Disaster Relief Options Available to Homeowners

FHA home loans are popular, and FHA 203h home loans have become even more popular due to the recent natural disasters that have destroyed homes and families in parts of Texas and Louisiana. FHA 203h loan is the only FHA loan program offered to flood victims to have a place they can call theirs again.

Like other FHA-insured loan, homeowners can get the 203h through FHA-approved lending institutions. Designed to help people that lost their homes during a natural disaster, the 203h loans come with certain features that distinguish them from other mortgages.

If you or your loved ones were affected by the recent Hurricane Harvey, it is advisable that you continue reading the article for more information about the loan program.How can you get relief from 203h home loans?

Based on the instruction of The United States Department of Housing and Urban Development, FHA-approved lenders are to use their discretion to determine the eligibility of a catastrophe victim. It is part of the requirement of the lending institution to re-evaluate all delinquent loans and determine the cause of default. If you are unfortunate to have been affected by Hurricane Harvey, it is advised that you contact your lending institution to learn more about how you can enjoy the benefits of 203h loans for disaster victims.

Some of the actions your lending institution will take are briefly highlighted below.
  1. The first thing is to determine if your loan qualifies for FHA Section 203(h) program. Since you were affected by a catastrophe, if your current property is located in a Presidentially-declared disaster area and if it is damaged to the extent that reconstruction or replacement is necessary.
  2. The lending institution evaluates your credit standing. They might overlook current delinquencies if your credit was up to par before the catastrophe.
    Questions to answer before applying
  3. Was your home damaged as a result of the disaster?
  4. Are there any other resources like insurance settlements available to you?

If the answer to both questions is yes, and you have defaulted on your mortgage payments, then you need a foreclosure moratorium. However, if the answer is yes but there is the likelihood of missing future payments, your lending institution will usually assist you by waiving late payment fees.

Eligibility for a Foreclosure Moratorium

As mentioned earlier, you will need a foreclosure moratorium if you have been affected by a natural disaster and have defaulted on your mortgage payments. However, to be eligible for this moratorium check if you fall into at least one of the three categories of people mentioned below.

  • You or your family live within the boundaries of a disaster area based on the declaration of the President. This automatically qualifies you for a 90-day foreclosure moratorium.
  • You are a member of the household of a deceased person or someone who is missing or injured directly because of the natural disaster.
  • You have been financially incapacitated due to the natural disaster and consequently unable to pay your mortgage debt.

If you are eligible for a moratorium based on the requirements mentioned above, the next step is to proceed by taking action to qualify for the moratorium.

Qualifying for foreclosure relief

Only borrowers who are delinquent on their FHA loan can apply for a foreclosure moratorium. Therefore, if you have been consistent with your payment, it is advised that you continue to do so. FHA-approved lending institution will usually stop foreclosure actions against disaster-affected families that have delinquent loans as far as they fall within the Presidentially-declared disaster area.

It is also advised that you notify your lending institution to ensure that they are aware of your circumstance. Lenders usually request for some documentation to ensure you meet the set requirements.

There have been rare cases where the lending institution was unable to provide a satisfactory assistance to disaster-affected homeowners for one reason or the other. In such situations, it is advised that you contact a HUD-approved counseling agency.

Houston rehab loans or hurricane rehab loan in the recent case of Hurricane Harvey is available to disaster victims. Another loan program that victims of the storm can benefit from is 203k loans.