Can my HUD Partial Claim be forgiven?

December

27

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Can I get HUD Partial Claim Forgiveness?

A HUD partial claim is an interest-free loan from HUD to help make a loan modification possible, or to get you caught up on overdue payments on an FHA loan. This silent second mortgage sits on the back of your loan and must be paid off at refinance or resale.

hud partial claim

Unfortunately, there is no way to get forgiveness for your HUD partial claim.


There are two ways to eliminate a HUD Partial Claim:

Full Payoff of the Claim

You can make full payment on the HUD partial claim by paying it off out of pocket, paying it off with a sale of the property or by paying it off with a refinance of the property.

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Short Sale of the Home

If the proceeds of the home sale are insufficient to pay off both the mortgage and the HUD partial claim, you may pursue a short sale. FHA has their own short sale process (FHA PFS Program). In a short sale, the Partial Claim is paid in full, with a discount of the first mortgage balance.


short sale with FHA

Need help navigating a home sale with a HUD Partial Claim?

Last Updated on December 27, 2023 by Minna Reid

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