Home Financing for Those in Disaster Areas

U.S. Housing and Urban Development has announced that federal assistance will be provided to those who lost homes located in a FEMA disaster area. This means that those who have lost or had their homes damaged by one of the recent hurricanes, fires or floods are eligible for special $0 down FHA financing. Secretary Carson said, “As FEMA begins to assess the damage and respond to the immediate needs of residents, HUD will be there to offer assistance and support the longer-term housing recovery efforts.”

The following states are currently considered designated disaster areas:


Buyers in these states who have lost their home due to a FEMA designated disaster will be able to purchase a home using an FHA loan for $0 down. Even buyers who are no purchasing a home in these states will qualify for the program. Both homeowners and renters who have been affected by a disaster are eligible for FHA financing assistance. Borrowers who need funds to rebuild a home may also apply for low interest rate mortgages. Unlike a traditional FHA loan, this special program also allows borrowers to use the funds to rebuild investment or rental income property.

The 203(h) Loan

The federal government has a loan program in place to assist those affected by natural disasters, called the 203(h) Loan. The 203(h) Loan offers financial assistance for both rebuilding homes and buying new homes. More relaxed than a traditional FHA loan, the 203(h) Loan only requires borrowers to have a credit score of at least 580, and doesn’t require a down payment. The income requirements are more lenient as well.

HUD spokesman Lemar Wooley has said, “FHA also relaxes employment and income requirements for disaster victims who may be forced to obtain new employment, temporary employment or who have lost employment documentation in the disaster.”

Features and Highlights of the 203(h) Loan:

  • $636,150 Max Loan Amount (varies by area).
  • 580 FICO Minimum
  • 100% Financing
  • 15/30 Yr. Fixed
  • Original home must be located in a Federally Declared Disaster Area
  • Home must have been destroyed or damaged to such an extent that reconstruction or replacement is necessary
  • Borrower must have been permanent resident of a destroyed or substantially damaged residence
  • Home may be rebuilt or purchased anywhere
  • Must submit application within one year of Presidential disaster declaration
  • Borrower must meet all other requirements for FHA qualification
  • Borrowers with existing mortgages on substantially damaged or destroyed property within the disaster area must show those mortgages are paid off

203(h) Loan Eligible Properties:

  • One-unit detached homes
  • One-unit detached home in a PUD
  • Units in FHA approved condominium projects
  • Property must meet HUD’s Minimum Property Standards and Minimum Property Requirements

Obtain Your Benefits

Federal Home Loan Centers can help you with every step of the process in obtaining a 203(h) Loan, and can also provide you with a list of affordable new housing options. Contact Federal Home Loan Centers today, and speak with a helpful representative about your financing options.

Apply For Fed Home Loan Assistance

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