Natural disasters, like floods, hurricanes and earthquakes, are rarely predictable and often cause extreme damage to residents and their homes in effected neighborhoods.  Recovery efforts in disaster areas hinge on getting people basic human services as soon as possible.  Access to clean food, water and shelter is paramount in these situations and all of those things require access to money.

To help those affected by natural disasters, the government offers the 203h loan, also known as the Disaster Recovery Loan, through the FHA insured loan program. The loan provides up to 100 percent of the funds needed to purchase a new or existing home, construct a new home or rehabilitate a home damaged in a presidentially declared disaster area.  The goal of the loan is to free up the borrower’s cash on hand during a natural disaster so that they can buy what’s important rather than worry about how they will pay for rebuilding their home.

Benefits of a 203h Disaster Recovery Loan

The 203h disaster recover loan has several benefits and can be used in the following ways:

• Construction of a new home – If your home was completely destroyed in the natural disaster, you can get funds to construct a new home from scratch.
• Purchase of a new or existing home – If your home was destroyed, damaged beyond repair or deemed unlivable you can get funds to shop for and purchase another home.
• Rehabilitation of an existing home – If your home was not completely destroyed, but damaged to the point where repairs are necessary, you can get funds to make the repairs once the recovery effort is complete.  This includes bringing the house up to current safety codes, adding handicap accessible features and repairing all interior and exterior home elements.

Recovery Loans Can Stop Foreclosure

Making the mortgage payment is the last thing on a person’s mind when they are struck with a natural disaster.  It’s easy to fall behind on payments and even get into foreclosure after a natural disaster strikes.  Another major benefit of a FHA 203h loan is that HUD can issue a moratorium on any loan preventing the lender from proceeding with the foreclosure process for a period of up to 90 days. This gives the borrower enough time to pull together their finances, possible insurance proceeds, and to work out an arrangement with the lender to return to current status on their loan.

Qualifying for a Disaster Recovery Loan

There are only two qualifications to qualify for a 203h disaster recovery loan:

1. The resident must have been affected by the presidentially declared natural disaster or have a home located within the disaster area; and
2. the resident must meet FHA qualifying guidelines.

To find out if you qualify visit LendingTree.com to submit a request form.  The process takes just a few minutes and connects you with several HUD approved FHA insured loan lenders.

Related Posts:

• FHA Loans for More than Just a New Home
• Who is the Ideal Candidate for an FHA Loan?
• Office of Sustainable Housing and Communities Aims to Reduce Cost of Home Ownership
• Potential New FHA Rules and Guidelines
• A Home Buyer’s Story: Deciding on an FHA Loan