HUD Seeks Comments on FHA Multifamily Default Reporting System

HUD is seeking public comments on a proposed revision to the information collection used by FHA-approved multifamily lenders to report delinquent and defaulted mortgages.

The September 15 Federal Register notice covers the Multifamily Delinquency and Default Reporting System, commonly identified as MDDR.

Comments are due November 16, 2026.

The notice does not create a new definition of default or immediately change the reporting obligations imposed on FHA multifamily lenders. HUD is seeking renewed Office of Management and Budget approval for the electronic information collection, with revisions, under the Paperwork Reduction Act.

Reporting Begins After a Loan Is More Than 30 Days Past Due

Federal regulations require an FHA-approved mortgagee to notify HUD when an insured multifamily mortgage payment becomes more than 30 days past due.

Lenders must also report later developments involving the loan, including:

• Continued delinquency;

• A formal default;

• Reinstatement of the mortgage;

• An election to assign the mortgage to HUD;

• Changes in the project’s financial condition; and

• Other servicing statuses required by HUD.

The electronic reporting system replaced the former paper HUD-92426 form.

HUD uses the reported information to identify financially troubled properties, monitor lender servicing activity and begin working with lenders and owners before a default results in an FHA insurance claim.

The System Functions as an Early Warning Tool

A missed mortgage payment can signal problems extending beyond the loan itself.

Potential causes may include:

• Insufficient rental income;

• Rising vacancy;

• Uncollected tenant rent;

• Unexpected repair costs;

• Insurance increases;

• Utility expenses;

• Delayed subsidy payments;

• Interest-rate pressure;

• Weak financial controls; or

• Major physical deficiencies.

HUD uses MDDR data to identify distressed projects early enough to evaluate corrective options.

Those options may include a repayment plan, mortgage modification, additional owner contributions, management changes, expense controls, use of reserve funds or another approved workout strategy.

Accurate reporting does not guarantee that a loan will be reinstated. It gives HUD, the lender and the owner more time to assess the problem before the available options narrow.

HUD Estimates 400 Lenders Will Respond

HUD expects approximately 400 FHA-approved multifamily lenders to respond to the collection.

The department estimates:

• 2,400 annual responses;

• An average of 30 minutes per response; and

• A total annual burden of 1,200 hours.

HUD lists the response frequency as once per year, but the practical reporting frequency for an individual lender will depend on the number of insured mortgages experiencing reportable events.

A lender with multiple delinquent loans or repeated status changes may need to make several submissions.

Owners are not listed as the formal respondents. However, lenders rely on owners and management agents for much of the operating, financial and property-level information needed to understand a delinquency and report its status accurately.

Owners Should Not Wait for the Lender’s Report

An owner that expects difficulty making a mortgage payment should contact the lender before the payment becomes more than 30 days past due.

Waiting can limit the time available to evaluate the property’s cash position and potential corrective measures.

Owners should be prepared to provide:

• Current rent rolls;

• Occupancy and vacancy reports;

• Accounts-receivable aging;

• Recent operating statements;

• Current bank balances;

• Reserve-account information;

• Accounts-payable aging;

• Delinquent tenant balances;

• Capital-needs information;

• Major insurance or utility increases;

• Information about subsidy interruptions; and

• A realistic plan for restoring mortgage payments.

Information supplied to the lender should be consistent with the project’s books, audited financial statements and prior HUD submissions.

Conflicting information can delay a workout and create additional servicing or compliance concerns.

Reinstatements Must Also Be Reported

MDDR is not limited to reporting negative events.

When an owner cures the delinquency and restores the mortgage to current status, the lender must report the reinstatement.

That update is important because it closes or changes the active default record and allows HUD to evaluate the outcome of the servicing activity.

Lenders should verify that the required funds have cleared and that the loan satisfies the applicable reinstatement requirements before reporting it as current.

Owners should retain documentation showing:

• The amount paid;

• The date payment was transmitted;

• The period covered by the payment;

• Any late charges or servicing costs;

• The source of cure funds; and

• Written confirmation from the lender.

Assignment to HUD Has Separate Timing Requirements

The regulations also govern circumstances in which a mortgagee may elect to assign a defaulted FHA-insured mortgage to HUD.

Assignment is a significant action. It transfers the lender’s rights under the mortgage to HUD in exchange for payment of the applicable insurance benefits.

A lender must follow the required timeline and provide the information needed to support the election.

Missing an applicable deadline or submitting incomplete information can affect the lender’s rights and HUD’s ability to process the assignment.

Projects approaching this stage should involve experienced FHA servicing counsel and asset-management professionals.

HUD Wants Comments on Four Questions

The Federal Register notice requests feedback on four areas.

HUD asks whether:

1. The information collection is necessary and has practical utility;

2. The estimated reporting burden is accurate;

3. The quality, usefulness and clarity of the collected information can be improved; and

4. Technology or other methods could reduce the burden on respondents.

Useful comments should provide operational evidence.

A lender that believes 30 minutes per response is inaccurate should explain how long a typical submission takes, which records must be reviewed and what follow-up work is required.

Commenters recommending automation should identify the data fields that could be imported from servicing systems and describe safeguards needed to preserve accuracy.

Comments Will Be Public

Comments may be submitted electronically through Regulations.gov.

The docket is HUD-2006-0348, and the direct comment page is:

https://www.regulations.gov/commenton/HUD-2006-0348-0011

Comments should identify the information collection by name and reference OMB Control Number 2502-0041.

Organizations may attach supporting documents.

Material submitted to the docket becomes publicly accessible. Commenters should not include confidential borrower records, personally identifiable information or protected financial data.

Comments may also be submitted to HUD by the method listed in the Federal Register notice.

What Servicing Teams Should Review

The comment period provides an opportunity for FHA multifamily lenders to examine their internal default-reporting procedures.

A compliance review should address:

• How delinquent payments are identified;

• Who determines that an event is reportable;

• How the lender calculates the 30-day threshold;

• Who submits information through MDDR;

• How owner-provided data is verified;

• How status changes are tracked;

• How reinstatements are documented;

• Who monitors assignment deadlines;

• How submission confirmations are retained; and

• How errors are corrected.

Written procedures should identify responsibility across servicing, asset management, legal and compliance teams.

The lender should also maintain evidence that the required report was submitted on time.

This Is an Information Collection Review

The notice is part of the Paperwork Reduction Act process.

HUD is asking OMB to approve a revision of an existing collection whose listed approval expiration date was July 31, 2026.

The notice does not itself amend 24 CFR 207.256, 207.256a or 207.258.

It also does not suspend the underlying regulatory reporting obligations.

Lenders should continue following current HUD requirements while the information collection review proceeds.

The Bottom Line

HUD is reviewing the electronic system used by FHA-approved multifamily lenders to report delinquency, default, reinstatement and assignment activity.

A mortgage that becomes more than 30 days past due triggers an important reporting threshold.

HUD estimates that 400 lenders will submit 2,400 responses annually, creating a total estimated burden of 1,200 hours.

Comments are due November 16, 2026.

Lenders should use the comment period to evaluate whether HUD’s burden estimate reflects actual servicing work and whether better system integration could make reporting more accurate and efficient.

Owners should use the notice as a reminder that early communication with the lender matters. By the time a loan reaches formal default or assignment, many of the easiest corrective options may already be gone.