FHA Loss Sharing Termination

If you service mortgage loans that were delivered to Fannie Mae under an FHA Loss Sharing Agreement, you may be able to apply for termination of the loss sharing arrangement under certain conditions. See the Modified Risk Supplement to the DUS Master Loss Sharing Agreement for details.

The Supplement will specify the time period during which you may request termination, generally during the sixth through eighth calendar years following our purchase of the mortgage loan. Keep in mind that because you would no longer be retaining the risk of loss, you would no longer be able to retain a share of the guaranty fee and your servicing fee would decrease per the terms of the Supplement.

The table below lists the key points to consider in preparing a request for FHA loss sharing termination.

Guide Reference

Not applicable

Delegation Criteria

Fannie Mae must approve all requests to terminate FHA loss sharing.

What to Submit

Submit the following to Fannie Mae with your request:

  • Copy of the borrower’s request
  • Copy of Modified Risk Supplement to Delegated Underwriting and Servicing Master Loss Sharing Agreement and all amendments
  • Copy of the Multifamily Property Inspection (Form 4260)
  • The audited operating statement(s) covering the period(s) specified in the loss sharing agreement
  • A physical needs assessment (PNA)
  • Servicer’s narrative
    • Property name and address
    • Fannie Mae loan number
    • Reason for the request
    • Analysis of the operating statement(s)
    • The original underwriting analysis
    • Your recommendation

How to Submit

Generally: [email protected].

Hard Copy (if required by Fannie Mae)
Fannie Mae
Credit Services/Drawer AM
Mailstop 8H-607
3900 Wisconsin Ave. NW
Washington, DC 20016


Not applicable

Use of Funds

Not applicable


If we approve the request, you and Fannie Mae will follow the terms and conditions provided in the Risk Sharing agreement.

If we determine that all of the conditions have not been satisfied at the time of the review, then the Modified Risk Loan remains a mortgage loan under DUS and you would continue to have the same obligations under your DUS Master Loss Sharing Agreement.

Always consult the loan documents, transaction documents, your servicing agreement, the Multifamily Guide and the relevant forms for complete instructions.

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