FHA Seeks Industry Input on New Partial Claim Program

Written By Era Williams

The Federal Housing Administration (“FHA”) has announced a proposal to create a new loss mitigation option to assist struggling borrowers that are delinquent on their mortgage payments. The Payment Supplemental Partial Claim would allow mortgagees to use available partial claim funds to bring borrowers current and temporarily reduce the principal amount of the borrower’s monthly mortgage payments for 3-5 years. Mortgagees would be required to evaluate eligible borrowers for the Payment Supplement PC loss mitigation option when the COVID-19 Recovery Modification option will not be sufficient to reach a target payment reduction.

FHA is looking for feedback by June 30, 2023 and will consider industry input before publishing a final mortgagee letter.

To read the proposed mortgagee letter, please visit FHA Payment Supplement Partial Claim Proposal.

Era Williams
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