source:
  type: guide
  id: hud-4000-1-iii-b-assumptions
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — b. Assumptions
    (12/30/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — b. Assumptions
    (12/30/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-b-assumptions-full
  canonical_id: hud-4000-1-iii-b-assumptions-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — b. Assumptions
    (12/30/2025)
  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 — b. Assumptions
      (12/30/2025)
    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: 'b. Assumptions (12/30/2025) i. Assumability of FHA-Insured Mortgages
      All FHA-insured Mortgages are assumable. The Mortgagee must not impose, agree
      to, or enforce legal restrictions on conveyances or assumptions after closing
      except when: • specifically permitted by HUD regulations; or • the restriction
      had been specified in a junior lien granted to the Mortgagee after settlement.
      The Mortgagee must review the mortgage documents to determine what restrictions
      have been placed on the Mortgage. Anyone assuming an FHA-insured Mortgage must
      have a valid SSN or EIN or meet the eligibility requirement exception regarding
      social security numbers. ii. Notice to Homeowner The Mortgagee must send the
      applicable Notice to Homeowner: Release of Personal Liability to: • all applicants
      for FHA-insured Mortgages, before settlement; and • sellers or buyers who request
      information on HUD’s creditworthiness review criteria or procedures for assumptions
      or releases from personal liability. iii. Fees for Assumptions The Mortgagees
      may charge the assuming Borrower a processing fee that is reasonable and customary,
      as set in Processing Fees and Other Costs for Assumptions. (A) Allowable Charges
      Separate from Assumption Processing Fees The Mortgagee may charge the assuming
      Borrower reasonable and customary fees not to exceed the actual costs for third
      party expenses incurred in connection with assumption processing: • non-refundable
      fees for credit reports and verifications of employment; and • up to $45.00
      for fees for the preparation and execution of release of liability forms (form
      HUD-92210.1, Approval of Purchaser and Release of Seller), where a Borrower
      requests an executed release of liability form as evidence that the Borrower
      was released during a previous creditworthiness review. (B) Refund of Assumption
      Processing Fees In the event a Mortgage is not assumed, Mortgagees must refund
      one-half of its processing fees if the assumptor’s credit is approved, but assumption
      does not occur for reasons beyond the control of the assumptor. III. SERVICING
      AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 3.
      Programs and Products - Assumptions (12/30/2025) Handbook 4000.1 1346 Last Revised:
      11/26/2025 (C) Change of Hazard Insurance The Mortgagee may not assess a fee
      for processing the assumptor’s request to change hazard insurance coverage when
      the existing policy has not yet expired. (D) Section 143 of the Internal Revenue
      Code of 1986 The Mortgagee must not charge the Borrower any additional fees
      for ensuring that assumptions of mortgage revenue bond Mortgages comply with
      requirements of the Internal Revenue Code (IRC). iv. Notification to HUD of
      Changes The Mortgagee must notify HUD via FHAC of assumptions: • within 15 Days
      of any change of Borrower; or • within 15 Days of the date the Mortgagee receives
      actual or constructive knowledge of the transfer of ownership. v. Payment of
      Partial Claim due to Assumption When the Borrower no longer owns the Property,
      the Partial Claim becomes due and payable. At the time of the assumption, the
      Mortgagee must acquire an official Partial Claim payoff letter from HUD''s Servicing
      Contractor. vi. Exercise of Due-on-Sale Clause When a prohibited sale or transfer
      of the Property occurs, the Mortgagee must enforce the due-on-sale clause by:
      • submitting a variance request to HUD via EVARS to accelerate the Mortgage,
      provided that acceleration is permitted by law; and • accelerating the Mortgage
      if approval is granted. vii. Acceleration of the Mortgage (A) Requests for Acceleration
      The Mortgagee may request approval from HUD to accelerate Mortgages for assumptions
      made: • without credit approval; or • where HUD assumption requirements are
      not met and the Borrower cannot or will not comply with HUD’s requirements at
      the time the assumption is discovered. III. SERVICING AND LOSS MITIGATION A.
      Title II Insured Housing Programs Forward Mortgages 3. Programs and Products
      - Assumptions (12/30/2025) Handbook 4000.1 1347 Last Revised: 11/26/2025 (B)
      Acceleration Not Permitted The Mortgagee may not accelerate for the assumptions
      when: • acceleration for assumption without credit approval is prohibited by
      state law; • the seller retains an ownership interest in the Property; or •
      the transfer is by devise or descent (with or without a will). viii. Communication
      with Borrowers Regarding Assumptions Upon any inquiry by a seller regarding
      HUD’s assumption requirements or upon learning that an assumption has occurred,
      the Mortgagee must: • attempt to obtain the forwarding address of the selling
      Borrower; • advise the selling Borrower to update the mailing address as needed;
      and • advise the selling Borrower that any existing PACE obligation that remains
      with the Property must be fully disclosed to the buyer in accordance with applicable
      law (state and local) and made part of the sales contract. ix. Reporting of
      Defaults on Assumed Mortgages to Consumer Reporting Agencies If an assumed Mortgage
      goes into Default, the Mortgagee must not report these Defaults to consumer
      reporting agencies for former Borrowers, whether those Borrowers remain legally
      liable for the mortgage debt or have been released from liability. The Mortgagee
      must notify any Borrowers that remain liable for the mortgage debt that the
      assumed Mortgage is in Default. III. SERVICING AND LOSS MITIGATION A. Title
      II Insured Housing Programs Forward Mortgages'
  judgment: false
