The Federal Housing Administration announced today that it will make its “disaster standalone partial claim” a standard mortgage relief option for all victims of natural disasters in presidentially declared major disaster areas. This mitigation option was introduced last year to help borrowers struggling in the aftermath of Hurricanes Harvey, Irma and Maria; the California wildfires; and other natural disasters.
FHA’s disaster standalone partial claim allows borrowers to cover missed mortgage payments up to 30% of unpaid principal balance through an interest-free second loan on the mortgage, payable only when the borrower sells the home or refinances the mortgage. FHA-insured homeowners may be eligible if: they live or work within the geographic boundaries of a PDMDA; they had their ability to make mortgage payments is directly or substantially affected by the disaster; their mortgage was current or less than 30 days past due prior to the date of the disaster; and they have not already been approved for other mitigation options.
