Iowa Foreclosure Law: Special Protections After a Disaster

If you’re facing foreclosure in Iowa, you might qualify for foreclosure relief after a natural disaster or a governor-declared economic emergency.

If you’re facing a foreclosure after a natural disaster in Iowa—like a drought, flood, heat, hail, or storm—or after a governor-declared economic emergency, you might qualify for foreclosure relief. Potential forms of relief include a continuance (which means a foreclosure can’t start or proceed) and protection against a deficiency judgment after the foreclosure.

Foreclosure Protections for Certain Property Types

A foreclosure delay, known as a "continuance" or “moratorium,” is available for agricultural and other properties in Iowa under certain circumstances.

Continuances After a Natural Disaster

Under Iowa law, a borrower can apply to the court for a foreclosure continuance, not to exceed two years, if the property is agricultural and:

  • the borrower admits to being behind in payments, and
  • the borrower fell behind in payments because of climatic conditions—like a drought, flood, heat, hail, storm, or other climatic conditions, or by reason of the infestation of pests—which affects the land. (Iowa Code § 654.15(1).)

(For general information about foreclosure moratoriums after a natural disaster for different loan types—like Fannie Mae/Freddie Mac, FHA, and VA loans—see Help for Homeowners Facing Foreclosure After a Natural Disaster: Foreclosure Moratoriums.)

Continuances If the Governor Declares a State of Economic Emergency

Borrowers in Iowa can apply for a foreclosure continuance if the governor declares a state of economic emergency. This type of continuance may be available for:

  • real estate used for farming
  • designated types of real estate not used for farming, including real estate used for small business, or
  • all real estate.

The governor must state in the declaration the types of real estate eligible for the continuance, which will last one to two years depending on the type of property. (Iowa Code § 654.15(2).) You must apply for the foreclosure continuance within one year of the governor’s declaration of economic emergency and admit to being behind in payments.

When the court may end a continuance early. A court can terminate a foreclosure continuance under certain circumstances, like if the foreclosing party has made reasonable efforts in good faith to work with you to restructure the debt and to utilize state/federal programs designed and implemented to provide debtor relief options. (Iowa Code § 654.15(2).)

Protections Against a Deficiency Judgment After a Natural Disaster

Iowa law deems property that is unoccupied due to a natural disaster as “occupied” for purposes of certain legal protections. (Iowa Code § 654.1A). So, if Iowa law states that current occupancy is required for particular borrower protections and benefits—like protection from a deficiency judgment—the property is considered occupied when the owner leaves because of a natural disaster.

Example. Suppose you took out a mortgage loan in Iowa, but fell behind in payments. You’re now facing a foreclosure. The lender has chosen to foreclose without redemption, but doesn’t waive (give up) its right to a deficiency judgment. Also, the mortgaged property is:

  • your residence
  • a one-family or two-family dwelling, and
  • you don’t file a demand for delay of sale.

Generally, under these circumstances, the lender cannot get a deficiency judgment. (Iowa Code § 654.26.) But if you move out of the property because of a job change, the property is no longer be considered a "residence" and you wouldn’t qualify for protection from a deficiency judgment. However, if you move out because of a natural disaster, the property would be considered occupied and the lender couldn't get a deficiency judgment.

Getting Help

To get basic information about foreclosure procedures, deficiency judgments, and the redemption period in Iowa, see our Key Aspects of State Foreclosure Law: 50-State Chart.

If you need detailed information about how foreclosure works in Iowa or want to learn about foreclosure protections after a natural disaster or other circumstances in Iowa, consider talking to a local foreclosure attorney.

If you want to learn more about different ways to avoid a foreclosure, like by entering into a loan modification, forbearance agreement, or repayment plan, consider talking to a HUD-approved housing counselor.

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