FHA loan delinquencies: Is a perfect storm brewing?

"According to the Mortgage Bankers Association Q4 2025 National Delinquency Survey, 4.26% of all mortgage loans were delinquent but not in foreclosure at the end of the year. But conventional loans had a near-record low level of delinquency at 2.89%, while FHA loans were past due at a much higher rate of 11.52% the highest delinquency rate (excluding the COVID period) since 2012."

"In its April 2026 Mortgage Monitor, ICE reported that severe delinquencies loans 90 or more days past due or in foreclosure had increased by 25% over the past four months. The report noted that FHA loans have accounted for more than 80 percent of the recent increase, with seriously past due FHA volumes up by more than 40 percent over that span."

"The FHA revised its loss mitigation policies on Oct. 1, 2025 in two critical ways. First, it removed the option of exercising multiple partial claims that borrowers (and servicers) were using, which had been providing delinquent FHA borrowers a way to tap into their home equity to catch up on missed payments."

FHA loans are experiencing their highest delinquency rates since 2012, reaching 11.52% compared to conventional loans at 2.89%. Severe delinquencies increased 25% over four months, with FHA loans accounting for over 80% of this increase and seriously past due FHA volumes rising more than 40%. FHA defaults increased 12% during this period, while cure rates declined 40% overall and 70% for FHA loans. These deteriorating metrics stem from FHA policy changes implemented October 1, 2025, which eliminated the option of multiple partial claims. Previously, borrowers could repeatedly use partial claims to tap home equity and catch up on missed payments, creating a cycle where delinquent borrowers were reclassified as current, only to become delinquent again.

Read at www.housingwire.com