Hurricane Sandy has been dominating the headlines; it’s a good time to review FHA loan policy for those who might be affected by a natural disaster such as a hurricane, flood or other weather-related issue.
Much of the FHA loan policies are directed towards those who have had properties damaged by a disaster, but some borrowers have employment issues after a weather-related incident and may have difficulties making their next FHA loan payment. FHA loan rules do address that situation as well as cases where the borrower is trying to recover from storm damage or other problems.
From the FHA official site:
“Was your home or your ability to make your mortgage payments harmed by an event that the President declared a disaster? You may qualify for relief to help you keep your home. Much of the mortgage industry and The United States Department of Housing and Urban Development is committed to assisting borrowers whose lives and livelihoods are thrown into turmoil by a disaster.”
The FHA official site says your lender may be willing to “stop or delay” foreclosure proceedings for up to 90 days after a natural disaster. The FHA adds, “Lenders may also waive late fees for borrowers who may become delinquent on their loans. Just follow the four steps below to see if help may be available to you. You are strongly encouraged to contact your lender for further information, and to see if you are eligible for relief.”
To see if you qualify for such assistance, the FHA official site says you should ask four basic questions:
- Did my expenses rise or income fall?
- Were these changes in my finances caused directly or substantially by the disaster?
- Have I missed any mortgage payments?
- Am I without other resources, such as insurance settlements, to catch up?
According to the FHA, “If you answered “yes” to all of these questions, and you have a conventional or VA mortgage, contact your lender. If you have an FHA-insured mortgage, please continue reading.”
The next step is to determine if you are one of the affected borrowers the FHA official site says it can help. “You must be in one of three basic groups in order to qualify for a moratorium on foreclosure:”
- You or your family live within the geographic boundaries of a Presidentially declared disaster area, you are automatically covered by a 90-day foreclosure moratorium.
- You are a household member of someone who is deceased, missing or injured directly due to the disaster, you qualify for a moratorium.
- Your financial ability to pay your mortgage debt was directly or substantially affected by a disaster, you qualify for a moratorium.
The FHA rules add that borrowers who may be having trouble making their FHA mortgage payments in the wake of a natural disaster should heed the following; “if your inability to pay your loan resulted from the disaster, your lender may waive any late fees normally charged and let you know about other options. Also, if you foresee ongoing problems in making your mortgage payments resulting from changes in your financial status, you should contact your lender immediately.”
Do you have additional questions about these policies? Ask the FHA by calling 1-800 CALL FHA.