FHA Shortens Exclusive Sales Periods for Foreclosed Properties

On April 28, 2025, FHA published Mortgagee Letter 2025-13 revising policies related to foreclosed property sales. The letter rescinds previous policies established in 2022 by removing the 30-day exclusive sales period for owner-occupants, HUD-approved nonprofits, and government entities in the Claims without Conveyance of Title (CWCOT) process. It also reverts the HUD HomeStore exclusive listing period for REO properties from 30 days back to 15 days for these same groups. According to FHA, these changes were made after evaluation showed the policies were not meeting their intended goals and were leading to sales delays and increased costs.

For real estate agents and their clients, this means potential owner-occupant families now have less time to secure financing and make decisions on foreclosed properties, while investors gain quicker access to this inventory.

Implementation begins immediately for CWCOT provisions, with full implementation required by May 30, 2025. The REO provisions must be implemented for properties listed on or after May 30, 2025. All updates will be incorporated into a forthcoming update of the FHA Single Family Housing Policy Handbook.

NAR will continue to monitor these developments and the effects on housing affordability and housing access for all potential borrowers.