Form HUD-92266 Application for the Transfer of Physical Assets

Application for Transfer of
Physical Assets (TPA)

U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner

OMB Approval No. 2502-0275
(Exp. 12/31/2009)

Public reporting burden for this collection of information is estimated to average 92 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency
may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB control number.
This information is completed and submitted to HUD by prospective purchasers of properties with mortgages either HUD-insured or HUD-held prior to
conveying the title. This form cites all the supportive documentation which must be submitted to HUD for approval. The information is used to closely
monitor the operation of the properties encumbered by mortgages which HUD insures or holds. The authority for this function can be found in the National
Housing Act and in the Regulatory Agreements between the Secretary of HUD and the mortgagor of each HUD related project. This information is required
to obtain benefits.

General Information
Use these instructions for overview and checklist purposes. HUD
Handbook 4350.1, Chapter 13, provides complete instructions. If
there appears to be a conflict between what is written here and the
Handbook, the Handbook governs.
HUD will prosecute false claims and statements. Conviction may
result in criminal and/or civil penalties (18 U.S.C. Sections 1001, 1010,
1012; 31 U.S.C. Sections 3729, 3802).
Use this form for transfers of properties encumbered by mortgages
insured by HUD and for mortgages owned by the Secretary of HUD.
It must be executed by the purchaser, the seller, and normally by the
mortgagee. It must be presented to the mortgagee for execution. If the
mortgagee refuses, the reason must be given to HUD in writing.
Copies of correspondence to or from the mortgagee must be attached.
If the mortgage has not been finally endorsed for insurance, the
application will not be accepted without the mortgagee's execution. If
the proposal to transfer involves the creation of a lien against the
property, the mortgagee must consent to the transfer.
Avoid introducing amendments or deviating from the instructions unless
absolutely necessary to make the transaction effective. Nonconforming
documents and deficient information will delay the process.
When an Attorney's Opinion is required, do not use an attorney that
has an identity of interest with either the purchaser or seller.
The final paragraph of this application must be signed by the
mortgagee in every instance where the transfer will result in the
creation of a lien against the project.
HUD imposes a TPA fee of $0.50 per $1,000 of the original face
amount of the mortgage to cover the cost of legal, administrative, and
fiscal actions. Send the fee with the application.
Some transactions generally do not require a fee:
(1) Substitution of individual general partners of a partnership/
mortgagor; or
(2) Assignment of 100 percent of the beneficial interest in a
passive land trust that holds title to the project, if the assignment does not result in a change in the control of the project.
Some transactions involving multiple transfers may be subject to more
than one TPA fee, such as transactions involving two transfers of title
by deed. The HUD Field Office manager (after consulting with Field
Counsel) will make the determination.
If the Field Office manager determines that a transaction or series of
transactions have been structured to avoid paying the TPA fee, the
application will be rejected. New application(s) will not be accepted
until the required fee(s) have been paid.
Preliminary Approval Process
The Field Office immediately gives the applicant a written acknowledgment of receipt and begins a completeness review. The Field
Office shall determine if the application should be returned or if the
missing pieces should be requested and processing delayed.
The Field Office then reviews other HUD reports to determine acceptability of transfer.
If the instruments are in order, the Field Office gives a written
preliminary approval. If some changes are necessary, a conditioned
approval will be given which authorizes execution of documents not
requiring changes.

Preliminary Approval:
Binds the mortgagor-seller and purchaser to take any steps necessary
to reconvey the property to the mortgagor-seller if the terms of the
preliminary approval are not met within 45 working days, unless the
Field Office gives a written extension.
Binds the mortgagor-seller and purchaser to meet all other conditions
of the preliminary approval to include correcting any unsatisfactory
matter revealed in the review of items received for final approval.
Requires that all Final Approval documentation must be recorded and
submitted to the Field Office within this 45 working day period
Twenty-Two Classes of Required Documents are expected to
accompany the application:
1. TPA Application. HUD- 92266 (This form)
2. Purchaser's Letter. “Purchaser” is defined to include all individuals purchasing as individuals or as principals in a joint
venture, all general partners in a purchasing partnership, or a
corporation.
The letter:
must be signed by an authorized principal of the purchasing
entity; must describe in detail all financial consideration flowing to
the project and the mortgagor/seller as a result of the transfer;
must detail all funds allocated to project operations as well as
those funds designated for use in correcting the physical needs
of the project;
must state that if the project is HUD-insured the project mortgage
is current or will be brought current as a result of the transfer
approval;
must state (if the mortgage is held by HUD) that the mortgage is
either current or it must describe a plan for bringing the mortgage
current. All workout plans must comply with HUD workout policies
in effect at the time the TPA application is submitted for Preliminary Approval.
3. Purchaser's Certificate of Previous Participation (HUD form
2530) must be filed for all general partners and all individuals and/
or entities who own an interest in the project of 25 percent or more
or who own 10 percent or more of the corporate stock of the
corporation purchasing the project.
4. Purchaser's Resume(s). If the purchaser has no previous
participation with the HUD Field Office where the application for
transfer is submitted. Resumes are required for each principal of
the purchaser and should be in sufficient detail for HUD to
understand the nature of their real estate experience.
5. Sources and Uses of Fund. This shows all expected sources of
funds and all expected uses of these funds. A suggested format
is in Appendix F. Modification is acceptable as long as details are
not omitted or items are not combined. All purchasers are
required to include a sources and application of funds. There
are no exceptions.
6. Executed but Unrecorded Sale Contract, Option Contract or
Land Contrac. Submit the applicable sale document in its
entirety.

