Effective Solutions for FHA Loan Borrowers to Stay in Their Homes
The U.S. Department of Housing and Urban Development (HUD) has announced that the temporary mortgage relief options introduced during the COVID-19 pandemic for Federal Housing Administration (FHA) loans will become permanent. These measures, aimed at helping struggling homeowners stay in their homes, will officially take effect on February 2, 2026, with the current temporary provisions remaining in place until then.
These updates build upon the success of programs implemented during the pandemic, which have helped over two million homeowners avoid foreclosure. HUD’s goal is to provide flexibility for mortgage servicers to address financial hardships while reducing losses.
Key Features of the Permanent Measures:
- Early Default Intervention: Borrowers struggling to make payments can access repayment plans or receive temporary relief through forbearance, which pauses or reduces mortgage payments for up to 12 months. For those impacted by natural disasters, special forbearance options offer additional flexibility.
- Home Retention Options: Depending on a borrower’s financial situation, servicers can offer tools to make payments more manageable. Options include partial claims, standalone loan modifications, and combinations of loan modifications and partial claims to achieve a 25% reduction in the principal and interest portion of the payment.
- Home Disposition Options: For homeowners unable to stay in their homes after exhausting all other retention options, servicers can offer alternatives to foreclosure, such as pre-foreclosure sales or deeds-in-lieu of foreclosure.
HUD emphasizes that these measures are designed to sustain homeownership during difficult times. According to FHA Commissioner Julia Gordon, “These solutions have proven to be effective in reducing foreclosures and protecting homeowners, and we’re confident they will continue to provide meaningful relief in the future.”\
Click here for The updated set of permanent options for mortgage servicers to help borrowers with FHA-insured single-family mortgages keep their homes or otherwise avoid foreclosure when they fall behind on their mortgage payments.
Today, FHA is also announcing an additional 60-day feedback period for its proposed Equity Saver Sale. The Equity Saver Sale would be a future addition to FHA’s Home Disposition Options and which would allow borrowers to list and sell homes with retained equity while foreclosure processes are paused. The proposal is open for feedback until March 17, 2025. The proposal is posted on FHA’s Single Family Drafting
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
More information about HUD and its programs is available at www.hud.gov and https://espanol.hud.gov.
You can also follow HUD on Twitter and Facebook or sign up for news alerts on HUD’s Email List.
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Our Commitment to You
We understand how vital it is to help homeowners navigate financial challenges, especially during unforeseen hardships. These updated options are designed to provide borrowers with practical solutions to stay in their homes or avoid foreclosure.
For more information on HUD’s programs, visit www.hud.gov or follow HUD on social media.
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