-- No downpayment is required. The borrower is eligible for 100
percent financing. Closing costs and prepaid expenses must be paid by
the borrower in cash or paid through premium pricing or by the seller,
subject to a 6 percent limitation on seller concessions.
-- FHA mortgage insurance is not free. Mortgagees collect from the
borrowers an up-front insurance premium (which may be financed) at
the time of purchase, as well as monthly premiums that are not
financed, but instead are added to the regular mortgage payment.
-- Some fees are limited. FHA rules impose limits on some of the fees
that lenders may charge in making a mortgage. For example, the lender’
s mortgage origination charge for the administrative cost of processing
the mortgage may not exceed one "point"—that is, one percent of the
amount of the mortgage excluding any financed upfront mortgage
insurance premium. In addition, property appraisal and inspection fees
are set by FHA.
--HUD sets limits on the amount that may be insured. To make sure that
its programs serve low- and moderate-income people, FHA sets limits
on the dollar value of the mortgage. The current FHA mortgage limit
ranges from $172,632 to $312,895. These figures vary over time and
by place, depending on the cost of living and other factors (higher limits
also exist for two- to four-family properties).
Eligible Participants:
FHA-approved lending institutions, such as banks, mortgage companies,
and savings and loan associations, are eligible for Section 203(h)
insurance.
Eligible Customers:
Anyone whose home has been destroyed or severely damaged in a
Presidentially declared disaster area is eligible to apply for mortgage
insurance under this program.
Application:
The borrower’s application for mortgage insurance must be submitted
to the lender within one year of the President’s declaration of the
disaster. Applications are made through an FHA-approved lending
institution, who make their requests through a provision known as
"Direct Endorsement," which authorizes them to consider applications
without submitting paperwork to HUD. Mortgage insurance processing
and administration for this and other FHA single-family mortgage
insurance products are handled through HUD's Homeownership Centers.
Technical Guidance:
This program is authorized under Section 203, National Housing Act (12
U.S.C. 1709, 1715(b)). Program regulations are in 24 CFR Part 203.
These regulations, as well as handbooks, notices, and letters relevant to
this program, are available through HUDCLIPS. The program is
administered by the Office of Single-Family Housing Programs in HUD’s
Office of Housing-Federal Housing Administration
| FHA 203H - Mortgage Insurance for Disaster Victims |
Summary:
The Section 203(h) program allows the Federal
Housing Administration (FHA) to insure mortgages
made by qualified lenders to victims of a major disaster
who have lost their homes and are in the process of
rebuilding or buying another home.
Purpose:
Through Section 203(h), the Federal Government 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.
Type of Assistance:
This program provides mortgage insurance to protect
lenders against the risk of default on mortgages to
qualified disaster victims. Individuals are eligible for
this program if their homes are located in an area that
was designated by the President as a disaster area and
if their homes were destroyed or damaged to such an
extent that reconstruction or replacement is necessary.
Insured mortgages may be used to finance the purchase
or reconstruction of a one-family home that will be the
principal residence of the homeowner. Like the basic
FHA mortgage insurance program it resembles (Section
203(b) Mortgage Insurance for One- to Four-Family
Homes), Section 203(h) offers features that make
homeownership easier:
The Section 203(h) program allows the Federal
Housing Administration (FHA) to insure mortgages
made by qualified lenders to victims of a major disaster
who have lost their homes and are in the process of
rebuilding or buying another home.
Purpose:
Through Section 203(h), the Federal Government 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.
Type of Assistance:
This program provides mortgage insurance to protect
lenders against the risk of default on mortgages to
qualified disaster victims. Individuals are eligible for
this program if their homes are located in an area that
was designated by the President as a disaster area and
if their homes were destroyed or damaged to such an
extent that reconstruction or replacement is necessary.
Insured mortgages may be used to finance the purchase
or reconstruction of a one-family home that will be the
principal residence of the homeowner. Like the basic
FHA mortgage insurance program it resembles (Section
203(b) Mortgage Insurance for One- to Four-Family
Homes), Section 203(h) offers features that make
homeownership easier:
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| USDA Loan Programs |
