Can an FHA-insured mortgage be assumed if it is in loss mitigation?

A Loss Mitigation Assumption refers to the assumption of personal liability for repayment of the Mortgage in accordance with agreed loss mitigation terms by a non-Borrower, who has acquired a title interest in a Property securing an FHA-insured Mortgage and satisfies established criteria for loss mitigation approval.

The Mortgagee must obtain the signature of each non-Borrower assumptor on:

  • all associated written agreements for the approved Loss Mitigation Option; and
  • an assumption agreement that conforms with applicable state law for assumption of personal liability for repayment of the Mortgage in accordance with agreed loss mitigation terms.

Any questions may be directed to the FHA Resource Center Toll-Free Telephone Number at (800) CALLFHA (225-5342) or by email to answers@hud.gov.  Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at (800) 877-8339. 

For policy information see Handbook 4000.1 III.A.2.k.vii(A) available at:  https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh
 


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-05325