A full Transfer of Physical Assets (TPA) is a property sales transaction involving the assumption of a HUD-insured loan. Transactions which do not involve a complete change in ownership may be eligible for a Modified TPA. Transactions involving Section 8, Housing Assistance Payments (HAP) Contracts and/or Preservation or other use agreements may have additional considerations (see below).

An Assignment or Assumption of Housing Assistance Payments (HAP) Contract is required when the property being sold is subject to a HAP contract, with or without mortgage insurance. The HAP rents are set by a variety of factors, so it's important to understand how the rents may change from year to year before purchasing a property. Please see the Section 8 Renewal Guide for details. (The Renewal Guide has been updated several times, so check to make sure you have the most current version.)

Certain HUD properties also have "Use Agreements" which must be assumed by a purchaser. These agreements may also limit rents, so it's important to understand these before agreeing to a sales price. Each "Use Agreement" is unique, so it's important to read these thoroughly to understand which provisions will remain in effect. Transactions involving "Preservation Use Agreements" will have additional considerations.

The procedures for reviewing and approving transfers of Physical Assets are explained in Handbook 4350.1 and Sec 12.1.4.F MAP Guide. Additional guidance was provided by HUD Notice 99-13.

Transfers of Physical Assets involving Section 232 healthcare facilities should consult leanthinking@hud.gov and Section 232.

For properties that have been through the Mark-to-Market (M2M) Program, please review Supplemental Notice H2007-05, amended by Housing Notices H2008-04, H2009-06 and H2010-22 for the Assumption, Subordination, or Assignment of M2M Program Loans in TPA and Refinance Transactions. This Notice/Guidance outlines a request process and review criteria for owners who wish to refinance or sell a property that has received the benefits of a debt restructuring under M2M or the Demonstration Program, and where the HUD-owned loans will be assumed and/or subordinated, or where HUD will approve debt assignment, modification or forgiveness with respect to a qualifying nonprofit purchaser.