Disaster Help for Homeowners in
Presidentially Declared Disasters

Has your home been damaged, or your ability to make your mortgage payments been affected, by a hurricane, flood, tornado or other event that the President declared a disaster? Contact your lender immediately to request assistance because if you were physically or financially impacted by the disaster, and are in default or foreclosure, your lender may:

1.      Stop or delay initiation of foreclosure for 90 days.

2.      Ignore late fees if you become delinquent on your loan.

Just follow the four steps below to see if you are eligible for relief.

Step one - Answer four basic questions

• 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

You qualify for a 90-day foreclosure moratorium (freeze) if you are in one of three basic groups:

• You or your family live within the geographic boundaries of a Presidentially-declared disaster area,
• Someone in your household is deceased, missing or injured directly due to the disaster, or 
• Your financial ability to pay your mortgage debt was directly or significantly affected by a disaster.

How can FHA disaster relief help me?

FHA-approved lenders are required to use reasonable judgment in deciding who is an "affected borrower." They must reevaluate and identify the cause of default for each delinquent (failing) loan until reinstatement or foreclosure. Contact your lender about your situation.

Some of the actions that your lender may or may not take:

• 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, your lender has 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

FHA-approved lenders will automatically stop all foreclosure actions against families with delinquent loans on homes within the boundaries of a Presidentially-declared disaster area. However, first you must let your lender know that you are an affected borrower. When weighing your options, remember:

·         A foreclosure moratorium applies only to borrowers who are delinquent (fail to make timely payments) on their FHA-insured loan.

·         If you are current on your loan payments, you should continue to make them each month.

·         If you foresee ongoing problems in making your mortgage payments resulting from changes in your financial status, let your lender know.

·         If your inability to pay resulted from the disaster, your lender may put aside any late fees normally charged and let you know about any other payment options.

You may be asked to provide financial information, medical records or death certificates on individuals who were injured or died in the disaster, and records related to disability or other insurance coverage that may be available to assist you in making your payments.

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

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 contact a HUD-approved counseling agency toll-free at (800) 569-4287, HUD's National Servicing Center toll-free at (888) 297-8685, or send an email to hsg-lossmit@hud.gov.

Disaster Financing for Homeowners

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 to the extent that it needs to be rebuilt or replaced, contact a lender and ask about FHA's mortgages for disaster victims. The Federal Emergency Management Agency (FEMA) provides listings of the specific affected counties and cities and corresponding declaration dates.

Disaster victims may be eligible for 100% financing of the sales price of a home with no downpayment and the following qualifiers:

• 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
• Loan applications must be submitted to the lender within one year of the President's declaration of the disaster.

Borrowers may also be eligible to use FHA's rehabilitation mortgage program, so contact a lender today.