FHA 203(h) Mortgage For Hurricane Victims 

FHA catastrophe loans are popular if you’ve been affected by a hurricane or any major disaster in your area. FHA home loans can be beneficial as disaster relief loans. Section 203(h) of the National Housing Act allows the Federal Housing Administration to offer a mortgage for disaster-affected homeowners.

What Does The FHA Do?

The Federal Housing Administration, referred to as FHA, is a division of the HUD – the Department of Housing and Urban Development. The agency was created out of the National Housing Act of 1934 and was established to help fix many of the problems and challenges faced by the mortgage industry. The agency was created to address mortgage issues during the Great Depression.

The purpose of the office was to reduce down payments on mortgages. The agency was tasked with increasing home ownership with the insurance of mortgage loans against default. Lenders are more willing to give money to borrowers that have been termed ‘high risk.’ This is due to insuring the loans against defaulting. 

The Federal Housing Administration (FHA) provides approved lenders with mortgage insurance. The FHA home loan program is created for borrowers who cannot make sizable down payments, have marginal credit, and do not qualify for conventional loans.

Consequently, more people can access mortgage loans easily. 

It is worth noting that the Federal Housing Administration does not lend out money. The agency only insures mortgage loans issued by various lending institutions it approved.

How Does The FHA 203(h) Loan Work?

The FHA 203(h) loans for disaster victims have become increasingly popular due to recent natural disasters. This has consequently led to the increasing search for hurricane rehab loans in Florida, where Hurricane Ian recently struck. 

The FHA 203(h) mortgage insurance program for disaster victims is designed to assist victims of disasters. The program helps borrowers in official disaster areas declared by the President. The program was designed to help disaster victims in the abovementioned areas during the first year after the catastrophe. It helps them become new homeowners or helps people who lost their homes to the disaster to rebuild them or buy a new one.

Benefits of FHA 203(h) Loan

The benefits of the FHA 203(h) loans are numerous and quite similar to what other FHA-insured mortgage loans offer. Below are some of the many advantages of the program:

• No down payment

This benefit is one of the unique features of the 203h loan program, especially compared to other FHA loan programs. The program allows victims of disasters to finance 100 percent of the home value up to the loan limits permitted in their area.

• Limited Closing Fees

Like any other FHA-insured loan program, 203(h) home loans have limits set by the Federal Housing Administration.  The agency defines many of the fees that can be charged by lending institutions for processing and closing a loan.

• Relaxed Credit Requirements

To help disaster victims get back on their feet as soon as possible and consider their condition after such an occurrence, the FHA offers programs to individuals with relatively marginal credit. This is unlike many conventional loans, which explains the popularity of FHA-insured loans such as the 203(h) and 203k loans.

Apply for an FHA 203(h) Loan

As mentioned earlier, you can apply for the loan if you resided in a Presidentially-declared disaster area within the last twelve months and your home has been significantly affected by the disaster, you can apply for the loan. 

Like other FHA-insured loans, applications for the 203h home loan and any other such loans designed for flood victims are to be made by approved lending institutions. This is so as the FHA does not provide loans directly. And as mentioned earlier, such applications must be made within the first year following the occurrence.

No one wishes for natural disasters. However, because they are beyond our control, it is only advised to implement all measures to facilitate a fast recovery. 

Call us at (239) 310-5599 to speak with our Home Loan Specialists. We are here to assist you with disaster relief loans.