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FHA Delinquencies Have Plateaued at 11.79% — and Georgia's FHA-Heavy Metros Are Feeling It First

FHA mortgage delinquency eased slightly to 11.79% in the second quarter of 2026 after peaking at 11.88% in Q1 — a five-year high that has stopped climbing but is aging into serious delinquency and foreclosure. Georgia, where FHA loans make up 26.7% of purchase mortgages, posted the fourth-largest state increase in delinquency and a 52% jump in foreclosure filings. Here is what changed in FHA's loss-mitigation rules, how much of the spike is a measurement artifact, and what Georgia's 30-day non-judicial clock means for borrowers who fall behind.

By Mortgage in Georgia Editorial··AI-assisted
This article may be AI-assisted and is published as general editorial information. Verify current rates, program rules, and lender requirements with primary sources before acting on it.
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Line chart of the FHA delinquency rate plateauing at 11.79% next to a Georgia foreclosure map.

The number making the rounds is 11.88% — the share of FHA-insured mortgages that were delinquent in the first quarter of 2026, according to the Mortgage Bankers Association's National Delinquency Survey released May 14, 2026. It is a real figure and it is a five-year high. But it is no longer the most recent one, and the story it tells is not quite the story the headline number suggests.

In the second-quarter survey, the FHA delinquency rate eased 9 basis points to 11.79%. It is still up 122 basis points from a year earlier. What has changed is the direction and the composition: the rate has stopped climbing, but the distress inside it is migrating from early-stage lateness into serious delinquency and foreclosure. As MBA's Marina Walsh put it, "FHA serious delinquencies are becoming pronounced, increasing more than 225 basis points from the previous year."

For Georgia, that migration matters more than it does almost anywhere else. Georgia posted the fourth-largest annual increase in overall mortgage delinquency of any state in Q1 2026, up 78 basis points — behind only Mississippi (+131 bps), Louisiana (+88 bps) and Maryland (+84 bps). And Georgia's borrower base is concentrated in exactly the loan channel that deteriorated.

What Actually Changed on October 1, 2025

Part of the reason the FHA line moved so sharply has nothing to do with borrowers missing more payments. It has to do with the rulebook servicers use when they do.

The pandemic-era FHA workout options — the COVID-19 Advance Loan Modification, the COVID-19 Recovery Options, and FHA-HAMP — expired September 30, 2025. Final documents could not be issued after that date. In their place, HUD activated a permanent loss-mitigation waterfall under Mortgagee Letter 2025-12, later amended by ML 2025-14 and ML 2025-21. The effective date was accelerated from a previously scheduled February 2, 2026 to October 1, 2025, compressing the window servicers had to migrate their systems.

Per HUD's borrower-facing page, the current home-retention waterfall runs in this order:

  • Informal or formal repayment plan

  • Forbearance

  • Standalone partial claim

  • Standalone loan modification

  • Combination loan modification plus partial claim

  • Payment supplement — a partial claim combined with three years of reduced payments

Two structural changes are worth knowing before you call your servicer. FHA-HAMP was eliminated outright. And borrowers are now limited to one permanent home-retention option every 24 months — up from the 18 months originally proposed — except following a Presidential disaster declaration. That limit is the single most consequential detail in the new rules for a borrower in trouble, and we will come back to it.

One caveat: HUD has signaled that the payment supplement option is under "overall evaluation… to determine if it should remain a part of HUD's loss mitigation program." That is the option most useful to a borrower who cannot afford a full reinstatement, so its status is worth confirming with your servicer rather than assuming.

Why a Trial Payment Plan Is Not the Same as Being Current

Here is the mechanism that inflates the headline rate. HUD states plainly that borrowers "may be required to agree to a trial payment plan (TPP) before you are approved for any loss mitigation home retention option."

During that trial period, the loan is still reported delinquent. It stays delinquent for survey purposes until the permanent workout is actually executed. So a borrower who called the servicer, qualified for help, and has made every trial payment on time is still counted inside the 11.79%.

