Chattanooga Housing Authority Executive Director Betsy McCright said a proposal by a Chicago developer to buy the Harriet Tubman site may go to the CHA board next month.
She said in December 2011 HUD approved the CHA's disposition application based on an appraised value of $2,450,000.
The city had offered $1 million for the Tubman property.
However, the city later withdrew when the price went much higher.
Ms. McCright said, "We listed the property with a broker and to date we have received seven inquiries from potential buyers.
"The CHA staff is currently working with the Lakewood Realty Group & Co. of Chicago, Ill., on an offer of $2,850,000 to purchase the property. The prospective buyer has deposited $50,000 in earnest money while it performs its due diligence on the property.
"The buyer proposes to develop 100 units for seniors, 220 units supported by HUD vouchers, and 120 market rate units. Renovation to the units would happen in a multi-phased manner.
"Before proceeding with any transaction, the CHA staff must make a recommendation to the CHA Board of Commissioners. If the proposed sale is approved by the board, then the proposed sale must receive final approval by HUD.
"We hope to present a proposal for sale to the board by November 2013."