December 2, 2021

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Your FHA Mortgage And Natural Disasters In 2021

HUD Disaster Resources

In the early days of the month of September, the FHA and HUD have made a number of announcements regarding disaster relief for portions of the country that have experienced fires, floods, and hurricanes.

The agencies have, from the start of September to September 10, 2021, issued no fewer than seven announcements related to disaster relief. The first of those, dated September 1, 2021, includes the following related to disaster relief measures for those who are in presidentially declared federal disaster areas:

  • Foreclosure relief – There is an automatic 90-day moratorium on foreclosures of Federal Housing Administration (FHA)-insured home mortgages beginning on  the date of the major disaster declaration; Call the FHA Resource Center at 1-800-304-9320 for assistance
  • FHA Rehab Loans — FHA Section 203(h) Rehabilitation Loans for disaster victims offers FHA loans to those in federally declared disaster ares who had homes “destroyed or damaged to such an extent that reconstruction or replacement is necessary and are facing the daunting task of rebuilding or buying another home”
  • Other FHA Rehab Loan Options -The FHA Section 203(k) Rehabilitation Loan program, “…enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home.”

These options are offered to anyone in a Presidentially-declared federal disaster area, but no matter where you live, if you have had damage to your home by a natural disaster it is crucial to contact your loan servicer immediately to learn what options you have. 

You should do this BEFORE missing any payments or being late on a mortgage payment.

The faster you reach out to the lender, the better off you will be as your options are the most flexible if you start making arrangements before missing a payment.

It is never too early to begging making arrangements to save your mortgage and prevent your loan from going into default and foreclosure. 

Remember, foreclosure moratorium rules are not intended to run indefinitely–a suspension on foreclosure actions on homes purchased with an FHA mortgage in a federal disaster area is a temporary measure meant to give you time to make the arrangements.

Even if your home has been destroyed or is uninhabitable after the emergency, do not stop making payments or fail to make arrangements to adjust your mortgage accordingly to recover from the damage.

If you need assistance with your mortgage loan after a disaster, contact the FHA as soon as possible and do not forget to view the official site of the Federal Emergency Management Agency (FEMA) because you may have additional options as a home owner in a disaster area to borrow money to repair or replace the home.

Bruce Reichstein - FHA News Author

By Bruce Reichstein

September 10, 2021

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

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