Mortgage delinquencies are increasing across all three major loan types – conventional, FHA and VA. This was the case in the last three months of 2025, with FHA loans experiencing the sharpest rise.
FHA loans reached a delinquency rate of 11.52%, the highest level since the second quarter of 2021, according to the Mortgage Bankers Association's national delinquency survey.
"While earlier-stage FHA delinquencies remained relatively flat compared to the previous quarter, later-stage, 90+ day delinquencies increased by 76 basis points. The FHA foreclosure inventory rate also grew to the highest level since the first quarter of 2020," said Marina Walsh, and MBA's CMB and VP of Industry Analysis.
Walsh added that fourth-quarter results may have been impacted by the expiration of pandemic-era FHA relief options as well as disparities in the labor market, a key determinant of mortgage delinquency levels.
Serious delinquencies, including loans 90+ days past due or in foreclosure, vary by year of origination. For FHA loans, vintage years 2020 and 2021 are performing better than 2022 and 2023, when mortgage rates rose and affordability was especially stretched, the report said.
With FHA volume increasing, mortgage rates moderating, and borrower credit characteristics improving on newer FHA originations, the performance of recent cohorts may help temper stress on overall FHA portfolios.
Quarter-over-quarter, the seasonally adjusted delinquency rate increased across all loans. By stage, the 30-day delinquency rate decreased five bps to 2.07%, while 60-day and 90-day delinquencies each rose 16 bps to 0.92% and 1.27%, respectively. Conventional loan delinquencies increased 27 bps to 2.89%, FHA loans rose 74 bps to 11.52%, and VA loans increased 10 bps to 4.6%.
On a year-over-year basis, total mortgage delinquencies also increased, with conventional loans up 27 bps, FHA loans up 49 bps and VA loans down 10 bps. The non-seasonally adjusted seriously delinquent rate rose 24 bps from last quarter to 1.85%, and was up 17 bps from a year ago. Serious delinquency increases were led by FHA loans, up 106 bps quarter-over-quarter and 104 bps year-over-year, while conventional and VA loans remained largely stable.
At the state level, the largest quarterly delinquency rate increases occurred in Mississippi (109 bps), Louisiana (89 bps), Maryland (87 bps), Oklahoma (86 bps) and Indiana (86 bps).
Overall, the delinquency rate on 1–4 unit residential mortgages rose to 4.26% in the fourth quarter, up 28 bps year-over-year, though the share of loans entering foreclosure remained steady at 0.20%.
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