November 9, 2017
The Department of Housing and Urban Development has announced disaster relief for victims of California wildfires, following a presidential declaration of federal disaster areas in the state.
According to a press release published on the HUD/FHA official site, “HUD will speed federal disaster assistance to the State of California and provide support to homeowners and low-income renters forced from their homes due to wildfires” in the counties affected by the major disaster declaration. Those counties include:
- Butte
- Lake
- Mendocino
- Napa
- Nevada
- Orange
- Sonoma
- Yuba
Those in federally declared disaster areas are eligible for a variety of measures from the FHA and HUD including FHA loan foreclosure relief in the form of a 90-day moratorium for all FHA mortgage foreclosure actions in the affected areas. Home owners may also be eligible for FHA 203(h) rehab loans for disaster victims.
The FHA 203(h) rehab loan is a zero-down payment mortgage loan intended to repair, rebuild, or replace a home damaged or destroyed by a natural disaster in a a federally declared disaster area.
FHA 203(h) rehab loans may be “forward” mortgages or refinance loans and can be used combined with the “standard” FHA rehab loan, the 203(k). In cases where the 203(h) and the 203(k) are combined, the no-money-down option does not apply.
Instead the borrower will be required to make the down payment needed for the FHA “standard” 203(k) rehab loan. Those who apply for the 203(h) loan by itself would technically qualify for the no down payment option.
Borrowers who have had properties damaged in a wild fire or other natural disaster should not assume they can stop making mortgage payments, even if the home is completely uninhabitable.
It’s strongly recommended to contact the lender as soon as possible after the incident to arrange for loan forbearance, payment arrangements, or other options that might be open depending on circumstances.
The disaster relief for California wildfire victims includes possible forbearance and other measures. According to the HUD official site, “HUD offers different forbearance and loan modification options for FHA borrowers affected by disasters. Borrowers having trouble making regular payments should contact their loan servicer as soon as possible for more information.”
Those living in the affected areas may also qualify for FEMA assistance and other disaster relief.
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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