FHA 203(h) Disaster Relief

Benefits and Eligibility:

• No down payment is required
• May be used for purchase or no cash-out refinance
• Maximum loan to value is 100% of the Adjusted Value
• Required to pay mortgage insurance
• Previous residence (owned or rented) must have been located in a Presidentially-Delcared Major Disaster Area [PDMDA] 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 are provided by the Federal Emergency Management Agency [FEMA]
• The purchased or reconstructed property must be a single family property or a unit in an FHA-approved Condominium Project, that is a primary residence. No manufactured homes

Who Should Use a 203(h) Loan?

Anyone whose home has been destroyed or severely damaged in a Presidentially declared disaster area is eligible to apply for this program.

Understanding FHA Mortgage Insurance 

FHA loans require the payment of mortgage insurance. There are two parts of FHA's mortgage insurance: a one-time upfront mortgage insurance premium [UFMIP] paid at closing, and annual mortgage insurance premiums [MIP]. The UFMIP is 1.75% of the purchase price of the home, and can sometimes be rolled into the total loan amount. The MIP is typically between 0.15% and 0.75% of the loan amount and is broken up among your monthly mortgage payments.

If an FHA borrower chooses to refinance into a conventional mortgage later, they may be eligible to eliminate the monthly mortgage insurance requirement.