A partial claim mortgage is a zero-interest second lien that pays your missed FHA or VA mortgage payments so the loan is brought current. You do not repay it monthly; it comes due when you sell, refinance or pay off the first mortgage. For many California homeowners behind on a government-backed loan, it can stop a foreclosure without a lump-sum reinstatement.
If you have already received a Notice of Default or a sale date, time matters. Call (415) 754-0115 to schedule a free consultation, or send a message through our contact page, and an attorney can review where your loan stands.
How a partial claim mortgage actually works
When you fall behind, the arrears (missed principal, interest, escrow for taxes and insurance, and certain servicer charges) sit on top of your loan. A regular reinstatement requires paying all of that at once. A partial claim takes a different route.
The FHA version
For FHA-insured loans, the Department of Housing and Urban Development (HUD) pays the servicer an amount that covers the arrearage. In exchange, you sign a promissory note and a subordinate mortgage (in California, a second deed of trust) in favor of HUD. That note carries no interest and no monthly payment. It is repaid when the first mortgage is paid off, when you sell or refinance, or when the loan otherwise ends. HUD caps how much of your unpaid principal balance can be placed in partial claims over the life of the loan, and it sets rules on how often a borrower can use one.
The VA version
For VA-backed loans, the VA Home Loan Reform Act of 2025 created the VA Partial Claim Program. Servicers review eligible veterans, may require a trial payment period first, and once the claim is completed the arrears are paid and the VA takes a subordinate lien on the home with no monthly payment required. Like the FHA tool, it is repaid when the home is sold, refinanced or the first loan is paid off.
What a partial claim does not do
It does not erase the debt. The amount you owe overall stays the same; it is simply moved into a silent second lien. It also does not help with conventional loans held by Fannie Mae, Freddie Mac or private lenders, which have their own deferral and modification programs.
Who usually qualifies
Eligibility rules are set by HUD and the VA and are updated through mortgagee letters and circulars, so the details change. In general terms, servicers look at the following:
- Owner occupancy. The home is typically your primary residence.
- A real but recoverable hardship. Job loss, reduced hours, illness, divorce or a death in the family, followed by income that can support the regular monthly payment again.
- Room under the cap. Prior partial claims count against the program limit.
- Completed trial payments, where the program requires them.
- A complete loss mitigation application, including pay stubs, bank statements, tax returns and a hardship letter.
Servicers often combine a partial claim with a loan modification that changes the interest rate or term on the first mortgage. Whether a standalone partial claim or a combination is offered depends on the "waterfall" of options the servicer is required to run.
Where it fits in a foreclosure prevention strategy
A partial claim is one tool, not a whole plan. Most California foreclosures on owner-occupied homes are non-judicial: the trustee records a Notice of Default, at least three months pass, and then a Notice of Trustee's Sale is recorded and posted at least 20 days before the sale. A loss mitigation review can run during that timeline, and California's Homeowner Bill of Rights limits "dual tracking," meaning a servicer generally may not move ahead with a sale while a complete first-lien application is pending.
That protection depends on the application being complete and submitted in time. Missing documents, unanswered requests and late submissions are the most common reasons homeowners lose that protection. This is where a foreclosure defense attorney who also handles loan modifications and bankruptcy can be useful: Bob Somal, Esq. represents individuals across Pleasanton, the Tri-Valley and Alameda and Contra Costa Counties, and can track deadlines, communicate with the servicer and raise problems with how the review was handled.
When a partial claim may not be enough
If the servicer denies the request, if the arrears exceed what the program allows, or if a sale date is days away, other routes may need to be weighed. A Chapter 13 filing triggers the automatic stay and lets arrears be paid through a three- to five-year plan. Our article on whether bankruptcy can stop a foreclosure explains that path. A short sale may make sense when keeping the home is not realistic.
Red flags and practical tips
- Be wary of anyone who asks for money up front to "get you a partial claim." California restricts advance fees for mortgage loan modification services.
- Keep copies of everything you send and write down the date, the name of each person you speak to and what was promised.
- Read the partial claim documents before signing. Confirm the amount of the subordinate lien and that the first mortgage will be reported as current.
- Keep making any trial payments on time and by a traceable method.
- Ask for any denial in writing, along with the reason and any appeal deadline.
Frequently asked questions
Does a partial claim mortgage raise my monthly payment?
The partial claim itself has no monthly payment and no interest. Your first mortgage payment stays the same unless the partial claim is paired with a modification that changes the rate or term.
What happens to the partial claim if I sell the house?
The subordinate lien is paid from the sale proceeds at closing, just like any other lien recorded against the property. The same happens on a refinance.
Can I get a partial claim on a conventional loan?
No. FHA and VA partial claims apply only to those government-backed loans. Conventional loans have different tools, such as payment deferral or modification, and an attorney can explain which ones might apply to you.
Can I apply after a Notice of Trustee's Sale is recorded?
Often yes, but protections against the sale depend on timing and on whether the application is complete. If a sale date has been set, an attorney can review how much time remains and which options are still open.
Every loan and every hardship is different. Call (415) 754-0115 to schedule your free consultation with The Somal Law Firm, or use our contact form as a second option. Bring your most recent mortgage statement and any letters from your servicer, and Bob Somal, Esq. will walk through your options, from a partial claim to bankruptcy, in plain terms.
Attorney Advertising. This article is general legal information for Bay Area residents, not legal advice, and does not create an attorney–client relationship. Every situation is different — please consult a licensed attorney about your specific circumstances.