The Section 203(h) program allows The Federal Housing Administration (FHA) provides home financing to victims of a major disaster who have had their homes substantially damaged or flooded. 2017 has been a devastating Hurricane season, Harvey in Texas, Irma in Florida and Hurricane Nate on the Gulf Coast. FHA 203h loans will help homeowners put back together the pieces after horrific wind, flood or fire damage.
Please note – as of 2019 we no longer offer the 203(h) program. However, the requirements listed below should apply to most lenders and banks that still do offer the program.
FHA 203h Purpose:
- The FHA section 203(h) program allows FHA to insure mortgages through approved lenders and bank to victims of a major disaster who have 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 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.
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.
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, also save any insurance claim forms, photos and other important information if possible.
- 203h loans are for principal owner residences only. There is an occupancy requirement for this program – no investment homes permitted. The new home being purchased is NOT required to be in the same location. Example: your home in Tampa was destroyed and you want to relocate to Jacksonville – this is acceptable.
Eligible Properties Types:
- Principal Residences – Single-Family Homes, PUD
- One-unit detached homes
- FHA-approved established condominium projects
Ineligible Property Types:
- Investment Properties
- Second Homes
- Attached Properties
- 2,3,4 Units
- Manufactured Housing
- Co-Ops, Condotels, Time share
- Mobile and Manufactured homes are not eligible
FHA 203h Loan Limits: