HUD Mortgagee Letter 2022-07 — Update to the COVID-19 Recovery Loss Mitigation Options (40-Year Loan Modification)

hud-ml-2022-07

HUD ML 2022-07 establishes a 40-year (480-month) loan modification as part of the COVID-19 Recovery Loss Mitigation Options for FHA-insured forward Mortgages, by updating Handbook 4000.1 section III.A.2.o.iii(C), COVID-19 Recovery Home Retention Options.

Get this register: .xlsx .csv More bundles →

source:
  type: regulation
  id: hud-ml-2022-07
  authority: HUD Mortgagee Letter 2022-07 — Update to the COVID-19 Recovery Loss Mitigation Options (40-Year Loan Modification)
  description: |
    HUD ML 2022-07 establishes a 40-year (480-month) loan modification as part
    of the COVID-19 Recovery Loss Mitigation Options for FHA-insured forward
    Mortgages, by updating Handbook 4000.1 section III.A.2.o.iii(C),
    COVID-19 Recovery Home Retention Options.
obligations:
  - id: hud-ml-2022-07-implementation-deadline
    canonical_id: hud-ml-2022-07-implementation-deadline
    section: HUD ML 2022-07 — Effective Date
    description: |
      [LENDER] may implement the 40-year COVID-19 Recovery Modification provisions
      of HUD ML 2022-07 immediately but must implement them no later than 90
      calendar days from the date of publication of the ML (i.e., on or before
      July 17, 2022).
    type: do
    audit_question: Can [LENDER] demonstrate that the ML 2022-07 40-year COVID-19 Recovery Modification provisions were implemented in its loss-mitigation operations no later than 90 calendar days from publication of the ML?
    program_review: Does the program account for the implementation deadline — adopting the 40-year COVID-19 Recovery Modification provisions no later than July 17, 2022 (90 days from publication)?
    file_review: Review the loss-mit procedure version history; confirm the 40-year Recovery Modification was operational by the July 17, 2022 deadline.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - servicing
      - loss-mitigation
      - effective-date
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-07 — Effective Date
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-07hsgml.pdf
      snapshot_id: 183852014de18db6
      fetched_at: '2026-05-22T19:55:12Z'
      content_hash: sha256:6ad7345b02ad1fe7198770839f51906685733e2bb0958aa337dbc77730ce778e
      paragraph_quote: |-
        The provisions of this ML may be implemented immediately but must be 
        implemented no later than 90 calendar days from the date of publication of 
        this ML.
      drafter_attestation: |
        Copied verbatim from snapshot 183852014de18db6 (content.txt) at
        2026-05-22T20:00Z. Substring is the Effective Date trigger of
        ML 2022-07.
    promoted_at: '2026-05-22T20:55:56+00:00'
    promoted_from: hud-ml-2022-07-roundb-v1.yaml
  - id: hud-ml-2022-07-recovery-mod-40-year-step-5
    canonical_id: hud-ml-2022-07-recovery-mod-40-year-step-5
    section: 'HUD ML 2022-07 — COVID-19 Recovery Modification: 40-Year Modification Required When Lower Term Cannot Achieve Target (III.A.2.o.iii(C)(2)(c) Step 5)'
    description: |
      Where [LENDER] cannot achieve the target payment for a COVID-19 Recovery
      Modification at Step 4 (30-year modification with principal deferment) and
      the Borrower has available Partial Claim funds, [LENDER] must modify the
      Mortgage to a 40-year (480-month) Loan Modification and provide a Partial
      Claim. A 40-year Loan Modification is not available without a Partial Claim.
    type: do
    audit_question: For each COVID-19 Recovery Modification where Step 4 (30-year + deferment) did not achieve the target payment and Partial Claim funds were available, can [LENDER] evidence that the Mortgage was modified to a 480-month term with an accompanying Partial Claim?
    program_review: Does the program account for the waterfall condition — when Step 4 (30-year + deferment) cannot reach the target and Partial Claim funds are available, requiring a 480-month modification WITH a Partial Claim (40-year not available without one)?
    file_review: Spot-check Recovery Modifications where Step 4 missed the target and Partial Claim funds existed; confirm a 480-month term with an accompanying Partial Claim.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: per-loss-mitigation-evaluation
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - servicing
      - loss-mitigation
      - covid-19-recovery
      - loan-modification
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-07 — III.A.2.o.iii(C)(2)(c) Step 5
