source:
  type: guide
  id: hud-4000-1-iii-j-allowable-fees-and-charges
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — j. Allowable
    Fees and Charges (04/29/2024)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — j. Allowable
    Fees and Charges (04/29/2024).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-j-allowable-fees-and-charges-full
  canonical_id: hud-4000-1-iii-j-allowable-fees-and-charges-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — j. Allowable
    Fees and Charges (04/29/2024)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — j. Allowable
      Fees and Charges (04/29/2024)
    source_class: hud-handbook
    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: 'j. Allowable Fees and Charges (04/29/2024) i. Definition Allowable
      Fees and Charges refer to those costs associated with the servicing of the Mortgage
      that are permitted to be charged to the Borrower. III. SERVICING AND LOSS MITIGATION
      B. Title II Insured Housing Programs Reverse Mortgages 1. Servicing of FHA-Insured
      HECMs Handbook 4000.1 1457 Last Revised: 11/26/2025 (A) Monthly Servicing Fee
      (1) Definition A Monthly Servicing Fee is a fixed monthly charge for servicing
      activities of the Mortgagee starting in the month of loan closing and continuing
      through the life of the loan, including any applicable Deferral Period. The
      maximum allowable monthly servicing fee for a HECM with a monthly adjustable
      interest rate is $35. The maximum allowable monthly servicing fee for a HECM
      with a fixed or annually adjustable interest rate is $30. (2) Standard If the
      Mortgagee chose to assess a monthly servicing fee at closing, the Mortgagee
      must withdraw the monthly servicing fee from the existing Servicing Fee Set-Aside
      and add the amount of the monthly servicing fee to the HECM balance. (B) Additional
      Permissible Reasonable and Customary Fees and Charges The Mortgagee may collect
      reasonable and customary fees and charges that are not already paid with funds
      from the monthly servicing fee after the HECM is insured and as authorized by
      HUD below. All fees must be: • reasonable and customary for the local jurisdiction;
      • based on actual cost of the work performed or actual out-of-pocket expenses
      and not a percentage of either the face amount or the unpaid principal balance
      of the HECM; and • within the maximum amount allowed by HUD. No attorney fees
      may be charged for the services of the Mortgagee’s attorney. The Mortgagee may
      assess and add the following fees and charges to the outstanding principal balance:
      • a maximum of $20 for changing a Borrower’s payment plan; • charges and fees
      related to additional documents described in 24 CFR § 206.27(b)(10) and related
      title search costs; • substitution of Hazard Insurance policy other than at
      the renewal of the policy; • attorney or trustee fees associated with a foreclosure;
      • property inspections and preservation expenses; and • attorney fees and expenses
      when the Mortgagee is made a party to litigation by reason of the HECM. III.
      SERVICING AND LOSS MITIGATION B. Title II Insured Housing Programs Reverse Mortgages
      1. Servicing of FHA-Insured HECMs Handbook 4000.1 1458 Last Revised: 11/26/2025
      (C) Requests for Approval for Other Fees or Charges The Mortgagee may request
      approval from HUD for any fee, charge, or unusual service not specifically mentioned
      in this Handbook 4000.1. ii. Required Documentation The Mortgagee must include
      in the Servicing File: • documentation of the amount of any fees and charges
      paid or payable by the Borrower; • approval from HUD for any fees and charges
      requiring such approval; and • documentation supporting the actual cost of any
      work performed or out-of-pocket expenses.'
  judgment: false
