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FHA Loans For Homes Damaged In Natural Disasters

August 14, 2023

FHA mortgage

Was your home damaged or destroyed by flooding, mudslides, or coastal erosion? Was it in the path of a wildfire? In 2023, more American homeowners have been affected by these issues, and many find themselves wondering what to do in the wake of the damage.

If you have an FHA home loan and your property is damaged or destroyed by a natural disaster, you need to remember some important issues when you begin to plan to repair or replace your home.

Stay In Touch With Your Lender

Contact your participating FHA lender immediately. Do not delay when you need to discuss FHA options for loan forbearance, modification, or other alternatives.

Don’t Rush Into An Insurance Settlement

Is an agent trying to get you to hurry up and sign a settlement agreement? Don’t give in to pressure to act quickly. Make informed choices and know your rights.

Two Tiers Of Disaster Recovery

A natural disaster area not on the federally declared list may not have the same level of relief offered by federal agencies. You’ll need to know where you stand in this area as it will be a factor in some of the benefits you could claim in the wake of the disaster.

Regions declared as federal disaster areas include FHA options which include a 90-day moratorium on all foreclosures for FHA loans in the disaster area, plus access to s well as rehab loan options such as the FHA 203(h) rehab loan program.

That option, specifically for those in a federal disaster area, offers FHA purchase and refinance options to renovate or replace damaged homes in federally declared disaster sites.

As mentioned above, don’t neglect the lender in the early days of recovering from the incident. It is never safe to assume you don’t have to make mortgage payments even if your home is uninhabitable. 

Help Your Lender Help You

You always need the lender’s cooperation to change the repayment schedule on your home loan. If you struggle financially after a natural disaster, work with your loan servicer to arrange a modified payment schedule or other options.

Don’t lose your property because of a simple lack of communication.

If you are unsure whether your zip code is included on the list of federal disaster areas, the Federal Emergency Management Agency (FEMA) official site can help.

Joe Wallace - Staff Writer

By Joe Wallace

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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