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Transfer of a HUD Financed Property

TRANSFER OF OWNERSHIP OF PROPERTY FINANCED WITH A HUD INSURED MORTGAGE LOAN

Unless the loan is beyond the lockout/prepayment penalty period, any asset which has been financed with a HUD insured mortgage loan can only be sold or transferred by means of a HUD approved process called a Transfer of Physical Assets. The initial Application for Transfer of Physical Assets must be accompanied by 22 classes of documents. The documents which are needed include several usually prepared by the lawyer for the buyer. The documents needed from the seller and purchaser:

1) An executed 2530 previous participation form; one is attached

2) A resume of the purchaser;

3) Sources and Uses of Funds for the transaction;

4) Unexecuted secondary financing documents;

5) An unaudited interim financial statement;

6) A pro forma balance sheet;

7) The mortgagee’s statement of escrow and reserve account;

8) A Management Improvement and Operating (MIO) Plan;

9) A proposed but unrecorded deed;

10)A proposed bill of sale and assignment (see item 9);

11) Proposed Management Certification and Form 2530 for proposed manager (if a new manager will be used);

12)A title report; and

13)A Proposed Rental Schedule (HUD form 92458);

Once the TPA is preliminarily approved, the buyer and seller have a period of forty five (45) days within which to complete the transaction, record any documents which are required to be filed, and deliver such evidence of completion of the transfer to HUD. That delivery accomplished final approval of the TPA, which is usually memorialized by a final approval letter from HUD.

Additional resources provided by the author

Example bill of sale form

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