Federal Disaster Area Home Loans: $0 down FHA loans for Homeowners and Renters affected by Natural Disasters
After the recent hurricanes in the south and the firestorms in Napa, Santa Barbara and Ventura Counties the Department of Housing and Urban Development (HUD) has made these areas open to the FHA 203(h) loans for disaster victims.
FHA 203(h) loans for disaster victims are not open to any financially qualified applicant but only to those in federally declared disaster areas. The previous residence (owned or rented) must have been located in a federal disaster area and destroyed or damaged to such an extent that reconstruction or replacement is necessary. A list of the specified affected counties and cities and corresponding disaster declarations is determined by Federal Emergency Management Agency (FEMA). FHA 203(h) loans can be used to purchase a replacement home, rehab an existing home or as a refinance loan.
The FHA case number must be assigned within one year of the date the federal disaster area is declared, unless an additional period of eligibility is provided. The borrower must live in the property to be purchased/repaired/rehabbed/etc. in order to qualify for the FHA 203(h) loan program.
In most cases a down payment is not required for FHA 203(h) loans. The maximum Loan-to-Value (LTV) ratio limit is 100 percent of the Adjusted Value which means this is a $0 down program. With many FHA loans Sherwood Mortgage will help cover closing costs such that this is truly $0 down with $0 out of pocket at closing.