source:
  type: guide
  id: hud-4000-1-iv-b-claim-type-02-assignment-or-single-family-loan-sale-program
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Claim
    Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Claim
    Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iv-b-claim-type-02-assignment-or-single-family-loan-sale-program-full
  canonical_id: hud-4000-1-iv-b-claim-type-02-assignment-or-single-family-loan-sale-program-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Claim Type
    02 - Assignment or Single Family Loan Sale Program (07/01/2025)
  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 IV — b. Claim
      Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025)
    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. Claim Type 02 - Assignment or Single Family Loan Sale Program
      (07/01/2025) A Mortgagee participating in HUD’s SFLS Program or assigning a
      Mortgage to HUD under the Indian Land or Hawaiian Home Lands programs may submit
      a claim under Claim Type 02. i. Hawaiian Home Lands Mortgages (Section 247 Mortgages)
      Claims The Mortgagee may assign to HUD Mortgages in Default that are insured
      under Section 247 of the National Housing Act and file claims for mortgage insurance
      benefits. (A) Computation of Interest HUD will pay mortgage note interest accrued
      and unpaid at the time of assignment. HUD will pay debenture interest on the
      net claim amount, excluding mortgage note interest, from the date of assignment
      to the date of claim payment. If the Mortgagee fails to meet HUD’s time requirement
      to submit the claim, HUD will notify the Mortgagee of the date of curtailment
      to be entered in form HUD- 27011. (B) Computation of Claims The Mortgagee may
      claim up to 100 percent of the unpaid principal balance, plus allowable costs
      and debenture interest. HUD will reimburse the Mortgagee for reasonable and
      customary costs associated with the assignment as follows. (1) Allowable Costs
      The Mortgagee may claim reimbursement for: • fees paid to recorders of deeds
      or public trustees; • costs required by law; • property and preservation costs
      performed in accordance with HUD guidance before the date of assignment; and
      • other fees and costs necessarily incurred and are customary in the area. (2)
      Disallowable Costs The Mortgagee may not claim reimbursement for the following
      fees and costs: • fees and costs in excess of reasonable and customary fees
      and costs and lacking documentation supporting the amount claimed; • fees and
      costs unnecessary for the protection, acquisition, or conveyance of the Property,
      such as courier services, document retrieval, express mail, or property inspection
      by attorneys; IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook
      4000.1 1600 Last Revised: 11/26/2025 • Mortgagee’s overhead items such as postage,
      telephone, duplication, or collection services; and • costs for title policies.
      (C) Submission of Claim Form Parts to HUD for Hawaiian Home Lands Mortgages
      The Mortgagee may only file a claim after: • the Mortgagee has notified the
      Department of Hawaiian Home Lands (DHHL) of the Borrower’s Default by letter
      by the 90th Day of Delinquency; • the Borrower’s Default has remained uncured
      for 180 Days; • the Mortgagee has met all regulatory program requirements, including
      the Interview and required loss mitigation evaluation; and • HUD has issued
      the assignment acceptance letter to the Mortgagee via P260. The Mortgagee must
      submit form HUD-27011 to HUD via EDI or FHA Catalyst. For EDI submissions, the
      Mortgagee must submit Parts A and B simultaneously. For FHA Catalyst submissions,
      the Mortgagee must submit Parts A, B, C, D, and E. The Mortgagee must retain
      copies of all Parts of form HUD-27011 in the Claim File. ii. Insured Mortgages
      on Indian Land (Section 248 Mortgages) Claims With HUD approval, the Mortgagee
      may assign to HUD Mortgages that are in Default and are insured under Section
      248 of the National Housing Act and file claims for mortgage insurance benefits.
      (A) Computation of Interest HUD will pay mortgage note interest accrued and
      unpaid at the time of assignment. HUD will pay debenture interest on the net
      claim amount, excluding mortgage note interest, from the date of assignment
      to the date of claim payment, unless interest is curtailed. (B) Computation
      of Claim The Mortgagee may claim up to 100 percent of the unpaid principal balance,
      plus allowable costs and debenture interest. HUD will reimburse the Mortgagee
      for reasonable and customary costs associated with the assignment as follows.
