HUD Mortgagee Letter 2026-08

hud-ml-2026-08

HUD Mortgagee Letter 2026-08 (June 23, 2026) — Updates to Loss Mitigation Requirements. Updates Trial Payment Plan definitions/standard/failure and when to initiate foreclosure for FHA Title II forward programs; mandatory no later than September 21, 2026. Full verbatim text captured section-by-section from the HUD source PDF.

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Verbatim regulatory text (13)

Verbatim provisions from HUD Mortgagee Letter 2026-08 — 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 ML 2026-08 — Purpose

This Mortgagee Letter (ML) updates the requirements for Trial Payment Plans (TPP) and for reviewing Borrowers for loss mitigation options.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Purpose · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Effective Date

The provisions of this ML may be implemented immediately but must be implemented no later than September 21, 2026.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Effective Date · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Affected Programs

The provisions of this ML apply to all FHA-insured Title II Single Family forward mortgage programs.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Affected Programs · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Summary of Changes

updates Trial Payment Plans – Definitions (III.A.2.i.iii(C)(1)); • updates Trial Payment Plans – Standard (III.A.2.i.iii(C)(2)); • updates Trial Payment Plan Failure – Standard (III.A.2.i.iii(C)(5)(a)); and • updates When to Initiate Foreclosure (III.A.2.p.i(C)).

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Summary of Changes · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plans — Definitions (III.A.2.i.iii(C)(1))

A Trial Payment Plan (TPP) is a payment plan for a period of three months, four months for a Borrower in Imminent Default, or six months for Non-Borrowers Who Acquired Title through an Exempted Transfer, during which the Borrower must make the agreed-upon monthly payments beginning after the Mortgagee has approved the Borrower for a Permanent Home Retention Option or OWL, and prior to executing the permanent Loss Mitigation documents.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plans — Definitions (III.A.2.i.iii(C)(1)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plans — Standard: Trial Payment Plan Required (III.A.2.i.iii(C)(2)(a))

The Mortgagee must ensure the Borrower successfully completes a TPP for a period of three months before executing Permanent Home Retention Option or OWL documents.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plans — Standard: Trial Payment Plan Required (III.A.2.i.iii(C)(2)(a)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plans — Standard: Escrow Analysis (III.A.2.i.iii(C)(2)(a))

The Mortgagee must complete an escrow analysis before calculating the monthly payment under the TPP.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plans — Standard: Escrow Analysis (III.A.2.i.iii(C)(2)(a)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plans — Standard: Trial Payment Plan Agreement (III.A.2.i.iii(C)(2)(c))

The Mortgagee must provide the TPP Agreement to all parties that will be required to execute the Loss Mitigation Agreement for the Permanent Home Retention Option or OWL at least 15 Days before the date the first trial payment is due. The Borrower is not required to sign and return the TPP Agreement.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plans — Standard: Trial Payment Plan Agreement (III.A.2.i.iii(C)(2)(c)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plan Failure — Standard (III.A.2.i.iii(C)(5)(a))

The Borrower has failed a TPP when one of the following occurs:

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plan Failure — Standard (III.A.2.i.iii(C)(5)(a)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plan Failure — third-time non-acceptance (III.A.2.i.iii(C)(5)(a))

the Borrower fails to accept a TPP Agreement for a third time during the Default episode;

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plan Failure — third-time non-acceptance (III.A.2.i.iii(C)(5)(a)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plan Failure — SFDMS reporting (III.A.2.i.iii(C)(5)(a))

The Mortgagee must report a TPP failure in SFDMS, even if a subsequent TPP may be offered.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plan Failure — SFDMS reporting (III.A.2.i.iii(C)(5)(a)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Trial Payment Plan Failure — automatic 90-Day extension (III.A.2.i.iii(C)(5)(a))

HUD provides an automatic 90-Day extension for the Mortgagee to approve another Loss Mitigation Option, or to commence or recommence foreclosure, should a TPP fail.

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Trial Payment Plan Failure — automatic 90-Day extension (III.A.2.i.iii(C)(5)(a)) · source URL · snapshot 54ec5431e27dd7a6

HUD ML 2026-08 — Mortgagee Action before Initiation of Foreclosure — When to Initiate Foreclosure (III.A.2.p.i(C))

After at least three full monthly Mortgage Payments are due but unpaid, a Mortgagee may initiate a foreclosure for monetary Default if one of the following conditions is met:

Source: HUD Mortgagee Letter 2026-08 — Updates to Loss Mitigation Requirements — Mortgagee Action before Initiation of Foreclosure — When to Initiate Foreclosure (III.A.2.p.i(C)) · source URL · snapshot 54ec5431e27dd7a6