You can actually see a fair number of properties that HUD sold for a
pittance ($1-$10, and some for $0.00!) included on this list of
multi-family housing sales:
HUD Multifamily Property Sales
I asked HUD about these, and their reply is below, but in a nutshell,
the housing is sold to local governments, or to non-profits working in
cooperation with local governments.
I believe the HUD response should fully answer your question, but if
there's anything else you need, feel free to contact HUD at the email
address below, or just let me know what you need by posting a Request
Subject: multi-family sales
I was looking over the list of multifamily HUD properties that have been sold:
and I noticed that quite a number of properties are sold for trivial
amounts -- one dollar, ten dollars, etc. The sales are made to both
Housing Authorities and to individuals.
>>Those nominal sales are to Units of Local Governments, ULGs (Cities
or Housing Authorities) under Right of First Refusal. Please
understand, these sales are based on a property having a negative
value due to low income, high expenses, and poor condition. The ULG is
require to repair, maintain as affordable, and agree to equity
participation. The Equity Participation requires all profits from a
city sell of the property be returned to HUD<<
Can you give me more information about this? In particular:
--How does one find out about the availability of such properties?
>>These sales are only available to ULGs<<
--What are the general sorts of conditions/requirements attached to such sales?
>>A nonprofit may align themselves with a city for a possible transfer<<
--What does a potential buyer have to bring to the table?
>>These types of sales are not available to the general public. All
sale to the general public must be competitive<<
--Are sales made through specific arrangements, or do they simply
occur in a public auction process, with a bidder offering a dollar,
and no one else offering a higher bid?
>>I'm not aware of any sales where HUD accepted a one dollar bid at a
competitive oral bid sale. In this case, HUD would cancel the sale and
re-advertise the sale<<
Again, check with HUD or get back to me if there's anything more you need.