COVID-19: What are the requirements for using a COVID-19 Standalone Partial Claim?

For any Owner-Occupant FHA Borrower who is eligible for COVID-19 Loss Mitigation Options, the Mortgagee must evaluate the Borrower for the COVID-19 Standalone Partial Claim.
 
Eligibility for the COVID-19 Standalone Partial Claim:
The Mortgagee must ensure that:
  • the Borrower indicates they have the ability to resume making on-time Mortgage Payments; and
  • the Property is owner-occupied.
Terms of the COVID-19 Standalone Partial Claim:
  • the COVID-19 Standalone Partial Claim fully reinstates the Mortgage;
  • all Late Charges, fees, and penalties are waived except that Mortgagees are not required to waive Late Charges, fees, and penalties, if any, accumulated prior to March 1, 2020;
  • the COVID-19 Standalone Partial Claim amount includes only arrearages, which consists of Principal, Interest, Taxes, and Insurance (PITI);
  • the COVID-19 Standalone Partial Claim does not exceed the 30 percent maximum statutory value of all Partial Claims for an FHA-insured Mortgage, as listed in Statutory Maximum for Partial Claims (III.A.2.k.v(D)(2)(a)); and
Document Delivery Requirements for COVID-19 Standalone Partial Claim:
The Mortgagee must submit all required documentation for COVID-19 Standalone Partial Claims as listed under Delivery of Partial Claim Documents (III.A.2.k.v(J)(6)).
The Mortgagee is automatically granted a 90-Day extension to the six-month deadline for the recorded Mortgage.
 
If a Mortgagee experiences additional delays out of their control, including past the automatic 90-Day extension for the recorded Mortgage, that impact delivery of the Partial Claim documents, Mortgagees may file requests for an additional extension in accordance with Requests for Extensions of Time for Delivery of Partial Claim Documents (III.A.2.k.v(J)(7)).
 
For additional information, see:

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-05566