24 C.F.R. § 92.255
§ 92.255 Purchase of HOME units by in-place tenants. (24 CFR Part 92)
Operative Text
(a) During a HOME-assisted rental unit's period of affordability, the participating jurisdiction may permit an owner to sell or otherwise convey a HOME-assisted rental unit to an existing tenant in accordance with the requirements of § 92.254. However, refusal by the tenant to purchase the housing does not constitute good cause for termination of tenancy or failure to renew the lease. The participating jurisdiction may not permit the use of a lease-purchase program under this section. (b) If no additional HOME funds are used to enable the tenants to become homeowners, the homeownership units are subject to a period of affordability equal to the remaining period of affordability if the units continued as rental units. The participating jurisdiction must impose resale requirements that comply with § 92.254(a) for the required period of affordability. The period of affordability and resale restrictions must be applied to the property regardless of the income of the family at purchase. If the tenant's family is no longer low-income at the time of the purchase, then the family must occupy the housing as a principal residence in accordance with § 92.254(a)(3) and must agree to the imposition of resale restrictions on the housing, in accordance with § 92.254(a)(5), for the period of affordability specified in this paragraph (b). (c) If additional HOME funds are used to directly assist the tenants to become homeowners, the period of affordability is the remaining period of affordability if the unit had remained a rental unit or the required period under § 92.254(a)(4) for the amount of direct homeownership assistance provided, whichever is longer. No additional HOME funds may be provided to an in-place tenant to become a homebuyer if the tenant's family is no longer low-income at the time of the purchase.
Under 24 CFR Part 92 § 92.255, a participating jurisdiction (typically a state or local government administering HOME funds) may allow an owner of a HOME-assisted rental unit to sell that unit to the tenant who already lives there, but only while the unit's affordability period is still active and only in line with the homeownership rules at § 92.254. A tenant's decision not to buy cannot be used as a reason to end the tenancy or refuse lease renewal, and lease-purchase arrangements are not permitted under this provision. When such a sale occurs, the unit carries forward affordability and resale restrictions for a period tied to either the remaining rental affordability term or the amount of any additional HOME assistance used, whichever is longer.
Plain English — not legal advice.
Property owners and managers operating HOME-assisted rental units under 24 CFR Part 92 § 92.255 should understand that offering a unit for sale to an in-place tenant is permissible only with the participating jurisdiction's approval and must conform to the ownership requirements of § 92.254. A compliant operator does not treat a tenant's refusal to purchase as grounds for eviction or non-renewal, and does not structure any arrangement as a lease-purchase. When a sale proceeds, the operator works with the participating jurisdiction to ensure that the appropriate resale restrictions and affordability covenants are recorded against the property for the required period, regardless of whether the purchasing tenant's household income has changed since they first moved in.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 92 § 92.255, tenants living in HOME-assisted rental units have a meaningful protection: if an owner offers to sell the unit, a tenant's choice not to buy cannot legally be used as a reason to terminate the tenancy or decline to renew the lease. If a sale does occur and the tenant becomes a homeowner, the home remains subject to resale restrictions for a defined affordability period, and additional HOME purchase assistance is generally not available to households that are no longer low-income at the time of purchase. Tenants who believe their tenancy is being threatened in connection with a purchase offer may find it useful to contact their local participating jurisdiction's HOME program office, a HUD-approved housing counseling agency, or a tenant-rights organization to understand how this provision applies to their situation.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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