MBA itself attributes part of the FHA increase to this mechanism. That is not a reason to dismiss the number — it is a reason to read it carefully. Some share of the spike is an accounting effect of the new waterfall routing more borrowers through trial plans. And it has a practical consequence borrowers should anticipate: while you are performing on a TPP, your credit report can still show a delinquent tradeline, and in a worst case you can find yourself in parallel default servicing while you are doing everything the servicer asked.

How Much of the Spike Is Real

The way to separate artifact from signal is to look at the stages a trial payment plan does not touch.

Serious delinquency — loans 90 days or more past due or in foreclosure — hit 2.06% in Q2 2026, up 49 basis points year over year, with FHA serious delinquencies up more than 225 basis points. Foreclosure inventory rose 19 basis points to 0.67%. Foreclosure starts came in at 0.20%.

Those are not TPP reporting effects. A loan does not land in foreclosure inventory because of a paperwork lag. The composition of the FHA number is shifting toward the stages that reflect genuine, unresolved distress — even as the top-line rate flattens.

For context on the rest of the market in Q2 2026: overall delinquency was 4.37% (down 7 bps quarter over quarter, up 44 bps year over year), conventional loans were at 2.72%, and VA loans at 4.89%. FHA is running roughly 900 basis points above conventional — more than four times the conventional rate. You may see a "six times conventional" figure circulating; that comparison uses FDIC bank-booked 1–4 family loan data, a different loan universe than MBA's conventional series. The ~900 basis point spread within MBA's own survey is the apples-to-apples number.

Why Georgia Is Exposed

FHA accounted for 26.7% of owner-occupied purchase mortgages in Georgia — the eighth-highest share in the country — on 30,519 FHA originations, or 4.8% of total U.S. FHA volume, up 6.9% year over year. That is based on 2025 HMDA data. Nationally, FHA was 20.3% of originations.

The reason is not complicated. FHA's lower down payment and more forgiving credit standards make it the default path for first-time and moderate-income buyers, and that describes a large share of the purchase market across metro Atlanta, Augusta, Macon and Columbus. Georgia's borrower base sits disproportionately in the one loan channel that deteriorated. When the FHA line moves, Georgia moves with it — with more leverage than a state where FHA is one loan in eight.

The Georgia Numbers on the Ground

Georgia recorded 8,433 foreclosure filings in the first half of 2026 — a 0.19% rate, or one in every 539 housing units — a 52% increase over the same period in 2025 and among the largest state increases in the country.

The metro-level detail is sharper:

  • Macon posted one of the five worst metro foreclosure rates in the nation: one in 492 housing units in Q1 2026, and 0.36% for the first half.

  • Atlanta recorded 2,520 foreclosure starts in Q1 2026, fifth among major metros.

  • Statewide, Georgia ranked fourth among all states with 4,356 foreclosure starts in Q1.

A 52% year-over-year increase off a low base is still a low base. But it is the trend line, and it is arriving in the same quarters that FHA serious delinquency is climbing.

Georgia's Clock Is Shorter Than Most Borrowers Think

This is the part that catches Georgia homeowners off guard, and it is the reason the state's numbers deserve more attention than a comparable increase elsewhere.

Georgia is a non-judicial foreclosure state. A lender does not have to file a lawsuit and win a judgment to sell your home. Under O.C.G.A. § 44-14-162.2, the required steps are:

  • Written notice to the debtor no later than 30 days before the proposed foreclosure sale, sent by registered or certified mail or statutory overnight delivery with return receipt requested.

  • The debtor must also receive a copy of the notice of sale that was sent to the publisher.

  • Notice of sale runs four consecutive weeks in the county legal organ.

There is no statutory right of redemption after a non-judicial sale in Georgia. Once the sale happens, it is done. In judicial-foreclosure states the process routinely runs a year or more; in Georgia the statutory floor is measured in weeks.

One provision in that statute is a usable lever rather than boilerplate: the notice must identify the individual or entity with "full authority to negotiate, amend, and modify all terms of the mortgage." That is a named contact with actual decision-making power, required by law to be disclosed to you. If you are holding a foreclosure notice, that name is the person to reach — not the general servicing queue.

