Buy
A Home After A Disaster With Government Help
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Buying
a home after a disaster seems like an overwhelming task, but the government
provides some help through a FHA program, 203(h). By providing mortgage
insurance to disaster victims, borrowers can finance the purchase of
a home or rebuilding costs.
203(h) Details
After an area has been declared a disaster area by the President, victims
in that area are eligible for the 203(h) program, which provides mortgage
insurance. Since a disaster affects jobs, finances, and property risk
levels, the government offers to absorb the risk for mortgage lenders.
As a result, lending companies are willing to finance a mortgage to
buy a home or rebuild.
Mortgage insurance is not free though. You will need to pay an upfront
premium as well as monthly premiums. However, there are benefits to
this program. For example, no down payments are required for this type
of loan. Closing costs are to be paid in cash or as part of the loan
premium, not to exceed 5%. Fees, including origination, appraisal, and
inspection fees, are also set by the FHA.
FHA loans are targeted for low to mid income families, so mortgages
are limited to $172,632 to $312,895 for a single family home. The loan
amount depends on the cost of living in the area. For multi-family homes,
the loan amount can be higher.
FHA Lenders
FHA mortgage lenders are private financing companies, including banks
and mortgage companies, that have been approved by HUD to administer
FHA programs. Just like with any type of mortgage, you should compare
interest rates before committing to a lender. Online mortgage brokers
allow you to quickly compare quoted interest rates.
You have one year to file an application for the 203(h) program with
your mortgage lender after the disaster.
The Process
By using the FHA 203(h) program, you only add a little extra paperwork
to ease your mortgage application toward acceptance.
When you are applying for a loan, you will want to ask for the application
for the mortgage insurance program. HUD approved lenders will submit
the application through the proper channels. At this point the mortgage
company will handle the rest of the process, you will just need to complete
the final loan paperwork.
To view our list of recommended lenders online for government backed
mortgage financing, visit this page:
http://www.abcloanguide.com/govloans.shtml
About The Author: Carrie Reeder is the owner of http://www.abcloanguide.com,
an informational website about various types of loans.
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