Disaster Help for Homeowners in
Presidentially Declared Disasters
Has your home been damaged or your ability to make your mortgage payments affected by a hurricane, flood, tornado or other event that the President declared a disaster? If so, you may qualify for relief to help you keep your home. When a disaster affects the lives and livelihood of borrowers, FHA and the mortgage industry are standing ready to assist you.
If you were physically or financially impacted by the disasters and are in default or foreclosure, contact your lender immediately to request assistance. Your lender may be able to help. If you are at risk of losing your home, your lender may stop or delay initiation of foreclosure for 90 days.
Lenders may also ignore late fees if you become delinquent on your loan. Just follow the four steps below to see if help is available to you. We strongly encourage you to contact your lender as soon as possible to see if you are eligible for relief.
Step one - Answer four basic questions - (Top)
- Did my expenses rise or income fall?
- Were these changes in my finances caused directly or largely by the disaster?
- Have I missed any mortgage payments?
- Am I without other resources, such as insurance settlements, to catch up?
If you answered "yes" to all of these questions, and you have a conventional or VA mortgage, contact your lender. If you have an FHA-insured mortgage, please continue reading.
Step two - See if and how you can participate in FHA disaster relief - (Top)
You must be in one of three basic groups in order to qualify for a moratorium (freeze) on foreclosure:
- If you or your family live within the geographic boundaries of a Presidentially-declared disaster area, you are automatically covered by a 90-day foreclosure moratorium.
- If someone in your household is deceased, missing or injured directly due to the disaster, you qualify for a moratorium.
- If your financial ability to pay your mortgage debt was directly or significantly affected by a disaster, you qualify for a moratorium.
How can FHA disaster relief help me?
HUD has instructed FHA lenders to use reasonable judgment in deciding who is an "affected borrower." Lenders are required to reevaluate each delinquent (failing) loan until reinstatement or foreclosure and to identify the cause of default. Contact your lender about your situation. Some of the actions that your lender may take or not take are:
- Your lender will not take action to foreclose during a moratorium.
- Your lender will evaluate you for assistance to help you retain your home.
- Your lender may enter into a special forbearance plan, or execute a loan modification or a partial claim, if these actions are likely to help reinstate your loan.
- If saving your home is not feasible, lenders have some flexibility in using the pre-foreclosure sales program or may offer to accept a deed-in-lieu of foreclosure.
If you don't know what these special plans or actions are - please read "Avoid Foreclosure"
Step three - Take action to qualify for foreclosure relief - (Top)
FHA lenders will automatically stop all foreclosure actions against families with delinquent loans on homes within the boundaries of a presidentially declared disaster area.
A foreclosure moratorium applies only to borrowers who are delinquent (fail to make timely payments) on their FHA loan. If you are current on your loan payments, then you should continue to make them.
If your inability to pay your loan resulted from the disaster, your lender may put aside any late fees normally charged and let you know about other options. Also, if you foresee ongoing problems in making your mortgage payments resulting from changes in your financial status, you should contact your lender immediately.
When contacting your lender for further instructions, please be prepared to provide information about disability or other insurance that may be available to assist you in making your payments.
Borrowers that were injured or whose income relied on individuals that were injured or died in the disaster will be asked for documentation such as medical records or death certificates. Your lender will ask you for financial information to help evaluate what assistance can be provided to you to reinstate your loan.
You must let your lender know that you are an affected borrower. Your lender may request supporting records and use them to determine if you meet the relief criteria. Once you are identified as an affected borrower, foreclosure action may be stopped for the duration of the moratorium period.
Step four - If your lender is unable to assist you - (Top)
HUD is confident that your mortgage lender will make every attempt possible to assist you. If you are not satisfied after discussing possible relief actions with your lender, please call a HUD-approved counseling agency toll-free at (800) 569-4287 or call HUD's National Servicing Center toll-free at (888) 297-8685 or via email at hsg-lossmit@hud.gov.
Disaster Financing for Homeowners - (Top)
If you live in an area declared a disaster by the President and your residence (whether you own it or rent it) was destroyed or damaged so much that it needs to be rebuilt or replaced, contact a lender and ask about FHA's mortgages for disaster victims. Disaster victims may be eligible for 100% financing for the purchase of a home. The Federal Emergency Management Agency (FEMA) provides listings of the specific affected counties and cities and corresponding declaration dates at www.fema.gov/disasters.
Disaster victims may be eligible for 100% financing of the sales price with no down payment required with some limitations:
- Closing costs and prepaid expenses not paid by the seller must be paid by the borrower in cash or paid through premium (costly) pricing
- The program is limited to one-unit detached homes or units in an approved condominium project, and
- Your loan application must be submitted to the lender within one year of the President's declaration of the disaster.
You may also be eligible to use FHA's rehabilitation mortgage program, so contact a lender today.
