Disaster Victims Get More Mortgage Relief
February 26, 2018
The Federal Housing Administration is expanding mortgage relief to FHA-insured homeowners who live or work in areas that were affected last year by Hurricanes Harvey, Irma, and Maria, as well as wildfires and mudslides in California. Mortgage servicers in those areas will offer additional payment options to help disaster victims remain in their homes.
The FHA is launching a “Disaster Standalone Partial Claim” option, which covers up to 12 months of missed mortgage payments through an interest-free second loan on the mortgage. That loan is payable only when the borrower sells the home or refinances the mortgage. Further, the option requires no trial period or balloon payment and allows borrowers to keep their existing low-interest rate, loan term, and monthly mortgage payment.
“It’s clear that FHA homeowners in these areas need more help to get back on their feet as they recover from these storms,” says HUD Secretary Ben Carson. The FHA is offering “immediate relief to these borrowers, which will allow them to resume their mortgage payments without crippling payment shock and fees while protecting our insurance fund in the process.”
The FHA’s new option is available to homeowners who became delinquent on their mortgage payments due to the disasters and whose initial mortgage forbearance period is ending. Qualifying properties must be owner-occupied, and the borrower’s income must be equal to or more than their income prior to the disasters.
Updated: October 15, 2019