September 3, 2019
Do you know what your FHA loan options are for recovering from natural disasters in federally-declared disaster areas? FHA home loan options include loan forbearance, FHA Rehab loans to replace or repair a damaged home, refinance options, and much more.
The FHA, HUD, and FEMA all urge those who are affected to contact their loan officers immediately. It is never safe to assume any offered relief measures are automatic; you must usually make arrangements to get assistance, disaster relief, etc.
Those who had properties secured by conventional mortgages at the time of the disaster may still be able to get help by applying for an FHA Rehab loan (mentioned above) that is specifically meant for those in federal disaster areas.
FHA 203(h) loans (specifcially for disasters) can be used in conjunction with the standards FHA 203(k) rehab loan program and others.
The catch here is that FHA 203(h) disaster loans or disaster refinance loans must be given case numbers “within one year of the date” the federal disaster area is declared, unless an additional period of eligibility is approved by the FHA/HUD.
FHA Single-Family disaster loans (the 203(h) Rehab loan program) are for owner/occupiers and cannot be used for
FHA loan rules state, “The maximum Loan-to-Value (LTV) ratio limit is 100 percent of the Adjusted Value. If a 203(k) is used in conjunction with a 203(h), the 203(k) LTV applies”.
Speak to your loan officer as soon as possible about your recovery options if you are affected by a natural disaster, and do not forget to ask about how to use FHA loans in conjunction with other relief measures that may be offered.
The FHA Loan Moratorium
FHA disaster policy includes special provisions for those in federally declared natural disaster areas. Those provisions include a 90-day moratorium on foreclosure activity, but it is very important to know that such assistance is only offered in the specific locations declared as federal disaster areas.
These are often declared by county, though some circumstances may dictate a different approach depending on circumstances.
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 www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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