Disaster Relief for FHA Homeowners
How to get home disaster relief assistance for FHA homeowners, this is the current issue for millions of people who have been in disaster struck areas. In the last few years it seems that mother earth is raging. First came Hurricane Katrina then there where terrible snow storms, fires, floods and now Tornadoes twister storms hitting Alabama, North Carolina, Oklahoma, Virginia, Arkansas, Mississippi, Massachusetts and Georgia.
Million of home and houses have suffered some kind of damage, other homes have been completely wiped out leaving millions of American as refugees in their own state. For these nature disasters the government has the FEMA (Federal Emergency Management Agency) as part of the U.S. Department of Homeland Security.
Another option for relief can be the SBA (Small Business Administraion) which help out for homeowners and rentals (no need to be a business owner) with low rates disaster loans for housing and personal needs.
FEMA and HUD For Homeowners Disaster Relief
FEMA by its nature is a federal assistance and is supporting four types of eligible applicants for (PA) public assistance:
- State Government Agencies
- Local Governments and Special Districts – county, city, village, town, district.
- Private Non-Profit Organizations – Colleges, schools and universities, hospital, outpatient facility, homes for the elderly, Museums, zoos, community centers, libraries, homeless shelters.
- Federally recognized Native American Tribes – Indian or Alaskan.
As you can see, private homeowners have no direct assistance from these FEMA public assistance grants and disaster relief assistance. Into this exact needs the HUD (U.S. Department of Housing and Urban Development) fits in and offers assistance for disaster recovery and relief aid for FHA homeowners.
Who Is Eligible For Disaster Relief
The first requirement for a homeowners disaster relief is that the disaster will be declared by the president as a “disaster”. Until such presidential disaster declaration, and no matter how hard the disaster is, the FHA, HUD and FEMA have no legal authorization for accepting applications and processing the relief assistance.
The first advice by HUD to contact your lender and let them know you are in trouble. The disaster relief does not have to be because your house was crushed by a tornado, it is enough that the place where you work at was damaged or closed for you to be in financial stress and be late on your mortgage payments.
Who Is Eligible For Homeowner Relief
By the HUD guidelines, there are four main guidelines to check whether the disaster loans assistance is relevant for you. There are four questions to answer, which will help you know if you are a candidate for relief aid. If you are, then your lender will be able to cancel or deley any forclosure risks for 90 days.
HUD Disaster Relief Question #1 – Did your income decrease or did your family expenses rise. As the FHA home loan is given according to ‘loan to income ratio’, (back-end ratio) and change in those may mean that the insured loan is at risk.
HUD Disaster Relief Question #2 – Did the rise in expenses or drop in income can be in direct connection to the disaster. If you were fired because your work place shut down with no connection to the disaster, then you are not eligible. If you lost your job because it was wrecked by a storm, or your expenses were raised because your car was crushed by a falling tree.
HUD Disaster Relief Question #3 – What kind of effect did this disaster had on the mortgage payments. If because of these two first questions you have difficulty to stay current on the mortgage, than the relief program is for you.
HUD Disaster Relief Question #4 – What other financial resources do you have? Have you any insurance ? Have you got paid by any insurance settlements? What other financial options and solutions do you have to pull yourself out from the disaster outcomes.
The lenders can delay or cancel initiation of foreclosure for 90 days.
FHA Disaster Relief Requirements
Beyond the above requirements there are a few more FHA requirements to be included in the FHA disaster relief program. Lenders were instructed to allow grace period before going for foreclosure, this moratorium can be for 90 days or a complete cancellation of the foreclosure process. In order to postpone any foreclosure on your FHA home loan, you need to check if you belong to one of these disaster categories. FHA Disaster relief foreclosure moratorium is granted to one of the three options bellow:
- 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.
- You are a household member of someone who is deceased, missing or injured directly due to the disaster, you qualify for a moratorium.
- Your financial ability to pay your mortgage debt was directly or substantially affected by a disaster, you qualify for a moratorium.
The fourth group:
There is another group of people which were not facing foreclosure when the disaster happened they are the fourth group. For many other people, who where current on all their mortgage payments and were not in any foreclosure procedures, these three options above are not relevant. For people who did not miss payments and where on time until the disaster struck, getting a moratorium is not a solution. If you think you belong to the fourth group, you need to contact your lender and let them know your situation, let them know you may be having problems to keep up with the mortgage payments.
The FHA approved lenders where instructed to find financial solutions for people who because of the disaster are having problems to stay current on the mortgage. FHA approved lenders should check and evaluate each mortgage and borrower to find out how it was affected by the disaster, and find reasonable ways to help them through this FHA disaster relief program for homeowners.
FHA Disaster Relief Solution Possibilities
There are several options for solutions, each of the options will be evaluated by the lender and tailored per borrower’s needs. Before applying for the FHA homeowner disaster relief, prepare all the necessary documentation. The FHA and the lender will need to see insurance papers, medical records of injuries, death certificates for disaster victims. Make sure the lenders are aware to your situation and understands that you are in a presidential declared disaster area.
1. Lenders can postpone any extreme action, otherwise they might have choosing to take, such as not referring the late mortgage to foreclosure.
2. Lenders want to help you keep your home, and stay a paying borrower. They will try and search for available loss mitigation assistance. There are several loss mitigation solutions, and the best option will be chosen together with you.
3. In order to assist you stay a homeowner and struggle through, the lenders may look for forbearance plan, or execute a loan modification or a partial claim. This will take place to help the homeowner be able to get the financial issues back on track, and carry on with the new terms safely.
If you have contacted your lender and are no satisfied with the solution or you think there are better options for you within the FHA disaster relief program, do not hesitate and contact HUD-approved counseling agency toll free at (800) 569-4287 or contact HUD’s National Servicing Center.
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