What is a HUD Partial Claim and how will it affect my home sale?
What is a HUD partial claim?
How do I eliminate the partial claim?
The claim needs to be paid in full at refinance or resale.
Can the partial claim be forgiven or settled?
HUD does not forgive or settle partial claims and they must be paid in full.
What happens if I sell my home and I can’t sell for enough to satisfy the mortgage and the partial claim?
If the proceeds of the home sale are insufficient to pay off both loans, you will need to pay the remainder out of pocket or pursue a short sale. FHA has their own short sale process (FHA PFS Program), and if you qualify you can sell the property for less than you owe and have the remainder of the debt forgiven.
The problem with HUD partial claims is that they almost always end up being far larger than expected by the homeowner, and usually this additional debt lands the homeowner in a position where they owe more than their home is worth.
*Effective October 8, 2021, ISN is servicing all HUD partial claims:
We went through a short sale and Minna's team was amazing every step of the way. They made a very sad and stressful time seem easier by handling all the little details. They always stayed positive and put us in contact with an amazing legal team. We couldn't be more pleased.
Last Updated on October 24, 2023 by Minna Reid