The first thing to understand is that HUD is not selling houses. It is selling defaulted loans — specifically reverse mortgages where the borrower has died. The house comes later, once whoever bought the loan forecloses on it. That single distinction explains most of what confuses people about this market.
What HUD is actually selling
The assets are Home Equity Conversion Mortgages — HECMs, the FHA-insured reverse mortgages taken out by homeowners aged 62 and over. HUD sells them in bulk through competitive auction rather than foreclosing itself, because foreclosing on thousands of scattered properties is slow and expensive for the insurance fund.
Every loan in these pools meets four conditions:
- The last surviving borrower is deceased
- No borrower is survived by a non-borrowing spouse
- The property is vacant (HVLS) or occupied by someone other than a borrower (HNVLS)
- The heirs of the estate have not paid off the debt
Read that fourth condition again. Every single loan in every one of these pools represents an estate that was never settled. Someone died, the family either could not or chose not to repay the reverse mortgage, and the property drifted into default. That is not an edge case in this programme — it is the entry requirement.
How a loan reaches HUD in the first place
The original servicer can assign a HECM to HUD once the loan balance reaches 98% of the Maximum Claim Amount — the lesser of the property's appraised value at origination or the FHA lending limit at the time. At that point HUD takes over servicing, and the loan becomes a candidate for a future sale.
HVLS and HNVLS: the only real difference
| HVLS | HNVLS | |
|---|---|---|
| Full name | HUD-held Vacant Loan Sales | HUD-held Non-Vacant Loan Sales |
| Property status | Vacant | Occupied by non-borrowers |
| Programme began | 2016 | December 2024 |
| Everything else | Identical — deceased borrower, no surviving non-borrowing spouse, heirs have not repaid | |
HNVLS is the newer and harder of the two. An occupied property means someone is living in a house securing a defaulted loan on a dead person's estate — an adult child, a relative, sometimes a tenant. Whoever buys that loan inherits that situation along with it.
The programme by the numbers
Across fourteen sales from 2016 through the end of 2024:
Where the properties are
Roughly half of everything sold sits in ten states.
Share of all HVLS and HNVLS loans sold, by property state. Top ten states account for about 52% of the programme.
The most recent completed sale, HVLS 2026-1 on 9 December 2025, offered 1,061 loans and cleared at 69.4% of broker price opinion. (Full pricing breakdown by state and bidder →)
Who buys these pools
Two names dominate, and a striking share of the rest are nonprofits.
| Purchaser | Loans | Share | Balance |
|---|---|---|---|
| GITSIT Solutions (formerly Kondaur) | 3,588 | 22.0% | $796.7M |
| Rushmore Loan Management / Roosevelt | 2,613 | 16.0% | $558.6M |
| VWH Capital Management | 1,008 | 6.2% | $207.1M |
| Hogar Hispano nonprofit | 818 | 5.0% | $187.0M |
| Headlands Foundation nonprofit | 740 | 4.5% | $235.7M |
| Home Preservation Partnership nonprofit | 724 | 4.4% | $227.1M |
Nonprofits have bought 33% of all HVLS loans since the programme began, up from 4% before 2019. HUD deliberately engineered that shift through bidding structure — nonprofits with a housing mission now bid as Priority Bidders and can take priority award on up to half the loan count. In the two most recent sales, Priority Bidders won 53% of HVLS 2025-1 and 23% of HNVLS 2025-1.
What happens after the sale
Purchasers report outcomes back to HUD. Across all sales where reporting is complete:
Because the borrower is dead and no one is repaying, foreclosure is the dominant path — 53% through foreclosure and 4% through deed in lieu. The remaining quarter resolve as short sales, payoffs by the estate, third-party purchases at the foreclosure auction, or charge-offs.
Where the houses end up
Of 6,055 properties that reached REO and were then sold:
The number worth sitting with is 40.6%. Four in ten of these houses are ultimately sold to investors. Nonprofits buy a third of the loans on a housing-mission mandate, but only 0.3% of the finished properties go to another nonprofit. Somewhere between the auction and the closing table, most of this stock passes through a private buyer.
What this means, depending on who you are
If you inherited a house with a reverse mortgage on it
You have more time and more options than most people realise, but not unlimited amounts of either. The estate can repay the debt, sell the property and settle from proceeds, or negotiate a short sale. Doing nothing is also a decision — it is precisely how loans end up in these pools. Once the note is sold, you are dealing with a private purchaser rather than HUD, and the pace changes.
If you bought a pool
Your problem is not the note, it is the 57% that become REO across dozens of states with different foreclosure timelines, unsettled estates clouding title, and — in HNVLS — occupants who have to be dealt with lawfully. The recent sales show the strain: 47% of HVLS 2024-1 and 72% of HVLS 2024-2 were still unresolved at the last reporting date.
If you are an investor looking for this inventory
You are unlikely to be a direct bidder unless you qualify. The practical route is buying from the purchasers after they foreclose, which is what that 40.6% figure represents.
Related: why nonprofits now win half of every HUD loan sale — the 50% priority reservation, the federal grants behind it, and what it means for private buyers.
We are the exit for the 57%
Investor Trustee Services buys single-family assets from HVLS and HNVLS purchasers as principal, on our own balance sheet — vacant or occupied, clouded title priced in rather than excluded, one asset or a pool tail. We also buy directly from heirs settling an estate with a reverse mortgage on it.
Peter Quinones · peter@investortrusteeservices.com
All figures are drawn from the FHA Office of Asset Sales Report to the Commissioner on Post Sale Report, March 2025, covering HVLS 2017-1 through HVLS 2024-2 plus HVLS 2025-1 and HNVLS 2025-1 at settlement. Outcome data reflects what purchasers reported to HUD and post-sale reporting was not yet due for the two most recent sales. Investor Trustee Services is not affiliated with, endorsed by, approved by, or acting on behalf of HUD or FHA.
Also in this series
- 4,200 vacant houses just went up for sale at once
- ITS founder joins NAHR as a Charter Member
- What the ROAD to Housing Act actually says
- The 350-home line now runs through HUD’s loan sales
- Who bought HVLS 2026-1 — and what the bidding tells you
- The shift to nonprofits in HUD distressed loan sales
- What HUD distressed loan pools actually sell for
- Who buys distressed property portfolios?