Policy Shift Follows FHA Loss Mitigation Update
“In 2025, the FHA updated its single-family loss mitigation waterfall and reinstated required TPPs before certain workout options, such as partial claims, can be approved.” Under this framework, “delinquent borrowers must first complete a TPP before receiving a final loss mitigation solution.”
As a result, “servicers have evaluated more delinquent FHA loans for assistance under the new waterfall,” leading to “the volume of loans in TPP status” increasing and “pushed issuer delinquency rates higher,” according to Ginnie Mae.
Temporary Exclusion to Stabilize Metrics
“However, as the new loss mitigation policy matures, the volume of TPPs is expected to normalize,” said Ginnie Mae president Joseph Gormley in an April 24 memorandum. “Therefore, Ginnie Mae will temporarily exclude loans on TPPs when calculating delinquency ratios for compliance purposes until the volume of TPPs returns to expected levels.”
The change is “effective with the monthly reporting due April 2, 2026, which covers March 2026 data.”
Rising Delinquency Rates Driven by FHA Loans
According to Intercontinental Exchange (ICE)’s April 2026 Mortgage Monitor, “the national delinquency rate reached 3.72% in February, up 7 basis points from January and up 20 bps from a year earlier.” The report noted that “FHA mortgages account for more than 80% of the recent rise,” with “seriously delinquent FHA loan volumes up more than 40% over that period.”
Ginnie Mae data further showed that “FHA delinquencies averaged 9.2% from October 2025 through February 2026 — up 90 basis points from the prior year.”
Early-Stage Indicators Remain Stable
Despite higher overall delinquency levels, “early-stage metrics remain stable: new delinquencies averaged 5.2%, and 60-day delinquencies held around 1.8%.” At the same time, “the ratio of pooled FHA loans that are seriously delinquent has increased by 128 basis points.”
“A meaningful deterioration in mortgage credit performance would typically be reflected in a rapid increase in loans rolling from current or early-stage delinquency into 90+ day delinquency. The data does not show such a shift,” the report stated. “The data suggests that the recent increase in reported delinquency levels for FHA loans in Ginnie Mae pools is driven primarily by the longer resolution timeline created by the TPP requirement.”
Compliance Impact for Issuers
“For issuers, this means loans in TPPs will not count as delinquent for purposes of ratio compliance, even though they remain reported as delinquent in standard monthly loan-level reporting.”
Ginnie Mae added that it “will regularly monitor the impact of TPP loans on issuer delinquency performance” and “will give at least 60 days’ notice before returning to its standard calculation through a future memorandum.”
Potential Broader Policy Review Ahead
Looking ahead, the corporation said it “expects to review its delinquency threshold policy more broadly in the context of today’s marketplace,” signaling “potential longer-term changes to how delinquency risk is measured and enforced for issuers.