      (1) Allowable Costs The Mortgagee may claim reimbursement for: • fees paid to
      recorders of deeds or public trustees; • costs required by law; IV. CLAIMS AND
      DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1601 Last Revised:
      11/26/2025 • property and preservation costs performed in accordance with HUD
      guidance before the date of assignment; and • other fees and costs necessarily
      incurred and are customary in the area. (2) Disallowable Costs The Mortgagee
      may not claim reimbursement for the following: • fees and costs in excess of
      reasonable and customary fees and costs and lacking documentation supporting
      the amount claimed; • fees and costs unnecessary for the protection, acquisition,
      or conveyance of the Property, such as courier services, document retrieval,
      express mail, or property inspection by attorneys; • Mortgagee’s overhead items
      such as postage, telephone, duplication, or collection services; and • costs
      for title policies. (C) Submission of Claim Form Parts for Section 248 Mortgages
      (1) Submission of Claim Form Parts to HUD The Mortgagee must submit form HUD-27011
      to HUD via EDI or FHA Catalyst. For EDI submissions, the Mortgagee must submit
      Parts A and B simultaneously. For FHA Catalyst submissions, the Mortgagee must
      submit Parts A, B, C, D, and E. The Mortgagee must retain copies of all Parts
      of the form HUD-27011 in the Claim File. (2) Submission of Claim Form Parts
      as Part of Request for Title Approval At the time the Mortgagee files its claim,
      the Mortgagee must send to HUD’s Loan Servicing Contractor: • copies of Parts
      A and B; • a copy of the original Mortgage; • a copy of the original Note with
      endorsement; • a copy of assignment to HUD; • copies of all intervening assignments;
      • the Mortgagee’s original title policy evidencing the Mortgage’s first lien
      position; • a copy of Part D; • a copy of the Title Submission Certificate;
      • the original of all hazard insurance policies and a copy of the notice to
      the insurance carrier requesting that HUD be named beneficiary in the Mortgagee
      clause; • documentation of the last tax bill paid; • all payment records and,
      if capitalization method is used, a worksheet showing allocation of payments
      per mortgage terms; IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types
      Handbook 4000.1 1602 Last Revised: 11/26/2025 • a copy of the buydown agreement,
      if any, and all documents which relate to the payment amount or application
      of the payments; • a copy of HUD’s letter approving assignment of a damaged
      Property under 24 CFR § 203.379(a), if applicable; • the Mortgagee’s certificate
      that the conditions of 24 CFR § 203.379(a)(2), relating to fire damage, have
      been met, if applicable; • documentation showing that the requirements of 24
      CFR § 203.604 have been met; • a statement relating to title defects if 24 CFR
      § 203.390 applies; and • for Section 235 Mortgages, the following documentation,
      if not otherwise provided to HUD: o the last two recertifications of family
      income and composition; o employment verifications; o a Notice of Suspension,
      Termination and Reinstatement of Assistance Payments Contract, if applicable;
      and o if the case is subject to Section 235 recapture of assistance payments,
      the total dollar amount of assistance applied to the account through the date
      of assignment. iii. Single Family Loan Sales Claims The SFLS Program is a program
      through which participating Mortgagees may file assignment claims for insurance
      benefits. SFLS claims are only authorized in connection with the execution of
      a Participating Servicer Agreement (PSA) between HUD and the Mortgagee for an
      identified Distressed Asset Stabilization Program (DASP) sale, which is the
      sale through which HUD will dispose of the asset after payment of the claim.
      The SFLS claim is governed by the specific terms of the PSA for the specific
      DASP sale identified in the PSA. (A) Claim Submission Process The Mortgagee
      must follow the initial claim submission and claim submission report procedures
      set forth in the PSA. Upon the Mortgagee’s compliance with these procedures,
      HUD will enter an SFLS Claim Identification Date in the claims processing system.
      On the business day after the award of the pools of Mortgages, HUD will enter
      a list of awarded Mortgages (Award Report) in the claims processing system.
      For Mortgages with an SFLS Claim Identification Date and that are included in
      the Award Report, the Mortgagee may submit assignment claims until the Claims
      Cut-off Date noted on Schedule I of the PSA. The Mortgagee may only submit assignment
      claims for eligible mortgages as defined in the PSA. IV. CLAIMS AND DISPOSITION
      A. Title II Claims 2. Claim Types Handbook 4000.1 1603 Last Revised: 11/26/2025
      For Mortgages that are not awarded in the sale, the Mortgagee may submit insurance
      claims under CWCOT procedures and as further described in the PSA. (B) Submission
      of Claim Form Parts to HUD for SFLS (1) To HUD The Mortgagee must submit Part
      A and Part B to HUD headquarters via EDI or FHA Catalyst. When submitting via
      FHA Catalyst, the Mortgagee must also submit Parts C, D, and E. (2) To P260
      The Mortgagee must upload into P260: • a copy of Parts A, B, C, D, and E; •
      documentation of the last tax bills paid to each taxing authority; and • any
      supporting documentation required by the PSA.'
  judgment: false
