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I have an FHA loan and I am behind. How do I avoid foreclosure?

If your loan is insured by FHA and you live in the home, your servicer must review you for FHA's help options before foreclosing. These can include a payment plan, a partial claim where HUD pays your missed amount, or a loan modification. Call your servicer, ask for a loss mitigation application, and get free help from a HUD-approved counselor.

By Guillermo Serafin, broker and owner of Serve First Realty. Updated October 2026.

Is my loan an FHA loan?

FHA is part of the U.S. Department of Housing and Urban Development, called HUD. An FHA loan is a mortgage that FHA insures. If you are not sure, ask your servicer: "Is my loan FHA-insured?" Look for your servicer's phone number on your monthly statement.

FHA's help is for homeowners who are behind, or about to fall behind, and who live in the home.

What options does FHA offer?

FHA requires servicers to review you through a set order of options, often called a "waterfall." The current rules come from HUD Mortgagee Letters 2025-06, with changes that took effect February 2, 2026, and 2025-12. Options can include:

Forbearance and repayment plans, both informal and formal. These give you time or spread out what you owe.
A standalone partial claim. HUD pays your missed amount. It becomes a second loan on your home with no interest. You repay it when you sell, refinance, or pay off your first mortgage.
A loan modification, with or without a partial claim. FHA modifications can use 30-year or 40-year terms.
A payment supplement, which uses a partial claim to lower your monthly payment for a time. Ask your servicer if this is still offered.
If you cannot keep the home: a pre-foreclosure sale, which is a type of short sale, or a deed in lieu of foreclosure.

How much can a partial claim cover?

The partial claim is generally capped at 30 percent of your unpaid principal balance. HUD's rules change often, so ask your servicer or a counselor to confirm the current limit for your loan.

What rules should I know?

Generally, you can get only one permanent home-keeping option every 24 months.
The COVID-19 recovery options and FHA-HAMP ended on September 30, 2025. If someone offers them to you, ask questions.
Take a trial payment plan seriously. Under a 2026 HUD rule, Mortgagee Letter 2026-08, turning down a trial plan for the third time counts as failing the trial.
HUD has proposed more changes to partial claims, but they were only a draft as of this writing.

What should I do now?

Call your servicer. Ask for a loss mitigation application and your single point of contact.
Send a complete application as early as you can. Use our loan modification checklist.
Write down every call and keep proof of what you send. Use our servicer call log.
Get free help from a HUD-approved housing counselor at 800-569-4287.
If your servicer is not helping, call the FHA Resource Center at 800-225-5342, or email answers@hud.gov. You can also call the HUD National Servicing Center at 877-622-8525.
Learn more on HUD's page about avoiding foreclosure.

Do California protections still apply?

Yes. Federal servicing rules and the California Homeowner Bill of Rights can still protect you, such as limits on foreclosing while a complete application is under review. Read about your servicer's federal duties and the Homeowner Bill of Rights.

Watch out for scams

Applying for FHA help is free. California generally prohibits charging homeowners for loan modification or forbearance help before every promised service is fully done, and federal law adds more payment conditions. A real estate license does not create an exception. See our scam red flags guide.

General information, not legal advice. FHA rules changed several times in 2025 and 2026 and may change again. Sources: HUD Mortgagee Letters 2025-06, 2025-12, and 2026-08; HUD Handbook 4000.1; 12 C.F.R. section 1024.41; California Civil Code sections 2923.6, 2923.7, and 2944.7.

Your Foreclosure Alternatives Compared
A side-by-side look at your choices to avoid foreclosure.
Loan Modification Application Packet Checklist
The papers to send for a loan change, and a sample hardship letter.
Servicer Call Log and Document Tracker
A printable log to track every call and letter with your mortgage company.

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Even if you accept this offer and use our service, your lender may not agree to change your loan.

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