If you’re a homeowner with an FHA or VA loan who’s gone through a hurricane or other natural disaster, you likely qualify for foreclosure relief. Read on to learn out more about the different types of available assistance for homeowners with these types of loans, as well as help for homeowners in general after a natural disaster.
If you've gone through a natural disaster, your mortgage loan is FHA insured, and you meet certain criteria, you’re entitled to a foreclosure moratorium (which means a foreclosure can’t start or proceed) and possibly a foreclosure avoidance option, like a forbearance or loan modification.
Generally, if you fail to make your mortgage payments, the loan owner may foreclose. In some cases, though, a foreclosure moratorium will prevent this from happening—at least temporarily.
The U.S. Department of Housing and Urban Development (HUD) usually provides a 90-day moratorium on foreclosures of FHA-insured home mortgages following a natural disaster if:
HUD also typically extends its 90-day moratorium if the disaster was especially damaging. For example, in the case of homeowners who suffered damage as the result of Hurricane Harvey, Irma, or Maria, HUD granted a 180-day moratorium on foreclosures. Then, HUD extended the moratorium for victims of Hurricane Maria in Puerto Rico and the U.S. Virgin Islands who meet certain criteria until September 15, 2018. After the California wildfires in 2017, HUD granted a 90-day foreclosure moratorium.
The moratorium begins on the date the area is declared a disaster area, and applies to starting a foreclosure as well as foreclosures that have already started.
HUD offers loan forbearances and loan modifications to borrowers in disaster-affected areas who are having trouble making their mortgage payments.
Forbearances. You might qualify for one or more periods of reduced or suspended payments.
Modifications. In most cases, you have to occupy your home in order to get a loss mitigation (foreclosure avoidance) option for your FHA loan, but in the case of a presidentially-declared major disaster area, the rules are sometimes different because the home might not be inhabitable.
To qualify for a modification after a natural disaster, the borrower and the property must typically meet the following requirements:
The borrower generally has to repair the home and occupy the dwelling as an owner-occupant before completing the loan modification.
Disaster Standalone Partial Claim. If you have a FHA-insured loan and fell behind in your mortgage payments because of Hurricane Harvey, Irma, or Maria, or the California wildfires in 2017, you might be eligible for a Disaster Standalone Partial Claim. With this option, FHA wraps up to 12 months of your missed mortgage payments into an interest-free second loan on your home. (To learn more, read FHA Introduces New Foreclosure Avoidance Option for Disaster Victims.)
There are several easy ways to find out if your loan is FHA-insured:
If you have an FHA loan and you’re having trouble making your monthly loan payments because of a natural disaster, you should contact your servicer immediately to request assistance. If you aren’t satisfied with your servicer's response, you may call a HUD-approved counseling agency toll free at 800-569-4287 or get in touch with HUD's National Servicing Center.
For more information on assistance for borrowers with FHA loans after a natural disaster, go to the HUD website. Hover over “Resources” and click on ”HUD Disaster Resources.”
If you have a U.S. Department of Veterans Affairs (VA) loan, you might qualify for a foreclosure moratorium or forbearance after a natural disaster. While the VA doesn’t give specific instructions to loan owners and servicers on these subjects, it encourages them to consider homeowners who’ve gone through a natural disaster for moratoriums and forbearance options.
The VA generally requests that loan owners and servicers implement a 90-day moratorium on starting new foreclosures after a natural disaster.
The VA encourages loan owners and servicers to grant forbearance to borrowers who are struggling to make payments as the result of a natural disaster.
Also, if a member of the National Guard is called to active duty as part of recovery efforts, the VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties due to their service.
To find out if you have a VA loan, check your mortgage documents or call your loan servicer.
If you have a VA loan and you were adversely affected by a natural disaster, the VA suggests you take the following steps:
The Federal Emergency Management Agency (FEMA) provides assistance to individuals and families who lose their homes due to a Presidentially-declared disaster. Disaster assistance is generally:
To find out if your home is in a disaster area, go to the FEMA website and enter your full address to see if your area has been declared for individual assistance. You may begin the disaster application process online at the website or by calling 800‐621‐3362.