All You Need to Know About the FHA 203(h) Disaster Relief Loan Program
When natural disaster strikes, the devastation it leaves behind can be overwhelming, especially if your home is damaged or destroyed. At Supreme Lending, we know how difficult it can be to rebuild after such destruction. That’s where the FHA 203(h) Disaster Relief Loan may be able to help as an affordable option for those in eligible areas.
If you’ve been affected by disaster and are looking to rebuild or purchase a new home for a fresh start, Supreme Lending is here to help you navigate the challenging time with care and expertise. This guide will walk you through the FHA 203(h) loan, how it works, benefits, and why it may be a valuable program for helping disaster victims get back on their feet.
What Is the FHA 203(h) Disaster Relief Loan?
The FHA 203(h) is a government-insured mortgage program that provides financial assistance to individuals whose homes have been damaged or destroyed in federally declared disaster areas. This is designed to help homeowners and renters alike rebuild or purchase new homes in the wake of devastating events like hurricanes, floods, tornadoes, and wildfires.
What makes the FHA 203(h) Disaster Relief Loan unique is the ability to help make homeownership more attainable after such tragedy by offering flexible guidelines and 100% financing.
How Does FHA 203(h) Work?
The FHA 203(h) Disaster Relief Loan works similarly to other FHA programs but comes with added benefits and provisions specifically for disaster victims. Here’s a breakdown of how it works.
What Properties Are Eligible?
To qualify, your current home must be in a Presidentially Declared Major Disaster Area (PDMDA) and must have been damaged to the point where it is no longer livable. The loan must be secured within one year of the disaster declaration, offering you plenty of time to regroup and take the next step towards recovery.
Program Benefits
- No down payment required. One of the biggest benefits of this program is that there is no down payment requirement for eligible borrowers. This makes it easier to secure financing without the burden of saving for large upfront costs, especially after facing potential hardships caused by a disaster.
- Minimum credit score of 580. While there are still credit parameters in place, the FHA 203(h) offers more lenient requirements than other financing options. This may help borrowers whose credit was negatively impacted due to the natural disaster.
- Available for single-family or FHA-approved condos. The home must be a primary residence – either a single-family home or approved condominium project. This program is not designed for second homes or investment properties but is focused on truly helping homeowners get back on their feet.
- Purchase location flexibility. Through this program, it allows you to purchase a new home anywhere in the United States. The replacement home doesn’t have to be in a designated disaster area.
Combining FHA 203(h) with 203(k) Renovation
The FHA 203(h) program also offers the option to combine with an FHA 203(k) Standard or Limited Renovation loan. This involves adding renovation costs into a single mortgage to cover repairs and remodel projects ranging from minor updates to structural if approved. Plus, the damaged property is eligible regardless of the age of the home. It only needs to have been a habitable residence prior to the disaster.
Ready to Relocate or Rebuild?
Supreme Lending is here to help you move forward and rebuild when disaster strikes. To learn more about the FHA 203(h) Disaster Relief Loan or to go over other mortgage options, contact your local Supreme Lending branch today!
More Resources from the U.S. Department of Housing and Urban Development: