COVID-19: Will FHA consider a loan to be an Early Payment Default (EPD) if it is reported in the Single Family Default Monitoring System (SFDMS) with Delinquency and Default Reason code 055 – Related to National Emergency Declaration?

Yes. FHA will consider a loan to be an Early Payment Default (EPD) for Quality Control purposes if it is reported as Delinquent in the Single Family Default Monitoring System (SFDMS) for any reason, including Forbearance for Borrowers Affected by the COVID-19 National Emergency, and it otherwise meets the definition of EPD in Handbook 4000.1, Section V.A.3.a.iv(B)(1). FHA may continue to select EPDs and any other loans for review in the Loan Review System, regardless of forbearance status.
 
For additional information see Handbook 4000.1 available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh
 
FHA continues to revise its FHA Single Family COVID-19 information as needed to keep stakeholders updated with the latest information about FHA’s response to the COVID-19 pandemic.  Related information for FHA mortgagees, borrowers and other interested parties is available at: https://www.hud.gov/program_offices/housing/sfh and on the https://www.hud.gov/answers website.
 
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-05530