The FHA Section 203(h) program allows The Federal Housing Administration (FHA) to provide home financing to victims of a major disaster who have had their homes substantially damaged or flooded. Hurricane Ian recently devastated Florida from coast to coast. Naples, Fort Myers, Key West, all the way to Orlando, and even Jacksonville felt great impacts from the storm. FHA 203h loans are designed to help homeowners put back together the pieces and rebuild after horrific wind, flood or fire damage.
FHA 203h Purpose:
- The FHA section 203(h) program allows FHA to insure mortgages through approved lenders and banks to victims of a major disaster like Hurricane Ian who had their homes substantially damaged.
- This program helps victims in presidentially designated disaster areas recover by making it easier for them to get mortgages and become homeowners or re-establish themselves as homeowners.
- The borrower’s application must be submitted to the lender within one (1) year of the President’s declaration of the disaster.
- Any eligible home that has been destroyed in a presidentially declared disaster area is eligible to apply for mortgage insurance under this program whether they owned the home or were renting it.
- This program is being offered for both purchase and refinance transactions.
- Eligible Florida Counties include Charlotte, Collier, DeSoto, Flagler, Hardee, Hillsborough, Lee, Manatee, Orange, Osceola, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, Volusia. *More neighboring counties could be added later.
FHA 203(h) Benefits:
- Eligible borrowers may receive financing up to 100% of the sales price.
- 15 and 30-year fixed terms available (no adjustable rate terms)
- The closing cost can be paid by the borrower, home seller or lender via premium pricing.
- Section 203(h) loans require mortgage insurance premiums (MIP) the same as regular FHA loans. This is to be paid as upfront, or most commonly, added to the borrower’s loan amount.
Florida 203(h) Loan Eligibility:
- 620 minimum FICO score, lender “overlays” may also apply. Read more about FHA Loan Details. The credit requirements for this program are more relaxed when compared to standard FHA loans. Derogatory credit (missed payments, etc) as a result of the disaster and missed work is often overlooked.
- Your previous residence must have been located in a Federally declared disaster location and be damaged to such an extent that rebuilding or replacing is necessary. Remember, borrowers have up to one year from the date the disaster area was declared to apply. Be sure you can document residency, and also save any insurance claim forms, FEMA documentation, photos, and other important information if possible.
- 203h loans are for principal owner residences only. There is an occupancy requirement for this program – investment homes are not permitted. The new home being purchased is NOT required to be in the same location. Example: your home in Fort Myers was destroyed and you want to relocate to Jacksonville – this is acceptable.
Eligible FHA 203h Properties Types:
- Principal Residences – Single-Family Homes, PUD
- One-unit detached homes
- FHA-approved established condominium projects
Ineligible FHA 203h Property Types:
- Investment Properties
- Second Homes
- Attached Properties
- 2,3,4 Units
- Manufactured Housing
- Co-Ops, Condotels, Timeshare
- Mobile and Manufactured homes are not eligible
FHA 203h Loan Limits:
Borrowers can look up their 2022 FHA loan limits at the HUD site – https://entp.hud.gov/idapp/html/hicostlook.cfm
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