Is Your Home in a Federal Disaster Area?

June 5, 2024

If you have an FHA mortgage, FHA refinance loan, or any other FHA loan product on a home that has been affected by a natural disaster in a federal disaster area, there are important options for you to know about.

You should know more about the options below when trying to settle insurance claims, decide what to do with the property, and how to proceed with your monthly mortgage payments.

FHA Borrowers Have Options Following a Natural Disaster

The FHA and HUD announce specific types of disaster relief for those in federally declared disaster zones, such as the ones announced in the wake of severe storms in April 2024 across parts of Nebraska and Maine, among other areas.

When such declarations are made, FHA borrowers have specific options, including but not limited to:
 

• FHA Foreclosure Moratorium
  The FHA asks its participating lenders to offer a 90-day moratorium on foreclosures on FHA loans and reverse mortgages. This moratorium also applies to loans made under the agency’s Section 184 Indian Home Loan Guarantee program. Help from the FHA Resource Center: Call 1-800-304-9320 to learn your disaster relief options. You should also visit the FHA Disaster Relief official site.
• Homeowner Recovery Options
  The 203(h) rehab loan program “provides FHA insurance to disaster victims. Borrowers from participating FHA-approved lenders are eligible for 100 percent financing including closing costs,” according to HUD.gov. These loans are specifically for borrowers with homes damaged or destroyed in federally declared disaster areas. Another FHA rehab loan program, the FHA 203(k) loan, is for borrowers who want to rehab a home, whether affected by a natural disaster or not.
• HUD-Approved Housing Counseling
  There are a variety of HUD-approved housing counseling options for those in federally declared disaster zones. Call (800) 569-4287 to learn more. HUD.gov reminds us, “There is never a fee for foreclosure prevention counseling.”
• Anti-Housing Discrimination Measures for Disaster Victims
  The HUD Office of Fair Housing and Equal Opportunity can help if you have experienced housing discrimination whether related to a disaster or not. 

You can file a complaint by calling HUD at 1-800-669-9777 or by following the instructions at the HUD official site, How to File a Housing Discrimination Complaint. 

What not to Do After a Disaster

Do not make decisions about your home or your home loan without discussing your circumstances with the lender. Do not allow yourself to be rushed into insurance settlements or any other type of official proceeding without carefully examining all your options. Don’t stop paying your mortgage without discussing your financial needs with a loan officer and don’t stop paying your mortgage loan without having discussed a loan modification or related choices with the bank.

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