FHA — Homeowner Resources
The Federal Housing Administration (FHA), part of HUD, insures mortgages made by FHA-approved lenders — making homeownership accessible to borrowers who may not qualify for conventional loans. For FHA
About FHA
The Federal Housing Administration (FHA), part of HUD, insures mortgages made by FHA-approved lenders — making homeownership accessible to borrowers who may not qualify for conventional loans. For FHA borrowers facing foreclosure, the FHA offers a unique and powerful set of loss mitigation tools including FHA-HAMP (with its partial claim option), special forbearance, and standalone partial claims. FHA loss mitigation rules are generally more homeowner-friendly than conventional loan rules: servicers must evaluate borrowers for ALL available FHA loss mitigation options before foreclosing, and FHA's waterfall process requires servicers to offer the most generous option for which the borrower qualifies. If you have an FHA loan, your servicer likely has more flexibility than they're letting on — FHA's 'loss mitigation home retention waterfall' is a well-defined process that requires specific steps before foreclosure can proceed.
Website
www.hud.gov/fhaJurisdiction
National — covers all FHA-insured loans
Key Programs & Protections
The FHA insures mortgages against default, enabling lenders to offer loans with lower down payments and more flexible underwriting. The FHA sets loss mitigation rules that servicers must follow, requires specific loss mitigation waterfalls, and maintains the FHA Connection system that tracks loan status and servicing actions.
FHA-HAMP (Home Affordable Modification Program)
FHA's primary modification program. Key features: capitalize arrears and legal costs, reduce interest rate to market, extend term to 360 months from modification date, and if additional payment reduction is needed, defer a portion of the principal (partial claim) — up to 30% of the unpaid principal balance. The partial claim is a zero-interest, no-monthly-payment junior lien due when the home is sold or refinanced.
FHA Partial Claim (Standalone)
For borrowers who can resume their current mortgage payments but cannot afford to repay arrears, FHA offers a standalone partial claim. FHA advances funds to cure the arrears, and the amount becomes a junior lien with no interest and no monthly payment — due when the property is sold, refinanced, or the first mortgage matures. This is one of the most favorable loss mitigation tools available in any loan program.
FHA Special Forbearance
For borrowers experiencing temporary hardship (job loss, medical emergency, disaster), FHA allows special forbearance plans that reduce or suspend payments for a specific period (typically 3-12 months). At the end of forbearance, the borrower must either resume payments with a repayment plan for the arrears, or apply for a permanent modification.
FHA Pre-Foreclosure Sale (PFS)
If homeownership is unsustainable, the FHA Pre-Foreclosure Sale program allows the borrower to sell the property for less than the mortgage balance, with FHA covering the deficiency. This avoids foreclosure and is less damaging to credit. Borrowers may also qualify for relocation assistance.
How to File a Complaint
For FHA servicer violations, start by contacting the FHA Resource Center at 1-800-CALL-FHA. FHA Mortgagee Compliance Managers oversee servicer compliance and can investigate complaints. If the servicer is not following FHA loss mitigation rules, the FHA can require corrective action. Also file a CFPB complaint — the CFPB and FHA/HUD coordinate on servicing complaints. For FHA-insured loans, servicers are required to maintain documentation of their loss mitigation evaluation — you have a right to request this documentation.
Enforcement Actions
FHA has broad authority over FHA-approved lenders and servicers including: requiring corrective servicing actions, imposing civil money penalties, suspending or withdrawing FHA approval (effectively barring the company from FHA programs), requiring indemnification for improperly serviced loans, and referring cases to the Department of Justice (DOJ) for False Claims Act violations. FHA also participates in joint enforcement actions with the CFPB and DOJ. Major settlements have resulted in billions in penalties for FHA servicing violations.
Homeowner Resources
- •FHA Resource Center: 1-800-CALL-FHA (1-800-225-5342)
- •HUD National Servicing Center: technical assistance for FHA servicing issues
- •FHA Connection: online portal where you can verify your loan's FHA status
- •FHA Single Family Housing Policy Handbook (Handbook 4000.1): the complete FHA servicing rules
- •HUD Mortgagee Letters: regulatory updates to FHA programs and requirements
Frequently Asked Questions
How do I know if I have an FHA loan?▼
Does the FHA loss mitigation waterfall always apply?▼
Need Help Navigating FHA Programs?
Understanding your rights with FHA is critical — but applying them to your situation takes expertise. Professional Law Assist knows how to leverage FHA programs and protections to build the strongest possible defense. Get a free case review and learn exactly how FHA's rules apply to your foreclosure.
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