Special Programs for Disaster Survivors

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HUD and other federal and state agencies have introduced some special programs for disaster survivors. Other investors like Fannie Mae and Freddie Mac have also relaxed some requirements on their standard loan programs for survivors of disasters.

In this section we'll outline some of these types of loans. Be sure to check with your local lender or state housing finance agency to see what you might be eligible for. We’ll examine the following programs and products along this section of the road to housing recovery:

  • FHA 203(h) Disaster Loan Program
  • FEMA Home Repair Assistance Program
  • SBA Home Disaster Loan

FHA 203(h) Disaster Loan Program

The Section 203(h) program is offered through lenders to survivors of a major disaster who have lost their homes and are in the process of rebuilding or buying another home.

Through this program, the federal government helps survivors in special disaster areas designated by the president. The program makes it easier for disaster survivors to get mortgages and become homeowners or to re-establish themselves as homeowners.

People are eligible for this program if their homes are located in an area that was designated by the President as a disaster area and if their homes were destroyed or damaged to such an extent that reconstruction or replacement is necessary. These loans may be used to finance the purchase or reconstruction of a one-family home that will be the principal residence of the homeowner. The new home can be located anywhere in the country. Key features include:

  • No down payment is required The borrower is eligible for 100% financing.
  • Some fees are limited FHA rules impose limits on some of the fees that lenders may charge in making a mortgage.

This product is available only through FHA-approved lending institutions, such as banks, mortgage companies, and savings and loan associations.

More details on this program are at http://portal.hud.gov/hudportal/HUD?src=/program_ offices/housing/sfh/ins/203h-dft. To locate a participating lender, go to that Web page, scroll down to the last paragraph, and click on the link for “contact a HUD- approved lender.You can also call toll-free at 800-569-4287.

FEMA Home Repair Assistance Program

Through its Home Repair Assistance program, FEMA provides grants to homeowners whose primary residences require only a little repair in order to make them livable or accessible. The repairs must be able to be completed within 30 days of the start of work, cannot exceed a maximum repair amount set by FEMA, and must be necessary as a result of damage from the hurricane.

If you apply for Home Repair Assistance, FEMA will inspect your home and base the amount of its grant on the reasonable cost of repair to the damaged property. Repairs covered by Home Repair Assistance may include:

  • Plumbing, electrical systems, heating systems, air conditioning
  • Septic systems and water wells
  • Windows, doors, roof, and floor
  • Outside walls, roofs, home foundations
  • Repairs necessary to provide access to a residence
  • Repairs necessary to eliminate health and safety hazards

If you own a mobile home and it is your primary residence, Home Repair Assistance does cover repair costs related to blocking, leveling and anchoring the mobile home.

SBA Home Disaster Loan

The Small Business Administration provides low-interest, long-term loans to repair or replace a primary residence owned by a survivor in a federally declared disaster area. The SBA loan, which may be as much as $200,000, can be used to repair or replace eligible real property, to pay third parties (not family members) to remove debris from the property, or to rent equipment necessary for clean-up.

Key features of the SBA Home Disaster Loan include:

  • A homeowner or renter may apply for a personal property loan of up to $40,000 to help repair or replace personal property such as clothing, furniture, cars, etc., that was lost or damaged in the disaster.
  • A homeowner may apply for a loan of up to $200,000 to repair or restore his or her primary home to its pre-disaster condition.
  • If city or county building codes require structural improvements (or raising the level of the living area), the loan may be used to meet these requirements. Loans to repair or replace real property may be increased by as much as 20% for mitigation measures to protect the property from possible future disasters of the same kind.
  • If you already have a mortgage loan and can’t afford an additional payment, SBA may refinance all or part of your existing mortgage(s).
  • You do not have to wait to obtain an insurance settlement to file your application with SBA.
  • If you cannot get a loan elsewhere, the maximum annual interest rate for your SBA loan will not exceed 4%.
  • The SBA’s goal is to decide on each application within 14 days.

For more information, call the SBA at 800-659-2955, email disastercustomerservice@sba.gov or visit the SBA website at www.sba.gov.

HUD Relief for certain FHA, Fannie Mae and Freddie Mac Mortgages

If your loan is owned by Fannie Mae or Freddie Mac, you may be eligible for a loan modification or forebearance. Also, for those homes located within the Federally Declared Disaster (FDD) zone, HUD has instituted a 90-day moratorium on foreclosures of Federal Housing Administration (FHA) insured mortgages.

For further information about your mortgage, contact the National Servicing Center at 877622- 8525. For other questions, contact the FHA Resource Center at 800-CALL-FHA (800-2255342) or email: answers@hud.gov. Check to see if Fannie Mae owns your loan at: www.knowYourOptions.com/ loan lookup. Additional assistance? Call 1-800-7FANNIE (1-800-732-6643), or go to: www.knowYourOptions.com/relief.

Check to see if Freddie Mac owns your loan at: www.freddiemac.com/mymortgage. Additional assistance? Call 1-800-FREDDIE (1-800-373-3343) and select option #2, or go to: www.freddiemac.com and click on the Hurricane Sandy Relief link. Stop to See Lots of Program Details in Financial Resource Guide Check out the Loan Product Matrix at the end of this section for more information on specific affordable, disaster recovery loan programs.