FHA Just Put a Limit on How Many Times You Can Ask for Another Review

Two things worth knowing right now, and they point at the same thing. How much room you’ve got left.

One is a federal rule with a hard date on it. The other is a number about who is still able to buy a house without a lender.

Three Refusals and FHA Calls It a Failure

This one isn’t fresh news and I’ll say that up front. HUD issued Mortgagee Letter 2026-08 on June 23. Servicers can put it in place now, and they have to have it in place no later than September 21. That’s seven weeks out, which is why it’s here.

Two changes in it, and both land on somebody behind on an FHA loan.

The first is about trial payment plans. A trial payment plan, TPP, is the three months of payments you make before a permanent modification gets signed. Four months if you’re in imminent default, six if you took title through certain kinds of transfer. Under the new letter, if you fail to accept a TPP agreement a third time during the same default, that counts as a failure. HUD says why in plain words: to stop borrowers from deliberately refusing a plan over and over.

Here’s the part that catches people out. You don’t accept a trial payment plan by signing anything. You accept it by sending the first payment, in an amount equal to or greater than what the plan calls for. The servicer has to get you the agreement at least fifteen days before that first payment is due. So somebody sitting there waiting on paperwork to sign, who lets the payment date go past, has just not accepted it.

The second change is the bigger one.

The letter limits how many times you can send your file back in for another look in a way that stops foreclosure from starting. The new wording says a servicer may begin foreclosure after three full monthly payments are due and unpaid, once it has finished reviewing your first complete loss mitigation request, and any later complete request that followed a change in your circumstances.

“A change in your circumstances” is the phrase doing the work there. Sending the same file back in with nothing different in it no longer holds the clock.

Stay with me, because there’s a piece of this that isn’t in the general coverage.

The same letter says that when a trial payment plan fails and you aren’t eligible for another way to keep the house, the servicer has to evaluate you for Home Disposition Options. In FHA’s own handbook, home disposition is the exit side of the file, the pre-foreclosure sale and the deed in lieu. So the rule that tightens up the keep-the-house lane is the same rule that pushes the file toward a sale. There’s also an automatic 90-day extension written in, for the servicer to approve another option or to start or restart foreclosure after a TPP fails.

I’m not an attorney and I’m not a housing counselor. The letter is public and it’s short. Anybody whose file this touches might wanna read it, or put it in front of somebody who can advise on it.

None of that decides anything for you. What it changes is the timeline. If the plan has been to keep asking for another review while you work out what you actually want, there’s less room in that plan after September 21 than there is today. That’s a schedule, not a judgment on anybody.

Now the Other Number

NAR published its international transactions report on Wednesday. Foreign buyers bought 67,100 US homes in the twelve months from April 2025 through March 2026. The year before it was 78,100. Down 14 percent, and the second-lowest count NAR has recorded since it started tracking this in 2009. In dollars the fall is steeper, 19.1 percent, from $56 billion to $45.3 billion.

Florida drew 20 percent of those buyers, more than any other state. California was second at 19 percent, Texas third at 12.

Here’s the figure that sits on my beat. Forty-eight percent of foreign buyers paid all cash. Across all existing-home buyers it’s 28 percent. So this is the group that shows up without a lender, and it just got smaller.

One caution on the Florida piece. Twenty percent is Florida’s share of foreign buyers in this report. I haven’t verified last year’s Florida share, so I’m not going to tell you Florida specifically fell by any amount. What’s verified is that the national count dropped 14 percent, and Florida takes the biggest slice of whatever is left.

Lawrence Yun at NAR put the decline down to the same drop-off in international visitors and tourists, and said a slightly weaker dollar didn’t pull anybody back in.

Why a Condo Owner in Florida Should Care About Foreign Buyers

Because when a building can’t be financed, a cash buyer is the only buyer left.

That isn’t a theory in Florida right now, it’s most of the condo problem. Tomorrow, Monday August 3, Fannie Mae and Freddie Mac retire limited review. Projects over ten units then take a full review, and a building that fails one is a building where a normal buyer’s loan gets declined.

If you’re the one trying to sell in that building, the buyer you need is somebody who doesn’t need a bank. A lot of those buyers have historically come from outside the country. There are fewer of them than there were a year ago.

Most of the condo coverage right now is about assessments, inspections and reserves, which is the cost side. This is the other half of it. Who’s actually left to buy the thing.

So two different things narrowing at the same time. If you’re behind on an FHA loan, the room to keep asking gets smaller on September 21. If you’re trying to get out of a condo that lenders won’t lend on, the pool of buyers who can close without one already got smaller.

What’s Actually on the Table

If the payment is getting away from you, or the loan is bigger than the house, the choices are the same ones they’ve always been and they cost different things.

A regular sale, if there’s equity left in it. A short sale, which needs your lender’s approval, and nobody can promise you that approval. A deed in lieu. Loss mitigation with your servicer, which is what that HUD letter is about. Or letting it run to foreclosure.

Each one lands differently on your credit, on your taxes, and on what you might still owe when it’s finished. Florida is a recourse state, so that last piece is real here. And the forgiven-debt tax exclusion expired on January 1 of this year, which changed the tax side for a lot of people.

Those are legal, tax and credit questions. I’m not your attorney and I’m not your CPA.

One more thing, plainly. Falling behind isn’t a character problem. Most of the time it’s something that landed on somebody who was doing fine a year ago.

I’m based in Jacksonville and licensed in Florida. Questions come in from other states, and those go back out through the SFR referral network, because I don’t represent anybody outside Florida.

If you’ve got a question, email JimArmstrong904@gmail.com or call or text (904) 671-4161. No obligation, and no pitch waiting on the other end of it.

Jim Armstrong, REALTOR - Momentum Realty - SFR (Short Sales and Foreclosure Resource) certified. This is general information, not legal, tax, or financial advice.

Momentum Realty is not associated with the government, and our service is not approved by the government or your lender.