What is a Default?

Defaults in Relation to HUD 232 Loans

A default is a failure to comply with mortgage terms, make payments, or perform other obligations stated in the mortgage. In some situations, eligible HUD 232 borrowers can make use of HUD 223(d) operating loss loans in order to avoid a default. However, to qualify for a HUD 223(d) loan, a borrower must evidence their loss via audited financial statements, and the loss period cannot be any longer than 2 years.

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