American homeowners have been hard hit by natural disasters in 2021; everything from forest fires to hurricanes and tropical storms have beset homeowners on both coasts and in many places in-between.
Add to that the complications of the COVID-19 pandemic and you get a lot of financial hardship for those who have had to evacuate, and for those who have experienced lost or damaged homes and property.
The FHA and HUD have specific disaster-relief policies for those affected by natural disasters; if you have been affected by a storm, fire, or any other type of natural disaster it’s vital to contact your participating lender immediately to discuss your home loan options during the recovery phase.
FHA loan rules for those affected by natural disasters may include limited foreclosure moratorium procedures for borrowers, and there is help in the form of FHA rehabilitation loans specifically for disaster victims.
Some of this relief is depending on a federal disaster area declaration, other help may be possible from your lender without such a declaration.
And the relief is not automatic. It must be applied for, and homeowners are required to reach out to their lenders as soon as possible after a storm or other disaster that has affected the home or your ability to pay your mortgage.
You will need to make payment arrangements with the lender and investigate your options for an FHA rehabilitation loan where appropriate to address the damage to your property.
Insurance is also a concern; it is crucial not to be rushed into a settlement by your insurance company–take your time, work with your lender, and make the most informed decisions you can about settlements and related issues.
What FHA resources can you use to get started with home loan relief after a natural disaster? Here is some good advice:
- Contact your lender IMMEDIATELY after a disaster to make payment arrangements and seek relief;
- Go to the FEMA official site to see if your area has been declared a federal disaster area;
- Once your area has been placed under such a declaration, contact your lender about FHA mortgage relief if you don’t already have arrangements made or if you want to alter your arrangements based on newly-available FHA foreclosure relief measures;
- FEMA and the Small Business Administration can help home owners in natural disasters. SBA help may be available even if you are not a small business owner depending on the circumstances and the nature of the disaster;
- Some mortgage relief is available to borrowers who have never missed a payment or haven’t missed a payment within a certain time frame. Other types of relief are only offered to those who are delinquent. The earlier you act, the more flexible your foreclosure avoidance options are.
- Try to avoid missing your mortgage payments if you can. Otherwise, ask your lender about foreclosure avoidance steps.