What is the FHA 203(h)? 

This is a specialty FHA loan program that provides up to 100% financing to help victims of disasters purchase new properties or rebuild after their homes have been substantially damaged.  This program is available for Hurricane Ian victims and people affected by other qualifying natural disasters. Causes can include hurricanes, flooding, tornados, wildfires, severe winter storms, and mudslides, among others. 

FHA 203(h) Basics 

  • Purchase or Reconstruction of owner-occupied single family homes 
  • Up to 100% percent financing available 
  • Seller paid closing costs allowed up to 6% percent House Construction
  • Credit will be manually underwritten. Late payments may be ignored from the underwriting
    analysis if they take place after the date of the disaster and are found to have been caused by the displacement. 
  • Single Family Residence, Manufactured, FHA Approved Condos, PUDs 
  • Fixed Rates for 30 years or less 
  • Primary Residence Only 

FHA 203(h) Benefits 

  • Available for homeowners & renters 
  • Renters displaced by a disaster, such as Hurricane Ian, may be eligible to purchase a new home with 100% financing,
    and exempt from the 3.5% down payment requirement that comes with the standard FHA loan.
     People
  • Does not need to be used right away 
  • Eligibility for this program begins as soon as the US President declares the disaster, and remains for one year from that date of declaration 
  • Financing can be used to either rebuild a home that was destroyed, or to buy a new property 

Who is eligible for an FHA Disaster Victim Mortgage? 

To qualify for this program the borrower’s home must have been destroyed or severely damaged and be located within a presidentially declared disaster area. The previous home may have been owned or rented, and the damage must be extensive enough that it must be replaced, rather than simply repaired. 

It is still necessary for the borrower to be approved for the new loan, and to demonstrate that it will be affordable. Eligibility will be determined by examining the borrowers’ income, assets, liabilities, and credit history and score, as well as the market value and condition of the property to be financed. When rebuilding, the value taken into consideration will be the amount that the home will be worth in the current market once it is complete. 

Some of the additional requirements include: 

  • Borrower must intend to live in the home as a primary residence 
  • Loan amount must be within FHA county loan limits  
  • 580 minimum FICO score 

FHA 203(h) Purchase Home Loan 

This program can be used by first time home buyers or existing homeowners to purchase a new property with no money down. One of the few 100% purchase financing options available, this helps victims of disasters to become homeowners and have a safe place to live. 

FHA 203(h) Refinancing 

There is no traditional refinancing option, but existing homeowners can choose to rebuild a home that was destroyed on the lot they currently own.