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Outside of the Waterfall Loan Modification

FHA Single Family Housing Policy Handbook Glossary November 26 2025

Updated 08-20-2026

Outside of the Waterfall Loan Modification

An Outside of the Waterfall Loan Modification (OWL) refers to a permanent change in one or more terms of a Borrower’s Mortgage that achieves a minimum reduction to the Borrower’s monthly Principal & Interest (P&I) payment where the Borrower has been unresponsive.

FHA Single Family Housing Policy Handbook Glossary November 26 2025

p. 41

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