Homeowners who go through a natural disaster, like a wildfire or other natural disaster, and then have difficulty making their mortgage payments are often entitled to one or more kinds of assistance. You might qualify for payment relief, a foreclosure moratorium (a temporary halt in foreclosure proceedings), or a loan workout option, like a forbearance or loan modification.
The U.S. Department of Housing and Urban Development (HUD), Fannie Mae, and Freddie Mac offer relief to victims of wildfires and other disasters. If you have a different kind of loan, you also might qualify for relief.
HUD usually provides a 90-day foreclosure moratorium, starting on the federal disaster declaration date, for Federal Housing Administration (FHA)-insured home mortgages
HUD also generally offers forbearance and loan modification options to borrowers with FHA-insured loans in disaster areas. It also typically provides new FHA-insured mortgages to affected homeowners so they can rebuild or buy (or refinance) a home, like through its Section 203(h) program or Section 203(k) loan program. To learn more about relief for victims of a natural disaster, review HUD's Disaster Relief Options for FHA Homeowners.
Borrowers in declared disaster areas who have Fannie Mae-owned loans are often eligible to stop making mortgage payments for up to 12 months. You won't incur late fees during this time, and the servicer won't report delinquencies to the credit reporting bureaus. Servicers are also authorized to suspend or reduce a homeowner's mortgage payments immediately for up to 90 days if it believes a disaster has affected the homeowner, but the servicer can't contact them.
You might also qualify for a loan modification or a suspension of foreclosure proceedings. The servicer has to suspend a foreclosure and other legal proceedings if it thinks a disaster has impacted the homeowner. While the servicer is supposed to put a hold on a pending action, if you're facing a foreclosure, call your servicer to make sure it stops the process and consider talking to an attorney to learn about your rights.
You can find out if Fannie Mae owns your loan and request help by going to www.knowyouroptions.com/relief.
Freddie Mac's disaster relief options are available to borrowers whose homes or places of employment are located in presidentially-declared major disaster areas where federal individual assistance programs are made available to affected individuals and households. Check FEMA's website for a list of these areas.
Borrowers with Freddie Mac loans might be able to suspend mortgage payments for up to 12 months. During this time, you won't have to pay penalties or late fees, and a forbearance or delinquency won't be reported to the credit bureaus. You might also qualify for a modification or a foreclosure moratorium. To find out if Freddie Mac owns your loan, use the Freddie Mac Loan Look-Up Tool. For more information, go to the Freddie Mac Disaster Relief website.
In areas where FEMA hasn't made individual assistance available, the servicer may offer forbearance programs or other mortgage relief to borrowers been affected by the wildfires.
If you have a loan that's guaranteed by the U.S. Department of Veterans Affairs (VA), you might qualify for a foreclosure moratorium (usually for 90 days) or forbearance after a natural disaster. While the VA doesn't give specific instructions to loan owners and servicers on these subjects, it generally encourages them to consider homeowners who've gone through a natural disaster for a moratorium, forbearance, or other options.
If you have a different type of loan, the lender, investor, or servicer might provide payment or foreclosure relief after a natural disaster. You might be eligible for a loan modification, a forbearance, or a waiver of late payments. Also, the lender or servicer might agree not to report negative information to the credit bureaus. Call your servicer to find out about available options.
The Federal Emergency Management Agency (FEMA) provides financial assistance to federally-declared disaster areas. The U.S. Small Business Administration (SBA) has special loan programs for disaster victims—even those who don't own a small business—who've experienced damage to their home or personal property and are in a declared disaster area.
A (free) HUD-approved housing counselor can provide you with a comprehensive post-disaster assessment and action plan, help you file FEMA, SBA, and insurance claims, and work with you and your servicer on loan relief options. Housing counselors help all kinds of borrowers, even if you don't have an FHA-insured mortgage.