HUD will sell current mortgages securing subsidized projects, as follows:

1. (a) Current mortgages with FHA mortgage insurance will be sold either:

   1. (1) On a competitive basis to FHA-approved mortgagees; or
   2. (2) On a negotiated basis, to State or local governments, or to a group of investors that includes an agency of a State or local government if, in addition to meeting the requirements of the Statute, the sales price is the best price that HUD can obtain from an agency of a State or local government while maintaining occupancy for the tenant group originally intended to be served by the subsidized housing program.
2. (b) Current mortgages without FHA mortgage insurance will be sold if HUD can offer protections equivalent to those listed for an insured sale in paragraph (a) of this section.