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12.3.6.4.3a COVID-19 Standalone Partial Claim

The COVID-19 Standalone Partial Claim allows borrowers who can afford their pre-forbearance monthly payments to become current with a zero percent interest loan from HUD that is recorded as a mortgage and is generally payable at the end of the loan term. The partial claim brings their loan current by covering full principal, interest, taxes, and insurance (PITI) payments. It is the same as a standard FHA partial claim except that borrowers do not need to submit financial information to access it. According to HUD, a borrower with a COVID-19 hardship who “indicates they have the ability to resume making on-time Mortgage Payments” can qualify for the partial claim.368

Like the standard partial claim, the COVID-19 Standalone Partial Claim is subject to the thirty percent statutory maximum.369 This statutory maximum may significantly limit the availability of the COVID-19 Standalone Partial Claim for borrowers who have previously received a partial claim.

In addition to the statutory maximum, Mortgagee Letter 2021-18 imposed a maximum partial claim for COVID-19 relief. “[T]he Partial Claim must not exceed 25 percent of the unpaid principal balance as of the date of Default at the time of payment of the initial Partial Claim less any previous Partial Claims paid.”370 To determine the 25% cap, the servicer first calculates 25% of the unpaid principal balance at the time of the borrower’s first partial claim and then subtracts any previous partial claims to determine the amount of partial claim available for a COVID-19 hardship.

Footnotes

  • 368 HUD, Mortgagee Letter 2021-18, at 12.

  • 369 See discussion of statutory maximum at § 8.2.3.1, supra.

  • 370 HUD, Mortgagee Letter 2021-18, at 13.