What Is an Occupancy Check? Definition, Servicer Rules, Fees, and What Inspectors Look For

An occupancy check is a field visit to determine whether a property is occupied, vacant, or abandoned. It is the cheapest and most frequently ordered service in property preservation, and the one everything else waits on: no servicer orders an initial secure, a winterization, or a cleanout until someone has stood in front of the house and answered the question. This covers what the check is, when HUD and Fannie Mae require it, what it pays, what inspectors actually look at, how the apartment and lender versions differ, and why the report matters more than the visit. Ethreon performs occupancy checks and vacant property inspections across seven states.

The Definition, as HUD Writes It

HUD Handbook 4000.1 defines an Occupancy Inspection as a visual inspection of a mortgaged property by the mortgagee to determine if the property has become vacant or abandoned and to confirm the identity of any occupants. It pairs the term with an Occupancy Follow-Up — an attempt to reach the borrower by letter, telephone, or another method other than an on-site visit — and with the Vacant Property Inspection, which begins once vacancy is confirmed. In the field these are three distinct work orders with three fee lines; in the handbook they are one process for answering who, if anyone, is in the house.

When the Check Is Required

The two largest programs set different clocks. HUD ties the check to contact attempts: if the mortgagee cannot reach the borrower by the 45th day of delinquency it must perform a visual inspection, and the initial Occupancy Inspection is due no later than the 60th day when the loan is in default, no payment has arrived within 45 days of the due date, and outreach has failed. If the first visit does not settle the question, follow-ups and further inspections continue every 25–35 days until it does. During a bankruptcy the mortgagee contacts the trustee or borrower's attorney first and continues exterior-only inspections until the default is cured, the property is disposed of, or the court permits contact.

Fannie Mae starts later and runs on the calendar. Servicing Guide D2-2-10 requires the servicer to order a property inspection on or after the 90th day of delinquency, complete it by the 120th day, and continue inspecting every calendar month while the loan remains 90 or more days delinquent, until the foreclosure sale — unless quality right-party contact is established, a full payment arrives, a workout is approved, or the borrower is performing under a bankruptcy plan. Occupied or unknown properties get an exterior inspection; vacant or abandoned properties get an interior inspection where the law allows, and once abandonment is confirmed, an interior inspection every calendar month.

What Happens When the Answer Is 'Vacant'

Under HUD, a vacancy determination obliges the mortgagee to send the borrower a letter by certified mail or another delivery-confirmed method, to begin Vacant Property Inspections, and to take preservation and protection actions to secure and maintain the property. The First-Time Vacant inspection follows on the date the mortgagee takes possession: secure the property if possible, pressure-test the water supply and upload the photographs, address imminent safety hazards, and photograph the primary exterior facades and interior areas of every structure. Vacant Property Inspections then run every 25–35 days. The handbook is explicit about why the date matters: the mortgagee is liable for damage resulting from a failure to preserve and protect the property unless it can prove the damage occurred before the property became vacant.

That sentence is the reason the occupancy report is written the way it is. The vacancy date on the report becomes the line between damage the investor absorbs and damage the servicer eats. Our guides to the initial secure and to vacant property monitoring pick up from that date.

What the Check Pays

These are allowables — what the program reimburses the servicer — not vendor rates. HUD's inspection fees were the only lines in its schedule to move since 2019: Mortgagee Letter 2023-20 raised the occupancy inspection from $20 to $30 and the first-time vacant inspection from $35 to $45. The 2026 price list has every other allowable beside them.

What Inspectors Look For

The determination rests on exterior evidence, gathered from the street or the porch and photographed with a timestamp. A single indicator proves nothing; the report records the pattern.

• Evidence of occupancy — vehicles in the drive, a mowed lawn, window coverings and furniture visible, utility meters turning, fresh trash at the curb, pets, seasonal decorations, a response to the knock.
• Evidence of vacancy — overgrown grass, mail and flyers accumulating, bare windows, no lights after dark, utility meters pulled or locked, a real-estate lockbox, snow with no footprints or tire tracks.
• Evidence of abandonment or unauthorized entry — locks that do not match the servicer's code, a forced door or window, a new padlock nobody ordered, unfamiliar vehicles, utilities reconnected on a property the servicer shut off.
• Condition — visible damage, boarding status, code-violation risks such as debris or height of grass, anything that will need a bid.
• Neighbor contact — where the client's protocol allows it, a neighbor's account of when the occupants left, recorded as hearsay and dated.

A drive-by check is done from the street. A walk-up adds the knock, a look through accessible windows, and a posted notice with the servicer's contact information — the door tag that satisfies HUD's contact-attempt requirement when no one answers. Interior inspections come only after vacancy is established and only where state law and the client permit entry.

The Apartment Version

Property managers use the same phrase for a different task. An occupancy check on an apartment verifies who is living in a unit against the lease: whether the tenant of record is still there, whether someone not on the lease has moved in, whether a unit carried as occupied is quietly empty, or — after a notice to vacate or an eviction — whether the unit has actually been surrendered so turnover can start. The evidence is the same list as above, applied at the unit door and the mailbox bank, and the consequences are lease enforcement and turnover scheduling rather than foreclosure timelines. On HUD-assisted and other regulated housing, occupancy records also feed compliance reporting, which is why managers want the check documented, not just done.

Occupancy Verification on the Lending Side

A third use of the term sits with the lender rather than the field crew. Occupancy verification in mortgage origination and quality control confirms that a borrower who financed a home as a primary residence actually lives there — a fraud and compliance check, often done by letter, records review, or a site visit. In servicing, the phrase usually means the certified report that first documents vacancy: Fannie Mae requires a signed copy of the inspection report in which the inspector certifies they personally went to the property and that it is vacant. Either way, the inspector's job is the same — go, look, photograph, certify — and the report is the product.

Why the Report Is the Product

HUD requires the mortgagee to keep in the servicing file the dates and methods of every Occupancy Follow-Up and vacancy letter, evidence of payment to the inspector, copies of all completed inspection reports, and any follow-up documentation. Fannie Mae requires the signed vacancy certification. An inspector who stood in front of the house but left a thin report has not completed the assignment: the visit establishes the fact, the report establishes the date, and the date decides who pays for whatever happens next. Our photo requirements guide covers the vantage points and file structure that make the report defensible.