HUD Announces Foreclosure and Mortgage Help for California Wildfire Victims

If you’re the victim of a California wildfire, you might be eligible for disaster assistance from the U.S. Department of Housing and Urban Development.

On August 22, 2020, President Trump issued a major disaster declaration for Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma, and Yolo counties in California. This declaration allows the U.S. Department of Housing and Urban Development (HUD) to offer foreclosure relief and other assistance to qualifying families who live in these counties.

Types of Available Disaster Assistance for California Wildfire Victims

HUD announced in a press release that it would provide the following types of foreclosure and mortgage help to homeowners who’ve been forced from their homes by wildfires in the affected counties.

Foreclosure Relief

Generally, when borrowers don’t make their mortgage payments, the lender may initiate a foreclosure once the 120-day waiting period under federal law expires. After a natural disaster, though, the government or lender might impose a moratorium to prevent foreclosures from going forward, at least temporarily.

For the California counties covered under the Presidential declaration, HUD set an automatic 90-day moratorium on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. The moratorium starts on the federal disaster declaration date, August 22, 2020. To get help or learn more about foreclosure relief, call your loan servicer or FHA’s Resource Center at 800-304-9320.

Mortgage Insurance When Reconstructing or Buying Another Home

Under HUD's Section 203(h) program, the FHA can insure mortgages from qualified lenders to victims of a major disaster who’ve lost their homes and are in the process of rebuilding or buying another home. Borrowers that get loans from participating FHA-approved lenders are eligible for 100% financing, including closing costs.

Mortgage Insurance When Buying or Refinancing and Rehabilitating a Home

HUD's Section 203(k) loan program insures mortgages covering the purchase or refinancing and rehabilitation of a home that’s at least a year old. This program enables homebuyers and homeowners to:

  • finance the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or
  • finance the rehabilitation of their existing home.

Getting Counseling and Other Help

A HUD-approved housing counselor can provide you with the following, among other things, at no cost:

  • a comprehensive post-disaster assessment and action plan
  • help dealing with your servicer on loan relief options, and
  • assistance with filing Federal Emergency Management Agency (FEMA), insurance, and Small Business Administration (SBA) claims.

FEMA provides financial assistance to federally-declared disaster areas, and the SBA has special loan programs to help individuals and businesses after a natural disaster.

You can learn more about assistance for disaster victims on HUD’s Disaster Resources webpage. Also, check out our article on Foreclosure and Mortgage Relief for Wildfire Victims. Even if you have another kind of loan, like a Fannie Mae or VA-guaranteed loan, you might qualify for foreclosure and mortgage help after suffering the effects of a wildfire.

Effective date: August 22, 2020