The U.S. Department of Housing and Urban Development (HUD) has granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages for homeowners affected by the recent tornados in Oklahoma and other states.
The disaster relief applies to borrowers with homes in towns that the federal government has declared Major Disaster Areas.
In addition, HUD is making mortgage insurance available to allow those who lost their homes to get mortgage financing. HUD's Section 203(h) program provides FHA insurance to victims looking to rebuild or purchase another home. Borrowers from participating FHA-approved lenders are eligible for 100% financing, including closing costs.
What's more, HUD's Section 203(k) loan program enables tornado victims to finance the repair or replacement of their homes through a single mortgage.
HUD is also offering state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.
On Tuesday, President Obama declared Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie counties as federal disaster areas.
Meanwhile, Freddie Mac and Fannie Mae are offering their own mortgage relief options for homeowners affected by the tornados, including suspending foreclosure for up to 12 months; waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
The FHA-mandated disaster relief applies to borrowers with homes in areas that the federal government has declared Major Disaster Areas – however, Freddie Mac and Fannie Mae are urging servicers to consider extending relief to borrowers who work in disaster areas but have homes in unaffected areas, as they are financially impacted, as well.
A list of areas declared as ‘disasters’ can be found HERE.