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Can I do a deed-in-lieu of foreclosure if I have an FHA loan?

Q: Wells Fargo said I cannot do a deed-in-lieu of foreclosure because I have an FHA-insured loan. Is this true?

A: The FHA program utilizes deed-in-lieu (DIL) transactions as a portion of its toolkit, just as any other servicer would.

However, according to HUD, borrowers are not eligible if you can "financially make their mortgage payments.”  

There are also some other particulars outlined in this HUD document. If you cannot meet those requirements, you may not be eligible for a deed-in-lieu for your FHA-backed loan.

You can contact the FHA's National Servicing Center with questions at (877) 622-8525 or the FHA Outreach Center at (800) 225-5342.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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