as part of the eviction;
• the number of people required and present to complete the eviction;
• whether the eviction was canceled or re-scheduled; and
• documentation supporting reasonable and customary eviction costs, including costs due to state or local law requirements for eviction time frame, removal, or storage.