source:
  type: guide
  id: hud-4000-1-iii-i-servicing-fha-insured-mortgages-for-servicemember-borrowers
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — i. Servicing
    FHA-Insured Mortgages for Servicemember-Borrowers (03/31/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — i. Servicing
    FHA-Insured Mortgages for Servicemember-Borrowers (03/31/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-i-servicing-fha-insured-mortgages-for-servicemember-borrowers-full
  canonical_id: hud-4000-1-iii-i-servicing-fha-insured-mortgages-for-servicemember-borrowers-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — i. Servicing
    FHA-Insured Mortgages for Servicemember-Borrowers (03/31/2022)
  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 — i. Servicing
      FHA-Insured Mortgages for Servicemember-Borrowers (03/31/2022)
    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: 'i. Servicing FHA-Insured Mortgages for Servicemember-Borrowers
      (03/31/2022) i. Servicemembers Civil Relief Act The Servicemembers Civil Relief
      Act of 2003 (SCRA) as amended by Public Law 108- 189, effective December 19,
      2003, provides legal protections and debt relief for persons in Active Duty
      military service. The following protections apply to the servicing of FHA- insured
      Mortgages: • mortgage relief; • termination of leases; • protection from eviction;
      • 6 percent cap on interest rates; • stays of proceedings; and • reopening Default
      Judgments. (A) Relief Provisions for the Military SCRA provides legal protections
      and debt relief for persons in Active Duty military service the criteria for
      which are established in 50 U.S.C. App. § 3911. Dependents of servicemembers
      are entitled to protection in limited situations. “Dependents” is also defined
      in 50 U.S.C. App. § 3911. (B) Obligations and/or Liabilities Prior to Entering
      into Active Military Service (1) Interest Rate Cap (a) Standard Obligations
      or liabilities incurred by a servicemember and/or servicemember’s spouse jointly
      before entering into active military service must not bear interest at a rate
      in excess of 6 percent per year during the period of military service and one
      year thereafter (unless superseded by updates to the SCRA Act), in the case
      of an obligation or liability consisting of a Mortgage, trust deed, or other
      security in the nature of a Mortgage. (b) Required Documentation The Mortgagee
      must apply the interest rate cap if it receives from the servicemember the documents
      listed below no later than 180 Days after the date of the servicemember’s termination
      or release from military service: • a written notice; • a copy of military orders
      calling the servicemember to military service; and • orders further extending
      military service, if any. III. SERVICING AND LOSS MITIGATION A. Title II Insured
      Housing Programs Forward Mortgages 3. Programs and Products - Servicing FHA-Insured
      Mortgages for Servicemember-Borrowers (03/31/2022) Handbook 4000.1 1363 Last
      Revised: 11/26/2025 (c) Mortgagee Implementation The Mortgagee must limit interest
      to 6 percent per year effective the date on which the servicemember is called
      to military service. Only a court may grant exceptions if the ability of the
      servicemember to pay interest upon the obligation or liability at a rate in
      excess of 6 percent per year is not materially affected by being in military
      service. (2) Reduction of Monthly Payments When interest must be reduced to
      6 percent on an FHA-insured Mortgage due to SCRA, the Mortgagee may calculate
      interest due for the period of Active Duty on a per diem basis or permit the
      lower interest rate for the entire first and last months of service. (a) Mortgagee
      is Notified of SCRA Applicability Where the servicemember notifies the Mortgagee
      of their eligibility for SCRA protection, the Mortgagee must: • advise the servicemember
      or representative of the adjusted amount due; • provide adjusted coupons or
      billings; and • ensure reduced payments are not returned as insufficient. (b)
      Mortgagee is Not Notified of SCRA Applicability Where the servicemember does
      not notify the Mortgagee of their eligibility for SCRA protection and submits
      a reduced payment, the Mortgagee must: • attempt to contact the Borrower or
      representative to determine whether the Borrower is on Active Duty; and • return
      insufficient payment if appropriate explanation is not provided and otherwise
      in compliance with HUD guidance. (C) Verification of Military Service The Mortgagee
      may request a statement of military service from the U.S. Department of Defense’s
      Servicemembers Civil Relief Act (SCRA) website. ii. Postponement of Foreclosure
      (A) Reasonable Diligence Time Frame Calculation When calculating deadlines to
      commence foreclosure or acquire Property by other means, the Mortgagee may exclude
      the period of time when the Borrower is in Active Duty military service. HUD
      does not consider postponement or delay in initiating a foreclosure while the
      Borrower is Active Duty military service a failure to exercise reasonable diligence.
      III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward
      Mortgages 3. Programs and Products - Servicing FHA-Insured Mortgages for Servicemember-Borrowers
      (03/31/2022) Handbook 4000.1 1364 Last Revised: 11/26/2025 The Mortgagee may
      voluntarily withhold foreclosure with or without applying Partial Payments that
      advance the date of Default. (B) Required Documentation The Mortgagee must document
      any delays associated with compliance with the SCRA in the Servicing File and
      the Claim File. III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing
      Programs Forward Mortgages'
  judgment: false