Day 30 Versus Day 90: What to Actually Do

At day 30, call the servicer. Do not wait for a letter. Ask two specific questions: which of the six home-retention options am I being evaluated for, and will a trial payment plan be required first? Request the loss-mitigation packet in writing, and keep a record of the date you asked.

By day 90, you are in serious-delinquency territory. Referral to foreclosure becomes plausible, and in Georgia the gap between referral and sale is short. This is also where the 24-month limit starts to bite.

That limit deserves emphasis. Because you are generally allowed one permanent home-retention option every 24 months, the option you accept is the option you are stuck with for two years. A repayment plan that stretches your budget past what you can actually sustain is not a neutral first step — if it fails, you may not be eligible for a second permanent workout for two years. If your situation calls for a partial claim or a combination modification plus partial claim, say so and ask why a lesser option is being offered. Take the option that fits your actual income, not the first one presented.

What Is No Longer Available in Georgia

Georgia's state-level backstop is gone. The [Georgia Mortgage Assistance program](https://dca.georgia.gov/press-releases/2025-12-30/georgia-mortgage-assistance-program-announces-final-application-deadline) — the state's $354 million Homeowner Assistance Fund effort, administered by the Department of Community Affairs with grants up to $50,000 — stopped accepting new applications after March 31, 2026. Over its run it helped nearly 12,000 Georgia households and prevented more than 1,600 foreclosures.

It closed precisely as FHA distress reached a five-year high. If you have seen the program referenced in older guides, do not spend time applying. The two resources that still exist:

  • FHA Resource Center: (800) CALL-FHA / 1-800-225-5342, 8 a.m. to 8 p.m. Eastern, weekdays.

  • Free HUD-approved housing counseling: answers.hud.gov/housingcounseling. This is free, and a counselor can tell you which waterfall option you plausibly qualify for before you commit to one.

Reading Your Own Risk Versus the Headline

An 11.79% portfolio delinquency rate is not an 11.79% chance that any given FHA borrower loses their home. That number bundles together loans 30 days late that will cure next month, borrowers performing on trial payment plans who are effectively already in a workout, and loans in genuine late-stage distress.

Your individual risk turns on three things the aggregate does not show: what stage you are in (30 days late is a different situation from 90-plus), whether you have equity — a borrower with equity has options a borrower underwater does not, including selling — and whether a workout is actually in progress and documented. If you are on a TPP and making payments, you are inside the 11.79% but you are not in the part of it that ends in a foreclosure sale.

If you want to check FHA's portfolio numbers independently of MBA's survey, HUD publishes its own Single-Family Loan Performance Trends Report monthly.

This Is Not 2008 — but the Timeline Is Compressing

Worth stating plainly, because the FHA number invites the comparison. Foreclosure inventory is 0.67% of loans. There were 227,548 U.S. properties with foreclosure filings in the first half of 2026, up 21% year over year; Q1 filings were up 26%. These are increases off historically low levels, and there is no negative-equity wave behind them of the kind that drove 2008.

You may also encounter a "32% above a year ago" figure. That number belongs to January 2026 alone — 40,534 properties — not to the quarter or the year. The quarterly figure is 26%; the half-year figure is 21%.

The one metric moving in a genuinely different direction is speed. Foreclosures completed in Q2 2026 averaged 563 days, the shortest since 2013 and down 13% year over year. The volume is modest; the process is faster than it has been in over a decade. In a non-judicial state with a 30-day statutory notice and no post-sale redemption, that compression is what turns a manageable delinquency into a lost house.

The systemic risk here is low. The borrower-level stakes, particularly in Macon, Atlanta, Augusta and Columbus, are not. If you are behind on an FHA loan in Georgia, the useful response to an 11.79% headline is a phone call — to your servicer, and to a HUD-approved counselor — not a wait-and-see.

Sources

This article contains AI-assisted content and has been reviewed in our publication workflow. It is general information, not financial or legal advice. If you are behind on your mortgage, contact your servicer and a HUD-approved housing counselor.

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Mortgage in Georgia is an editorial site. Verify current rate quotes, underwriting standards, and program eligibility directly with lenders and official program sources before acting on this article.

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