FHA issued a waiver regarding partial payments for mortgages in default. FHA issued a waiver of certain language in Section III.A.2.d.ii(A) of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). The waived language was introduced in Mortgagee Letter (ML) 2025-06 (Updates to Servicing, Loss Mitigation, and Claims). That ML was updated and replaced by ML 2025-12 (Tightening and Expediting Implementation of the New Permanent Loss Mitigation Options) which became effective on October 1, 2025. The provision that has now been waived affected how partial payments are applied to mortgages in default and how the date of default is determined. Specifically, the language could be interpreted to require the date of default to remain unchanged even when sufficient partial payments were received to satisfy a full monthly payment. This interpretation caused confusion for mortgagees attempting to comply with FHA requirements. The waiver went into effect December 11, 2025.

Click to view the FHA Info #2025-59: https://www.tenaco.com/wp-content/uploads/2025/12/FHA-Info-2025-59-12-18-25.pdf