Selling or otherwise disposing of a CoC-funded project site before the 15-year mark requires HUD's terms preventing undue benefit, unless one of four exceptions is met

coc.disposition_and_transfer.undue_benefit_on_disposition_before_the_fifteenth_year · v1.0.0

Upon ANY SALE OR OTHER DISPOSITION of a project site that received grant funds for acquisition, rehabilitation or new construction, OCCURRING BEFORE THE 15-YEAR PERIOD, the recipient must comply with such terms and conditions as HUD may prescribe TO PREVENT THE RECIPIENT OR SUBRECIPIENT FROM UNDULY BENEFITING from the sale or disposition. This sits alongside, and is separate from, the repayment obligation that attaches when a project is not operated as transitional or permanent housing for 10 years. Four exceptions relieve a recipient of both the repayment terms and the undue-benefit terms: the disposition results in the property being used for the DIRECT BENEFIT OF VERY LOW-INCOME PERSONS; all the proceeds are used to provide transitional or permanent housing meeting the requirements of this part; project-based rental assistance or operating cost assistance from any federal programme or an equivalent state or local programme is no longer available and the project meets applicable performance standards, PROVIDED the previously assisted portion continues to meet the tenant income and rent restrictions for low-income units under section 42(g) of the Internal Revenue Code; or there are no homeless individuals and families in the Continuum's geographic area, in which case the project may serve individuals and families AT RISK of homelessness.

Confidence

high

Effective from

2012-08-30

Consequence model

agency finding with cure

Last reviewed

2026-08-31