The Federal Housing Administration today announced a new option that allows FHA-insured homeowners whose homes were damaged by recent natural disasters to remain in their homes, and also reduces losses that would otherwise negatively affect FHA’s mutual mortgage insurance fund.
FHA’s “disaster standalone partial claim” allows borrowers to cover up to 12 months of missed mortgage payments through an interest-free second loan on the mortgage, payable only when the borrower sells the home or refinances the mortgage. FHA also streamlined income documentation and other requirements to help provide immediate relief to borrowers struggling to make their payments in the wake of recent hurricanes and wildfires.
FHA has instructed mortgage servicers in Texas, Louisiana, Georgia, Florida, South Carolina, California, Puerto Rico and the U.S. Virgin Islands to offer these additional options to eligible disaster victims affected by hurricanes Harvey, Irma and Maria and the California wildfires.
