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...
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