Page 1 of 3

form HUD-92266 (12/91)
ref Handbook 4350.1

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Executed Seller/Purchaser Affidavi. The parties must submit
with the sale contract a sworn statement to the effect that the
sale contract recites all of the consideration moving to the seller
or any person identified therewith.
Executed but Unrecorded Regulatory Agreement
Executed but Unrecorded Modification Agreement or Release and Assumption Agreement
Unexecuted Secondary Financing Documents. If the proposed secondary financing involved creates a lien against the
project or personality thereof a consent statement from the
holder of the first mortgage must be submitted. See Appendix G,
Legal Review of Transfer of Physical Assets Proposals.
Unaudited Interim Financial Statement (prepared according
to Handbook 4370.2) from the date of the last audited financial
statement to the date of application.
Pro Forma Balance Sheet (prepared according to Handbook
4370.2) that shows how the project accounts are expected to
appear the day after the expected date of closing.
Mortgagee's Statement of Escrow and Reserve Account an
opinion as to the adequacy of the present escrow balances
(taxes, property insurance) and present monthly deposits to
meet the next anticipated tax and insurance bills.
Management Improvement and Operating (MIO) Plan.
Where the project will have physical, management, or financial
needs or changes at the time of the transfer, a MIO plan or
another plan acceptable to HUD must be submitted, which
describes the timing and extent of planned repairs and financial
contribution and the timing for all management or procedural
changes.
Proposed but Unrecorded Deed
Proposed Bill of Sale and Assignment that describes all
personal property conveyed and should be on the form provided
by HUD.
Proposed Management Certification and Form HUD-2530.
Where a change of management is contemplated by the transfer, a copy of the proposed new management certification must
be included. This certification must be completed in conformity
with HUD Handbook 4381.5 Rev-1. If not already on file with the
Field Office, a Management Agent Profile must also be submitted. If the proposed agent has not previously managed properties in the jurisdiction where the project is located, a brief
summary or resume of the agency and its principals should be
included. Also, the new management company must receive
previous participation clearance by filing HUD form 2530.
Title Report
Mortgagor's Oath
Proposed Rental Schedule (form HUD-92458). The approval
of this rental schedule in conjunction with the TPA is not an
approval to raise the rents at the project. All rent increases must
be processed under existing procedures.
Executed Organizational Documents of Purchaser. Unless
the purchaser is an individual, full details as to the entity
acquiring the project shall be provided. If the purchaser is a
corporation, trust, or partnership, two certified copies of the
charter, trust, or partnership agreement should be furnished. In
any such case the charter or agreement shall show that the
corporation, partnership, or trust is authorized to operate the
project and to execute and be bound by the Regulatory Agreement. The charter, agreement, or other proper document or
minutes of meetings should establish clearly the authority of the
persons executing the Regulatory Agreement and other papers
for the purchaser.

22. Attorney's Certification. The Purchaser's attorney must certify
that following HUD's preliminary approval, all documents requiring execution and/or recordation will be executed and, as
required, recorded in the form reviewed and approved by HUD.
The attorney must use the form entitled Attorney's Certification,
(Appendix A-11).
Final Approval Process
If HUD required any changes to the documents submitted during the
Preliminary Approval review, the applicant's attorney must certify to
HUD that the required changes have been made.
The applicant has 45 working days from the date of preliminary
approval to submit all executed and recorded documentation to the
Field Office. The preliminary approval shall be the date on the letter.
Where the applicant finds that he/she is unable to submit the
appropriate documentation within the required time period, he/she
should submit a written request for an extension of time to the Field
Office. Such extension must explain the reason for the delay.
The Applicant must provide the following for final approval:
1. All Executed Recorded Documents. One certified (by the
recording officer) and one conformed copy of all recorded
documents—except the recorded Regulatory Agreement.
2. All Unrecorded Executed Documents. Certified true copies
by the purchaser, trustee or other responsible person of all
unrecorded executed documents used in connection with the
transfer.
3. Original Regulatory Agreement. Where applicable, the
original executed and recorded Regulatory Agreement and
one copy.
4. Audited Interim Financial Statement from the date of the last
audited report to date of transfer.
5. Purchaser's Balance Sheet-Actual Condition on date of title
transfer to the purchaser, along with certified true copies of any
deferred payment notes approved by the Secretary.
6. Mortgagee's Statement of all trust and escrow accounts as of
date of transfer of title to the purchaser.
7. Title Policy or endorsement, as appropriate.
If the mortgagor-seller is to be released from the note obligation, a new title policy or a letter, from the title company issuing
the original title policy, showing that after the transfer the
insured mortgage will remain a valid lien on the property and
that the existing title policy is still in full force and effect.
8. Attorney's Opinion. Stating that:
the transaction has been legally consummated and that
the purchaser is legally authorized to operate the project and
is obligated to abide by the terms of the Regulatory Agreement.
the documents that were executed and/or recorded are the
same, in form and content, as those approved by HUD in the
preliminary review.
9. Rental Schedule and or Budget Worksheet if Applicable (form
HUD-92458). Must be dated later than the project transfer
date.; must show names of principals for which HUD approved
a HUD-2530; may not exceed the current rents most recently
approved by the Field Office (if the rents have not been
deregulated).
If everything is acceptable, the Field Office sends a letter approving
the transfer. As a guide, the Field Office may use the sample letter
entitled Final Approval in Appendix A-10.
If recording or other deficiencies are discovered, the Field Office
immediately tells the purchaser to correct them and to resubmit.

