September 20, 2018

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HUD Announces Disaster Relief For Virgin Islands, Georgia

HUD announces disaster relief

The Department of Housing and Urban Development (HUD) has announced disaster relief for parts of Georgia and the U.S. Virgin Islands. As more parts of the United States and its’ protectorates are affected by hurricanes and tropical storms, many of those areas are being declared federal disaster areas and as such become eligible for certain aid from HUD, FEMA, and other agencies.

The disaster declaration for St. Thomas and St. John islands, plus Camden, Chatham, and Glynn counties in Georgia mean that the FHA “activates a mortgagee letter making a variety of insured loan programs available for disaster victims and putting into play use of special loan servicing and underwriting requirements” according to the FHA/HUD official site.

What options are available in these areas? According to HUD, those directly affected by a natural disaster who have existing home loans can work with a participating FHA lender to determine what is possible.

“HUD has instructed FHA lenders to use reasonable judgment in determining who is an ‘affected borrower.’ Lenders are required to reevaluate each delinquent loan until reinstatement or foreclosure and to identify the cause of default. Contact your lender to let them know about your situation.”

What can a participating lender do for those with existing FHA loans affected by the disaster? For starters, the FHA and HUD require a moratorium period of 90 days on loans that were in danger of being foreclosed upon prior to the disaster. Other options, according to the FHA official site, are as follows:

-Your lender will evaluate you for any available loss mitigation assistance to help you retain your home.

-Your lender may enter into a forbearance plan, or execute a loan modification or a partial claim, if these actions will help retain and pay for your home.

-If saving your home is not feasible, lenders have some flexibility in using the pre-foreclosure sales program or may offer to accept a deed-in-lieu of foreclosure.

Borrowers or home owners who need to repair, renovate, or replace homes damaged in a natural disaster will, upon having the area where the home is located declared a federal disaster area, have the option to apply for an FHA 203(h) loan for disaster victims. From HUD:

“Individuals are eligible for this program if their homes are located in an area that was designated by the President as a disaster area and if their homes were destroyed or damaged to such an extent that reconstruction or replacement is necessary. Insured mortgages may be used to finance the purchase or reconstruction of a one-family home that will be the principal residence of the homeowner. Like the basic FHA mortgage insurance program it resembles (Section 203(b) Mortgage Insurance for One to Four Family Homes), Section 203(h) offers features that make recovery from a disaster easier for homeowners”.

FHA 203(h) loans have no down payment requirement and are financed at 100%. Speak to a participating FHA lender to learn more about this option if you are in one of the affected areas.

Joe Wallace - Staff Writer

By Joe Wallace

September 19, 2017

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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