Disaster Resources for FHA Borrowers
The Department of Housing and Urban Development publishes guidelines for lenders and borrowers who are affected; much FHA loan relief related to disasters is offered to those in federally-declared disaster areas.
But even if you aren’t in a region with such a federal declaration, you should contact your loan officer right away in the aftermath of a disaster. You may have foreclosure relief and disaster recovery options, but you’ll need to coordinate with your lender. Disaster relief is not automatic and requires you to work with your financial institution.
What do the FHA and HUD offer to FHA borrowers in a federally declared natural disaster area?
Mortgage Insurance for Disaster Victims
The FHA 203(h) program is for disaster victims who have experienced damage to their homes and must either buy a new home or repair the existing property. This option is offered via FHA-approved lenders and can be approved for up to 100 percent financing, including closing costs.
Rehabilitation Mortgage Insurance
The FHA 203(k) Rehab Loan program is for any qualified borrower including those who have experienced a natural disaster. This rehab loan can finance or refinance a house and its repairs.
Disaster Relief Options For FHA Mortgages
In federal disaster areas, the FHA and HUD commonly require a limited-time moratorium on foreclosures for FHA loans. The time of the moratorium should be spent working with the lender to get the mortgage back on track with on-time payments or arrangements for payments to start at a later date while the disaster recovery process continues.
HUD Housing Counseling Options
If you live in a federal disaster area, you can be put in touch with a HUD-approved housing counseling agency. Call 1-800-569-4287 to get a referral and know that it is NOT required for you to have an FHA mortgage to use this option.
It is crucial to explore your options post-disaster as soon as possible. You should call your lender and HUD, but you should also explore the FEMA official site for any other disaster relief options that may be open to you. There are multiple government agencies that respond to a federal disaster declaration and you may qualify for other assistance from one or several of them.
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