What Is Partial Claim?
A Partial Claim is an FHA loss-mitigation option that places approved past-due amounts in an interest-free subordinate lien in favor of HUD. It can bring the FHA-insured first mortgage current without requiring monthly payments on the Partial Claim. The borrower signs HUD's Partial Claim note and security instrument, and repayment is deferred until a specified later event.
Key Facts
- Partial Claims are available for FHA-insured mortgages; other loan owners and insurers use different loss-mitigation programs.
- No interest accrues on an FHA Partial Claim, and HUD does not require monthly payments on it.
- Under current HUD policy, approved arrearages may include past-due principal, unpaid accrued interest, past-due escrow or escrow advances, a projected escrow shortage, and allowable legal fees and foreclosure or bankruptcy costs for work performed for the current default episode as of foreclosure cancellation, within HUD's customary-and-reasonable limits; no other fees or costs may be included.
- The statutory maximum is cumulative: all outstanding Partial Claims and Payment Supplements together must not exceed 30 percent of the unpaid principal balance as of the default associated with the initial Partial Claim, and that base remains constant for the life of the mortgage.
- HUD may require repayment at mortgage maturity, sale or transfer of the property, assumption of the mortgage, payoff of the mortgage, or—if the Partial Claim note provides—termination of FHA insurance. Sale or transfer and assumption do not trigger repayment for a non-borrower who acquired title through an exempted transfer.
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How Does an FHA Partial Claim Work?
A Partial Claim is one of FHA's home-retention tools. When a servicer approves a Partial Claim, approved arrearages are placed in a separate subordinate lien in favor of U.S. Department of Housing and Urban Development. The servicer advances the funds needed for the Partial Claim before seeking reimbursement from HUD, and the borrower signs a Partial Claim note and security instrument.
No interest accrues on the Partial Claim, and HUD does not require a monthly payment on it. A Standalone Partial Claim can bring the first mortgage current while leaving its existing payment terms unchanged. FHA also permits a Partial Claim to be used with a loan modification or through the Payment Supplement option, where the result can differ.
HUD does not require repayment until the first applicable event: maturity of the first mortgage; sale or transfer of the property; assumption of the mortgage; payoff of the mortgage; or, if the Partial Claim note provides, termination of FHA insurance. Sale or transfer and assumption do not trigger repayment for a non-borrower who acquired title through an exempted transfer. For a Streamline Refinance on the same property by the same borrower, HUD will agree to subordinate the Partial Claim note. A borrower may also make a partial or full payment before the due date.
What Amounts Can Be Included?
Under current FHA policy, arrearages may include approved past-due principal, unpaid accrued interest, past-due escrow amounts or escrow advances, a projected escrow shortage, and allowable legal fees and foreclosure or bankruptcy costs for work performed for the current default episode as of foreclosure cancellation, within HUD's customary-and-reasonable limits. No other fees or costs may be included in the Partial Claim.
The maximum is cumulative. The total outstanding balance of all Partial Claims and Payment Supplements must not exceed 30 percent of the unpaid principal balance as of the default associated with the initial Partial Claim. HUD keeps that base constant for the life of the mortgage.
How Does It Fit With Other FHA Options?
- Standalone Partial Claim: May be used when approved arrearages can be resolved with available Partial Claim funds and the borrower can resume the first-mortgage payment.
- Standalone Loan Modification: Changes one or more terms of the first mortgage and may be used when a different payment is needed.
- Combination Loan Modification and Partial Claim: Uses both tools to resolve arrearages and reach the payment result required by FHA policy.
- Payment Supplement: Uses Partial Claim funds to resolve delinquent payments and temporarily reduce the monthly mortgage payment for three years.
A borrower cannot self-determine eligibility for one of these options. The mortgage servicer evaluates the loan and the borrower's current information under FHA's rules and offers an available option; the borrower chooses whether to accept it. HUD directs servicers to consider both owner-occupant and non-occupant borrowers for all loss-mitigation options, although separate rules apply to some non-borrowers who acquired title.
Temporary policy transition: HUD issued Mortgagee Letter 2026-08 on June 23, 2026. Servicers may implement its revised Trial Payment Plan and loss-mitigation review rules immediately and must implement them no later than September 21, 2026. During this period, ask your servicer which procedures apply to your review.
Contact your mortgage servicer promptly if you are behind or expect to fall behind. A HUD-approved housing counselor can also help you understand the documents and options without charging for foreclosure-prevention counseling.
Frequently Asked Questions
Do you have to pay back an FHA Partial Claim?
Yes. No interest or monthly Partial Claim payment is required. Repayment is due at mortgage maturity, sale or transfer, assumption, payoff, or—if the note provides—termination of FHA insurance. Sale, transfer, and assumption do not trigger repayment for a non-borrower who acquired title through an exempted transfer. For a same-borrower, same-property Streamline Refinance, HUD will agree to subordinate the Partial Claim note.
How much can an FHA Partial Claim cover?
The servicer calculates approved arrearages and available funds under FHA rules. A Partial Claim generally must be at least $1,000, with an exception for a Presidentially Declared Major Disaster Area home-retention option. All outstanding Partial Claims and Payment Supplements must not exceed 30 percent of the unpaid principal balance at the default associated with the initial Partial Claim; that base remains constant for the mortgage's life.
Is a Partial Claim the same as a loan modification?
No. A Standalone Partial Claim can resolve approved arrearages without changing the first mortgage's existing terms. A loan modification changes one or more terms of the first mortgage. FHA may also combine a modification with a Partial Claim or use Partial Claim funds through a Payment Supplement.
Can I get this Partial Claim on a non-FHA mortgage?
This page describes HUD's FHA Partial Claim. Other loan owners and insurers may use different loss-mitigation programs. Ask your servicer who owns or insures your loan and which options are available for it.
Who decides whether I qualify?
Your mortgage servicer reviews your loan, hardship information, ability to make the required payment, prior assistance, available Partial Claim funds, and any required Trial Payment Plan under current FHA policy. Contact the servicer promptly and ask for a written explanation of the options considered.