NOTICE TO HOMEOWNER
Property Address :
Assumption of HUD/FHA-Insured Mortgages
Release of Personal Liability
You are legally obligated to make the monthly payments required by your mortgage (deed of trust) and promissory
The Department of Housing and Urban Development (HUD) has acted to keep investors and noncreditworthy
purchasers from acquiring one- to four-family residential properties covered by certain FHA-insured mortgages.
There are minor exceptions to the restriction on investors: loans to public agencies and some nonprofit
organizations, Indian tribes or servicepersons; and loans under special mortgage insurance programs for property
sold by HUD, rehabilitation loans or refinancing of insured mortgages. Your lender can advise you if you are
included in one of these exceptions.
HUD will therefore direct the lender to accelerate this FHA-insured mortgage loan if all or part of the property is
sold or transferred to a purchaser or recipient (1) who will not occupy the property as his or her principal
residence, or (2) who does occupy the property but whose credit has not been approved in accordance with HUD
requirements. This policy will apply except for certain sales or transfers where acceleration is prohibited by law.
When a loan is accelerated, the entire balance is declared ''immediately due and payable." Since HUD will not
approve the sale of the property covered by this mortgage to an investor or to a person whose credit has not been
approved, you, the original homeowner, would remain liable for the mortgage debt even though the title to the
property might have been transferred to the new buyer.
Even if you sell your home by letting an approved purchaser (that is, a creditworthy owner-occupant) assume your
mortgage, you are still liable for the mortgage debt unless you obtain a release from liability from your mortgage
lender. FHA-approved lenders have been instructed by HUD to prepare such a release when an original homeowner
sells his or her property to a creditworthy purchaser who