HUD Handbook 4000.1 III.A.2.d — Partial Payments for Mortgages in Default

hud-4000-1-iii-a-2-d

HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.d. See obligation entries for operative requirements and verbatim primary-source citations.

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source:
  type: regulation
  id: hud-4000-1-iii-a-2-d
  authority: HUD Handbook 4000.1 III.A.2.d — Partial Payments for Mortgages in Default
  description: |
    HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.d.
    See obligation entries for operative requirements and verbatim
    primary-source citations.
obligations:
  - id: hud-4000-1-iii-a-2-d-must-accept-partial-payment
    canonical_id: hud-4000-1-iii-a-2-d-must-accept-partial-payment
    section: HUD Handbook 4000.1 III.A.2.d.i — Acceptance of Partial Payments
    description: |
      Unless subject to the exceptions in the Return of Partial Payments for
      Mortgage in Default section, [LENDER] must accept any Partial Payment
      and either apply the payment to the Borrower's account or identify
      the payment with the Borrower's account and hold the payment in a
      suspense account. When a full monthly installment due under the
      Mortgage is accumulated, [LENDER] must apply that amount to the
      Borrower's account.
    type: do
    audit_question: For every Partial Payment received on an FHA-insured Defaulted Mortgage (outside the enumerated exceptions), can [LENDER] evidence acceptance and either application to the Borrower's account or suspense-account holding, and application to the account once accumulated payments equal a full monthly installment?
    program_review: Do the P&Ps ensure Partial Payments are accepted (applied or identified-and-held in suspense) and applied to the account once accumulated amounts equal a full monthly installment, while accounting for the Return-of-Partial-Payments exceptions?
    file_review: Pull Partial-Payment events outside the exceptions; confirm acceptance, proper suspense handling, and application once a full installment accumulated.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: escrow_analyst
    cadence: per-partial-payment
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - partial-payment
      - default
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.d.i — Acceptance of Partial Payments
      source_class: hud-handbook-4000-1
      source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
      snapshot_id: 8c03836f77f317e1
      fetched_at: '2026-05-23T00:28:40Z'
      content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
      paragraph_quote: 'Default section, the Mortgagee must accept any Partial Payment and either: '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.d.i) at 2026-05-23.
    promoted_at: '2026-05-23T00:42:25+00:00'
    promoted_from: hud-4000-1-iii-a-2-d-roundb-v1.yaml
  - id: hud-4000-1-iii-a-2-d-full-monthly-application-order
    canonical_id: hud-4000-1-iii-a-2-d-full-monthly-application-order
    section: HUD Handbook 4000.1 III.A.2.d.ii(A) — Application of Partial Payments Totaling a Full Monthly Payment
    description: |
      When Partial Payments held for disposition total a full monthly
      Mortgage Payment, [LENDER] must apply Borrower payments in the
      HUD-prescribed order: MIPs due, charges for Ground Rents/taxes/special
      assessments (including PACE)/flood/fire and other hazard insurance,
      interest, amortization of principal, and Late Charges (consistent
      with TILA regulations).
    type: do
    audit_question: For every accumulated Partial Payment totaling a full monthly Mortgage Payment on an FHA-insured Defaulted Mortgage, can [LENDER] evidence application in the HUD-prescribed order (MIP, escrowed charges including PACE, interest, principal amortization, then Late Charges per TILA)?
    program_review: Do the P&Ps ensure accumulated Partial Payments equaling a full monthly payment are applied in the HUD-prescribed order (MIP, escrowed charges incl. PACE, interest, principal, then Late Charges per TILA)?
    file_review: Spot-check full-monthly Partial-Payment applications; confirm the HUD-prescribed application order.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: escrow_analyst
    cadence: per-partial-payment
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - payment-application
      - partial-payment
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.d.ii(A) — Standard
      source_class: hud-handbook-4000-1
      source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
      snapshot_id: 8c03836f77f317e1
      fetched_at: '2026-05-23T00:28:40Z'
      content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
      paragraph_quote: 'When Partial Payments held for disposition total a full monthly Mortgage Payment, '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.d.ii(A)) at 2026-05-23.
    promoted_at: '2026-05-23T00:42:25+00:00'
    promoted_from: hud-4000-1-iii-a-2-d-roundb-v1.yaml
  - id: hud-4000-1-iii-a-2-d-sfdms-status-code-and-oui-advance
    canonical_id: hud-4000-1-iii-a-2-d-sfdms-status-code-and-oui-advance
    section: HUD Handbook 4000.1 III.A.2.d.ii(B) — Required Documentation
    description: |
      When applying Partial Payments totaling a full monthly Mortgage
      Payment, [LENDER] must report the appropriate Status Code in the
      Single Family Default Monitoring System (SFDMS) and advance the
      Oldest Unpaid Installment (OUI) date one month.
    type: do
    audit_question: For every application of Partial Payments totaling a full monthly Mortgage Payment on an FHA-insured Defaulted Mortgage, can [LENDER] evidence reporting of the appropriate SFDMS Status Code and advancement of the OUI date by one month?
    program_review: Do the P&Ps ensure that on applying full-monthly Partial Payments, the appropriate SFDMS Status Code is reported and the Oldest Unpaid Installment date is advanced one month?
    file_review: Spot-check full-monthly Partial-Payment applications; confirm the SFDMS Status Code report and the one-month OUI advance.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: per-partial-payment-applied
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - sfdms
      - oui-tracking
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.d.ii(B) — Required Documentation
      source_class: hud-handbook-4000-1
      source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
      snapshot_id: 8c03836f77f317e1
      fetched_at: '2026-05-23T00:28:40Z'
      content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
      paragraph_quote: 'When applying Partial Payments totaling a full monthly Mortgage Payment, the '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.d.ii(B)) at 2026-05-23.
    promoted_at: '2026-05-23T00:42:25+00:00'
    promoted_from: hud-4000-1-iii-a-2-d-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-23T00:42:25+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-4000-1-iii-a-2-d-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from HUD Handbook 4000.1 III.A.2.d — Partial Payments for Mortgages in Default — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD Handbook 4000.1 III.A.2.d.i — Acceptance of Partial Payments

Default section, the Mortgagee must accept any Partial Payment and either:

Source: HUD Handbook 4000.1 III.A.2.d.i — Acceptance of Partial Payments · source URL · snapshot 8c03836f77f317e1

HUD Handbook 4000.1 III.A.2.d.ii(A) — Application of Partial Payments Totaling a Full Monthly Payment

When Partial Payments held for disposition total a full monthly Mortgage Payment,

Source: HUD Handbook 4000.1 III.A.2.d.ii(A) — Standard · source URL · snapshot 8c03836f77f317e1

HUD Handbook 4000.1 III.A.2.d.ii(B) — Required Documentation

When applying Partial Payments totaling a full monthly Mortgage Payment, the

Source: HUD Handbook 4000.1 III.A.2.d.ii(B) — Required Documentation · source URL · snapshot 8c03836f77f317e1