source:
  type: regulation
  id: hud-4000-1-programs-and-products-assumptions
  authority: HUD Handbook 4000.1 — Programs and Products - Assumptions (08/19/2024)
  description: "HUD Handbook 4000.1 section \"Programs and Products - Assumptions\". Gap-fill (verbatim,\
    \ title-diff). \n"
obligations:
- id: hud-4000-1-programs-and-products-assumptions-full
  canonical_id: hud-4000-1-programs-and-products-assumptions-full
  section: HUD Handbook 4000.1
  description: "Programs and Products - Assumptions: n. Assumptions (08/19/2024) \nAssumption refers to\
    \ the transfer of an existing mortgage obligation from an existing \nBorrower to the assuming Borrower.\
    \ \nii. Occupancy Eligibility Requirements \nIf the original Mortgage was closed on or after December\
    \ 15, 1989, the assuming \nBorrower must intend to occ…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 — Programs and Products - Assumptions (08/19/2024)
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: "n. Assumptions (08/19/2024) \nAssumption refers to the transfer of an existing mortgage\
      \ obligation from an existing \nBorrower to the assuming Borrower. \nii. Occupancy Eligibility Requirements\
      \ \nIf the original Mortgage was closed on or after December 15, 1989, the assuming \nBorrower must\
      \ intend to occupy the Property as a Principal Residence or HUD-approved \nSecondary Residence.\
      \ \nIf the original Mortgage was closed prior to December 15, 1989, the assuming Borrower \nmay\
      \ assume the Mortgage as a Principal Residence, HUD-approved Secondary \nResidence or Investment\
      \ Property. \niii. Restrictions on Loan-to-Value Ratio \n(A) Investment Property \nThe maximum Loan-to-Value\
      \ (LTV) for an Investment Property assumption is 75 \nEither the original appraised value or new\
      \ Property Value may be used to determine \ncompliance with the 75 percent LTV limitation. \n(B)\
      \ HUD-Approved Secondary Residence \nThe maximum LTV for a HUD-approved Secondary Residence assumption\
      \ is 85 \nEither the original appraised value or new Property Value may be used to determine \n\
      compliance with the 85 percent LTV limitation. \niv. Processing of an Assumption \n(A) Initiating\
      \ Processing \nThe Mortgagee must notify HUD via FHA Connection (FHAC) of assumptions: \n• within\
      \ 15 Days of any change of Borrower; or \n• within 15 Days of the date the Mortgagee receives actual\
      \ or constructive \nknowledge of the transfer of ownership. \nThis notification does not formally\
      \ release the original Borrower from personal \nliability for the mortgage Note. \n\n \n(B) Release\
      \ of Liability \nThe Mortgagee must prepare form HUD-92210.1, Approval of Purchaser and \nRelease\
      \ of Seller, thereby releasing the original owner when they sell by assumption \nto the assuming\
      \ Borrower who executes an agreement to assume the Mortgage and to \npay the debt. \nv. Underwriting\
      \ Review \nAssuming Borrowers must be underwritten in accordance with Origination through Postclosing/Endorsement,\
      \ except for the following sections: \n• Ordering Case Numbers \n(A) Exceptions in Case of Transfer\
      \ by Devise or Descent \nThe Mortgagee may process an assumption without credit review of the assuming\
      \ \nBorrower if the transfer is by devise or descent, or other circumstances in which the \ntransfer\
      \ cannot legally lead to exercise of the due-on-sale, such as a divorce in which \nthe party remaining\
      \ on title retains occupancy, and the assuming Borrower can \ndemonstrate that they have made the\
      \ Mortgage Payments for a minimum of six \nmonths prior to the date of application of the assumption.\
      \ \n(B) Exception to Minimum Required Investment \nThe assuming Borrower is not required to make\
      \ a cash investment in the Property. \nThe assuming Borrower may assume 100 percent of the outstanding\
      \ principal balance \nof the Mortgage, subject to the restrictions on LTV ratio for Investment Properties\
      \ \nand HUD-approved Secondary Residences. \n(C) Responsibility of Direct Endorsement Underwriter\
      \ \nThe holding or servicing Mortgagee is responsible for the underwriting review. The \nreview\
      \ must be completed by a Direct Endorsement (DE) underwriter registered by \nthe Mortgagee in FHAC.\
      \ Where the holding or servicing Mortgagee does not \noriginate Mortgages or is not approved under\
      \ the Direct Endorsement Program, it \nmay have an Authorized Agent perform the review. \n\n \n\
      (D) Use of TOTAL Mortgage Scorecard for Assumptions \nThe TOTAL Mortgage Scorecard must not be used\
      \ for assumptions. The DE \nunderwriter must manually underwrite the assumption. \nvi. Allowable\
      \ Fees and Charges \n(A) Processing Fee and Other Costs \nMortgagees may charge the assuming Borrower\
      \ a processing fee that is reasonable \nand customary not to exceed a maximum of $1,800. \nThe Mortgagee\
      \ may charge the assuming Borrower other costs in accordance with \nAllowable Charges Separate from\
      \ Assumption Processing Fees. \n(B) Interested Party Contributions \nThe seller or other Interested\
      \ Parties may make contributions toward the assuming \nBorrower’s actual closing costs consistent\
      \ with the requirements in Interested Party"
    drafter_attestation: Verbatim section from snapshot 8c03836f77f317e1; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
