Transfer Of Physical Assets - TPA

FHA loans can be a game-changer for wannabe homeowners who can’t qualify for a standard mortgage, either because they can’t swing a 20% down payment or because their credit is icky. FHA loans are, as their name suggests, backed by the Federal Housing Administration, which is part of the Department of Urban Housing and Development, or HUD. HUD-insured loans usually require the borrower to pay mortgage insurance every month, ‘cause they’re a little risky. If a borrower defaults on one of these mortgages, it’s the American taxpayers who pick up the tab. That’s a little scary, but the whole point of HUD-insured loans is to provide a way for more people to achieve their dream of homeownership.

But what happens if we’ve got a HUD-insured loan and want to transfer it to someone else? Well, that’s where the “transfer of physical assets,” or “TPA,” comes into play. TPA is a property sale process that transfers all (a full TPA) or part (a modified TPA) of a HUD-insured mortgage to another borrower. It’s like a transfer of mortgage, but instead of having to meet a lender’s transfer guidelines, the original and new borrowers have to meet HUD’s guidelines. And those guidelines are, in some cases, a lot more stringent. Which makes sense, really; the FHA already went through this whole rigmarole making sure the first borrower was qualified for a government-backed loan, so we can be sure there’s going to be just as much rigmarolling if that borrower decides to transfer all or part of that loan to someone else.