---
kind: "section"
citation: "24 C.F.R. § 1005.751"
title: "24"
number: "1005.751"
heading: "Loss mitigation advance."
url: "https://uscodex.org/cfr/24/1005.751"
---

# §1005.751. Loss mitigation advance.

- (a) **General.** A loss mitigation advance is a reimbursement by HUD to the Holder for the advancement of funds on behalf of the Borrower in the amount necessary to assist in the reinstatement of the Borrower's [Section 184](/cfr/24/184.md) Guaranteed Loan. The loss mitigation advance is a subordinate lien in favor of HUD. More than one loss mitigation advance may be made to an eligible Borrower.
- (b) **Borrower eligibility.** To be eligible for a loss mitigation advance:
  - (1) **The Borrower's Section 184 Guaranteed Loan is 90 or more days past due—**
  - (2) The Borrower has the ability to resume making on-time monthly loan payments and the property is owner occupied.
  - (3) [Reserved]
- (c) **Terms.** The loss mitigation advance shall:
  - (1) Include all arrearages, which refers to any amounts needed to bring the Borrower's [Section 184](/cfr/24/184.md) Guaranteed Loan current;
  - (2) Provide that all prior loss mitigation advances, if any, in total must not exceed 30 percent of the unpaid principal balance as of the date of default;
  - (3) Include any other terms and conditions, as may be prescribed by [Section 184](/cfr/24/184.md) Program Guidance; and
  - (4) Along with another loss mitigation, where applicable, fully reinstate the [Section 184](/cfr/24/184.md) Guaranteed Loan upon the Borrower's acceptance of the loss mitigation advance.

## Notes

### Authority

Authority: 12 U.S.C. 1715z-13a; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).

### Source

Source: 89 FR 20056, Mar. 20, 2024; 89 FR 22084, Mar. 29, 2024, unless otherwise noted.