In the wake of a natural disaster, like a hurricane or wildfire, you might qualify for certain foreclosure protections, like a moratorium, depending on what entity owns or guarantees your mortgage loan. Generally, you can qualify for a moratorium if you have an FHA-insured, Fannie Mae, Freddie Mac, or VA-guaranteed loan, and you meet specific criteria.
If your loan isn't one of these types, borrowers with any type of loan might qualify for financial relief from the Federal Emergency Management Agency (FEMA). Also, loan servicers sometimes offer relief options, like forbearances or modifications, to homeowners affected by a natural disaster.
The U.S. Department of Housing and Urban Development (HUD) often provides a 90-day moratorium on foreclosures of FHA-insured home mortgages following natural disasters, so long as the property was directly affected by the disaster and you don't have other resources, like insurance settlements, to help you catch up on payments.
You're generally eligible for a foreclosure moratorium if you're in one of three following basic groups:
A moratorium may be extended, like to 180 days, if:
In some cases, FHA offers loan modifications and forbearances to borrowers who went through a disaster and are struggling to make their mortgage payments. And, in February 2018, FHA introduced a Disaster Standalone Partial Claim option to help struggling borrowers start making mortgage payments again without a payment shock. This option puts up to 12 months of missed mortgage payments into an interest-free second mortgage. The second loan becomes due and payable when the borrower sells the home or refinances. To qualify for a Disaster Standalone Partial Claim, you must meet certain eligibility requirements.
If you have an FHA loan and want to find out if you qualify for any of these protections or options, call your loan servicer.
To get more information about different options for homeowners after a natural disaster, go to FHA's Disaster Relief Options for FHA Homeowners website.
During times of natural disasters, the VA encourages loan holders and servicers to:
To get more information, go to the webpage for veterans at disasterassistance.gov.
Fannie Mae and Freddie Mac generally implement a 90-day foreclosure sale suspension immediately following a natural disaster if the property is within a federally designated disaster area. Fannie and Freddie also usually offer modification programs and other forms of assistance to homeowners who've gone through a natural disaster.
Mortgage lenders and servicers often also provide relief from foreclosure by offering flexible loss mitigation options to borrowers following a natural disaster. Possible relief options include:
Additionally, FEMA offers financial assistance to individuals and families whose property has been damaged or destroyed as a result of a federally declared disaster so they can make their mortgage payments or repair the home. Go to www.fema.gov for more information.