When disaster strikes, it brings a wave of uncertainty. After months of making daily decisions about your family’s well-being, the time comes to rebuild your life. At this point, securing safe, permanent housing is a top priority. Will lenders offer mortgages to people starting from scratch, or do they place them in a high-risk, avoid-at-all-costs category?

At MortgageDepot, we work with Plaza Home Mortgage to help you meet your post-disaster housing needs and return to your real estate goals. We have access to the FHA 203(h) program to help those faced with the challenges of a Presidentially Declared Major Disaster.

What Is a Presidentially Declared Major Disaster Area?

A Presidentially Declared Major Disaster Area (PDMDA) is a location devastated by a natural or man-induced event. A PDMDA is eligible to receive federal funding for restoration efforts. Hurricanes, tornados, floods, earthquakes, and wildfires are a few examples of events that might qualify a region as a PDMDA.

The FHA 203(h) Program in a Nutshell

The FHA 203(h) program offers mortgages to victims residing in a PDMDA. If your home was damaged or destroyed due to a qualifying disaster, you can use this program to rebuild or purchase another home. This program is usually paired with FHA 203(b) or 203(k) mortgage programs, which also allow for extensive renovations.

Who Is Eligible for the FHA 203(h) Program?

The following groups residing in a PDMDA are eligible to receive an FHA 203(h) mortgage:

  • U.S. citizens
  • Permanent resident aliens
  • Non-permanent resident aliens
  • Deferred Action for Childhood Arrivals (DACA) program recipients
  • Non-occupant co-borrowers

Additional FHA 203(h) Eligibility Requirements

In addition to those mentioned above, there are a few more eligibility requirements that borrowers need to know. Here’s the story:

  • Borrowers must have a minimum credit score of 550.
  • If the damaged or destroyed home is their primary residence, the borrower must submit their program application within one year of the major disaster declaration.
  • Detached and attached single-family homes, PUDs, and FHA-approved condos are eligible for the FHA 203(h) program.

FHA 203(h) Program Benefits

The FHA 203(h) mortgage is a lifesaver for homeowners who have hit hard times. Here are some of the benefits of the program:

  • The borrower can finance 100% of the new property’s purchase price. No down payment is required to qualify.
  • If this program is paired with the 203(k) loan option, the 203(k) LTV applies.
  • This mortgage allows maximum flexibility in income, credit, and asset documentation based on the borrower’s circumstances.
  • Flexibility is also provided when considering housing payment history and liabilities related to the damaged or destroyed home.
  • This loan program allows the borrower to purchase a new home or rebuild in any area. They do not need to remain in the PDMDA.
  • The destroyed or damaged property’s age is not a factor for this loan.

What Property Types Don’t Qualify for the FHA 203(h) Program?

Not every property type falls under the FHA 203(h) umbrella. Here is a list of the ones that don’t qualify:

If you own one of these property types and reside in a PDMDA, contact us to review your options.

Contact Us Today!

In the aftermath of a tragedy, there’s no place like home. If you’re emerging from the wake of a disaster, MortgageDepot and Plaza Home Mortgage can help. We work together to offer loan options that give our valued clients the security that comes with homeownership. Contact us to see if you qualify for the FHA 203(h) program!

Connect with one of our loan consultants for more information.

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