Page 2 of 3

form HUD-92266 (12/91)
ref Handbook 4350.1

OMB Approval No. 2502-0275
(Exp. 10/31/2005)

U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner

Application for Transfer of
Physical Assets (TPA)
Project Number

Date (mm/dd/yyyy)

Project Name

Mortgagor-Seller

Project Purchaser (Includes Form of Ownership, e.g., Individual, Partnership, Corporation, Trust)

Mortgagee of Record (Name and address)

Servicing Agent (Name and address)

Mortgage Recorded

State

County

Date (mm/dd/yyyy)

Book

Page

To the Secretary, Department of Housing and Urban Development:
changes as you may require and no others, be delivered to you. Unless
said documentation is delivered to HUD within the specified time (45
working days) or unless further time for completing the transaction is
granted in writing by you, the application for approval of the transfer will
be denied and any interest already conveyed in the property shall be
reconveyed to the above-named mortgagor.
It is understood and agreed that within 45 working days of the issuance of
written authorization to record the documentation previously submitted in
connection with this transfer, such documentation will be recorded and the
original and copies of the documentation will be returned to you as
appropriate. In addition, all of the attachments listed here and in HUD
Handbook 4350.1 as required for final approval, some of which have not
been submitted previously, must be submitted to you within the same 45working day period. It is understood that unless appropriate documentation is recorded and returned to you within the prescribed time or unless
further time for completing the transaction is granted in writing by you, final
approval of the application to transfer the property will be denied and all
property transferred will be reconveyed to the mortgagor.

The above-named mortgagor-seller and the project purchaser submit
herewith the required fee of $ ________________ and apply to the
Department of Housing and Urban Development for permission to transfer
the project from the mortgagor to purchaser and, in support of said request
represent to the Secretary as follows:
I. All real and personal property of the mortgagor-seller will be
conveyed to the purchaser.
II. After the transfer, purchaser will own said real and personal property free and clear of all liens, encumbrances or project obligations
except the insured mortgage and those expressly approved by you
in writing as to form, content, terms, and amount.
In further support of this request, the documents enumerated in the
instructions on this form and in HUD Handbook 4350.1 are attached for
preliminary approval.
It is understood and agreed that within 45 working days of the issuance of
preliminary approval the final approval documents enumerated in the
instructions on this form and in HUD Handbook 4350.1 will, with such

Mortgagee's Statement: If the above transfer is approved by the HUD Secretary, the mortgagee agrees to execute a Release and Assumption Agreement
or a Mortgage Modification Agreement incorporating the Regulatory Agreement in the mortgage. It is understood that the mortgagee's consent to this
transfer will in no way prejudice its rights under its contract of insurance with HUD. In the event the consent of the mortgagee to the transfer is not evidenced
by endorsement of this application, please provide the following information.
Date Consent Requested (mm/dd/yyyy)

Party to Whom Request Directed

Reason for Refusal to Consent

By (Name/Title)

Mortgagee

Executed this date. (mm/dd/yyyy)

Mortgagee's Consent to the Creation of a Lien Against the Project
Mortgagee hereby consents to the creation of a lien(s) against the real property known as (project no.) _______________________ ,
(project name) _______________________________________________________________________________ in connection with
this transfer. Mortgagee waives its right to assign the mortgage and claim insurance benefits by the reason of the creation of such lien(s).
Executed this date (mm/dd/yyyy)

Mortgagee

By (Name/Title)

Mortgagor-Seller

Date (mm/dd/yyyy)

By

Purchaser

Date (mm/dd/yyyy)

By

Page 3 of 3

form HUD-92266 (12/91)
ref Handbook 4350.1