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-07hsgml.pdf
      snapshot_id: 183852014de18db6
      fetched_at: '2026-05-22T19:55:12Z'
      content_hash: sha256:6ad7345b02ad1fe7198770839f51906685733e2bb0958aa337dbc77730ce778e
      paragraph_quote: |-
        If the Mortgagee cannot achieve the target payment at Step 4 and 
        the Borrower has available Partial Claim funds, the Mortgagee must 
        modify the Mortgage to a 40-year (480-month) Loan Modification 
        and provide a Partial Claim. A 40-year Loan Modification is not 
        available without a Partial Claim.
      drafter_attestation: |
        Copied verbatim from snapshot 183852014de18db6 (content.txt) at
        2026-05-22T20:00Z. Substring is the Step 5 40-year-modification
        requirement incorporated into Handbook 4000.1
        III.A.2.o.iii(C)(2)(c) by ML 2022-07.
    promoted_at: '2026-05-22T20:55:56+00:00'
    promoted_from: hud-ml-2022-07-roundb-v1.yaml
  - id: hud-ml-2022-07-recovery-mod-report-within-90-days
    canonical_id: hud-ml-2022-07-recovery-mod-report-within-90-days
    section: HUD ML 2022-07 — COVID-19 Recovery Modification Reporting to HUD (III.A.2.o.iii(C)(2)(f)(ii))
    description: |
      [LENDER] must report the characteristics of all COVID-19 Recovery
      Modifications, including the rate and term, in FHA Connection (FHAC)
      within 90 Days of the executed COVID-19 Recovery Modification.
    type: do
    audit_question: For every executed COVID-19 Recovery Modification, can [LENDER] demonstrate that the modification characteristics (rate and term) were reported in FHAC within 90 Days of execution?
    program_review: Do the P&Ps ensure the rate and term of every executed COVID-19 Recovery Modification are reported in FHAC within 90 Days of execution?
    file_review: Pull executed Recovery Modifications; confirm FHAC reporting of rate and term within 90 Days of execution.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: per-modification
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - servicing
      - loss-mitigation
      - covid-19-recovery
      - fhac-reporting
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2022-07 — III.A.2.o.iii(C)(2)(f)(ii)
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-07hsgml.pdf
      snapshot_id: 183852014de18db6
      fetched_at: '2026-05-22T19:55:12Z'
      content_hash: sha256:6ad7345b02ad1fe7198770839f51906685733e2bb0958aa337dbc77730ce778e
      paragraph_quote: |-
        The Mortgagee must report the characteristics of all COVID-19 
        Recovery Modifications, including the rate and term, in FHAC 
        within 90 Days of the executed COVID-19 Recovery Modification.
      drafter_attestation: |
        Copied verbatim from snapshot 183852014de18db6 (content.txt) at
        2026-05-22T20:00Z. Substring is the FHAC reporting requirement
        for COVID-19 Recovery Modifications incorporated into Handbook
        4000.1 III.A.2.o.iii(C)(2)(f)(ii) by ML 2022-07.
    promoted_at: '2026-05-22T20:55:56+00:00'
    promoted_from: hud-ml-2022-07-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-22T20:55:56+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2022-07-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from HUD Mortgagee Letter 2022-07 — Update to the COVID-19 Recovery Loss Mitigation Options (40-Year Loan Modification) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD ML 2022-07 — Effective Date

The provisions of this ML may be implemented immediately but must be implemented no later than 90 calendar days from the date of publication of this ML.

Source: HUD ML 2022-07 — Effective Date · source URL · snapshot 183852014de18db6

HUD ML 2022-07 — COVID-19 Recovery Modification: 40-Year Modification Required When Lower Term Cannot Achieve Target (III.A.2.o.iii(C)(2)(c) Step 5)

If the Mortgagee cannot achieve the target payment at Step 4 and the Borrower has available Partial Claim funds, the Mortgagee must modify the Mortgage to a 40-year (480-month) Loan Modification and provide a Partial Claim. A 40-year Loan Modification is not available without a Partial Claim.

Source: HUD ML 2022-07 — III.A.2.o.iii(C)(2)(c) Step 5 · source URL · snapshot 183852014de18db6

HUD ML 2022-07 — COVID-19 Recovery Modification Reporting to HUD (III.A.2.o.iii(C)(2)(f)(ii))

The Mortgagee must report the characteristics of all COVID-19 Recovery Modifications, including the rate and term, in FHAC within 90 Days of the executed COVID-19 Recovery Modification.

Source: HUD ML 2022-07 — III.A.2.o.iii(C)(2)(f)(ii) · source URL · snapshot 183852014de18db6