Yes, I am saying that it could be desirable for the owner to refuse a buyout and sell it to someone other than the government.

Yeah, we'd have to condemn the home as part of the process to avoid that. Or at least flag it as uninsurable, so any buyer would have to bring cash and be willing to eat a total loss.

I'm not sure the federal government has the power to do anything other than refuse to insure it under their program.