General World News

FHA institutes new payment supplement partial claim

The U.S. Department of Housing and Urban Development (HUD) on Wednesday issued a mortgagee letter that implements the Federal Housing Administration’s (FHA) payment supplement partial claim.

The new loss-mitigation alternative resulted from the FHA’s acknowledgment that its toolkit wasn’t enough to support struggling borrowers as mortgage rates surged. Since March 2020, lenders and servicers have provided borrowers with nearly 1.9 million COVID-19 loss-mitigation actions. 

The letter states that the option will be implemented starting May 1, 2024, but will be mandatory on Jan. 1, 2025.

“This is a brand-new innovation in loss mitigation, and it’s designed to address what every servicer details ⇒

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