FHA issued Mortgagee Letter 2024-02, establishing the Payment Supplement loss mitigation option. Per the Mortgagee Letter (ML), the Payment Supplement loss mitigation option combines a standalone Partial Claim to bring the mortgage current with a new Monthly Principal Reduction payment. The Payment Supplement loss mitigation option allows servicers to bring the borrower’s mortgage current and temporarily reduce the principal portion of the monthly mortgage payment for a term of 3 years without modifying the mortgage. The Payment Supplement is only repaid when the borrower sells or refinances the home, or the mortgage is otherwise extinguished. In addition, the ML extends the COVID-19 Recovery Options through April 30, 2025. The provisions of this ML may be implemented starting May 1, 2024, and must be implemented no later than January 1, 2025.
Click to view the FHA Mortgagee Letter 2024-02: https://www.tenaco.com/wp-content/uploads/2024/02/FHA-Mortgagee-Letter-2024-02-02-21-24.pdf
Click to view the FHA Info #204-03: https://www.tenaco.com/wp-content/uploads/2024/02/FHA-Info-2024-03-02-21-24.pdf
