New Help for Homeowners to Prevent Losing Their Homes

The Department of Housing and Urban Development (HUD) has made changes to help people with FHA (Federal Housing Administration) insured single-family home loans keep their homes when they have trouble paying their mortgages.

On January 16, 2025, HUD shared some new permanent options for the companies that manage mortgage loans, called mortgage servicers. 

These options, known as the FHA's loss mitigation "waterfall," have been improved using what FHA and the servicers learned while helping over two million homeowners during the COVID-19 pandemic. These new options will start on February 2, 2026. The temporary plans made during the pandemic will stay until February 1, 2026.

The new support will work for any homeowner behind on their payments, for any reason, and will give servicers ways to address different hardships:
 

• Early Help: If a homeowner just starts having trouble with their mortgage payments, the loan company can make a repayment plan or reduce payments temporarily for as much as a year. If a natural disaster happens, there are even more flexible options.
• Keeping the Home: Depending on the homeowner's money situation, there are tools to help catch up on the mortgage and stay in the home. If a homeowner can still pay their monthly mortgage, options like "partial claim" or a loan change can lower their payment. If a homeowner cannot afford their mortgage payment anymore, there are options that aim to reduce the monthly payment amount by 25%.
• Moving On: If a homeowner tries all options but still cannot afford their home, the loan company will offer ways to avoid foreclosure. This could be selling their home early or giving the deed (legal ownership) back to the lender.

Sarah Edelman, the Deputy Assistant Secretary for Single Family Housing, noted that the success of helping homeowners during the pandemic inspired these new changes. They've also put in safety measures to lower the risk and financial loss for HUD.

Additionally, FHA opened a 60-day period to hear people's opinions on its proposed Equity Saver Sale, which would let homeowners sell their houses with some value left and stop foreclosure temporarily. People can give their feedback on this idea until March 17, 2025.

Check out FHA's Office of Single Family Housing "Drafting Table" for more information.

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Find out if you're eligible for more housing support here!