COVID-19: Are Borrowers required to make a “lump sum” payment for the total missed payments at the end of the COVID-19 Forbearance period?

No. A “lump sum” repayment for the total missed payments is not required immediately at the end of the COVID-19 Forbearance period. However, lenders will then evaluate Borrowers for appropriate loss mitigation options.  Owner-occupant Borrowers who were current or less than 30 Days past due as of March 1, 2020, and who indicate they have the ability to resume making on-time mortgage payments at the end of their COVID-19 Forbearance period are eligible for a COVID-19 Standalone Partial Claim. No interest will accrue on the COVID-19 Standalone Partial Claim and no payment is required until the payoff, maturity or acceleration of the FHA-insured Mortgage, including for the sale of the Property or a refinancing, or the termination of FHA insurance on the Mortgage. The amount of the COVID-19 Standalone Partial Claim is subject to the maximum statutory limit for all Partial Claims for an FHA-insured Mortgage.    

If the Borrower is not eligible for the COVID-19 Standalone Partial Claim, the Mortgagee must evaluate any Borrower not brought current through a COVID-19 National Emergency Standalone Partial Claim Option for FHA’s Loss Mitigation Home Retention Options (III.A.2.k) or Home Disposition Options (III.A.2.l).  Additional information see is available in Handbook 4000.1 at:

HQ Policy Determination – COVID-19 guidance

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-05485