FHA Mortgage Options For Disaster Victims

We are into hurricane Season, and we have already seen major damage caused by hurricane Joaquin and Patricia this year.  These hurricanes created major damage, and left many families homeless.  Nothing can make up for the losses homeowners suffered from these hurricanes, but there is help available for these homeowners to replace their homes.   One of the options homeowners who have lost their home as a result of a major natural disaster have is the FHA Mortgage Options For Disaster Victims.

We should always be prepared for major weather events like hurricanes, blizzards, and tornadoes.  But no matter how well we prepare,  hurricanes like Joaquin and Patricia can cause damage beyond our ability to prepare for.  When such disaster occurs homeowners require assistance with the damage left behind.  In many cases the damage cased by hurricanes Joaquin and Patricia to homes was beyond repair, and homes were completely destroyed.  FHA has a mortgage program specifically designed to assist homeowner who have lost their home as a result of a natural disaster.   Section 203(h) of the FHA Guidelines addresses "Disaster Victims".  Section 203(h) states if a Homeowner loses their home because of a natural disaster, and the President has declared the area they live in a disaster area, the homeowner can apply for a new mortgage under the Section 203(h) Mortgage Program for Disaster Victims.

Under Section 203(h) the Borrower's previous home must have been destroyed or damage to such an extent rebuilding or purchasing a new home is necessary.  Section 203(h) not only applies to Homeowners, but also to renters who were impacted by the lost of the property.

In order to apply for a new Mortgage under Section 203(h) a Homeowner or Renter must provide the following proof:

• Proof of residency:
• Valid drivers license
• voter registration card, or
• Utility bill
• Proof of destruction:
• Insurance Report
• Inspection Report by an independent Inspector or Government Agency, or
• Photograph as evidence the property was destroyed or damaged to the point it does not make sense to rebuild it.

Mortgages under Section 203(h) are only available for the following properties:

• One Unit Detached Properties
• Approved Condominium Projects

NOTE:  Multi-Family properties are not eligible.

Mortgages under Section 203(h) are:

• Eligible for 100% financing, so there is no down payment required.
• Lenders can exclude the present mortgage payment from the Borrower's Debt-To-Income Ratios if the Borrower can show:
• The property was insured by a sufficient amount to pay off the remaining mortgage balance of the damaged home.
• The Borrower is working with the Lender servicing the property to address the Borrower's mortgage obligation.

No Homeowner wants to lose their home.  But should a homeowner lose their home because of a natural disaster, it is good to know  FHA has an FHA Mortgage Options For Disaster Victims which can assist them, and  make it easier for them to obtain a new mortgage to replace the home they lost.