FHA Loans Affected by Natural Disasters
July 15, 2025
If you have an FHA loan or were in the process of getting an FHA mortgage loan before a disaster and the property was damaged during the incident, you'll be glad to know FHA loan rules offer some flexibility and protections in such cases.
Much may depend on whether the disaster is recognized at the federal level. For example, Properties in Presidentially Declared Major Disaster Areas (PDMA) may qualify for extended appraisal validity (180 days to one year from the original appraisal's effective date) to reduce the burden of re-ordering appraisals.
Specific closing deadlines in FHA loan purchase agreements are not automatically suspended. They may be amended by agreement between the parties, but failure to meet or extend deadlines could result in a default of the purchase agreement.
For those who already closed their FHA mortgage before the disaster, remember that your mortgage payments are still due unless you have made prior arrangements with your participating FHA lender or are notified by the lender that payments should not be made.
What foreclosure moratoriums and loss mitigation options are available for FHA homeowners in a PDMDA?
If an FHA borrower risks losing their home due to a disaster, their lender must stop or delay foreclosure initiation for a period of 90 days. This moratorium applies to both new and ongoing foreclosures, primarily for borrowers who are delinquent.
During this period, lenders evaluate borrowers for forbearance plans and other loss mitigation assistance. FHA offers loss mitigation programs through its National Servicing Center.
Participating FHA lenders may offer forbearance relief to borrowers whose property or employment is within a PDMDA. Formal forbearances can extend for estimated repair times, provided arrearages do not exceed 12 months of PITI.
Borrowers receiving disaster-related forbearances may be offered a Rate and Term modification if the mortgage was current or less than 30 days past due at the time of the disaster declaration, employment is stable, and home damages have been repaired.
If disaster strikes before you close the deal on your FHA loan, contact your lender immediately to learn what the next steps are and how to take them. Do not assume your home loan process has ended even if the property was damaged in the incident.
Help Is Available
As soon as you become aware of a problem, contact your mortgage lender to discuss plans and explore loss mitigation assistance options. You may be put in touch with a HUD housing counselor or a HUD-approved agency for free foreclosure prevention counseling. Borrowers can find a counselor online or by calling 1-800-569-4287.
You can contact the FHA loan National Service Center at (877) 622-8525 or via email. Provide full names, property address, and FHA case number. You can also use the FHA Resource Center at 1-800-CALL FHA (800-225-5342), email [email protected], or use their online knowledge base.
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