Disaster Victims Mortgage 203h
This is a mortgage loan insurance for victims of a major disaster (like Hurricane Katrina) who have lost their homes and are in the process of rebuilding or buying another home.
This program was set up to help the victims in a Presidentially designated disaster site. This type of loan is designed to help people recover by making it easier for them to obtain mortgages and become homeowners and or reestablish themselves as homeowners.
This mortgage may be used for the purchase or reconstruction of a 1 family home the will be the principal residence of the homeowners.
The features of the 203h loan product are; that it makes homeownership much easier. For example No down payment is required. The borrower is eligible for 100% financing. But your closing costs and prepaid expenses must be paid by the borrower in cash or through premium pricing by the seller; this is subject to a 6% limitation on sellers concessions. The lender will collect a upfront insurance premium; that can also be financed, at the time of purchase, as well as monthly premiums that are not financed but instead are added on to the regular mortgage payment.
The eligibility for the 203h are for persons that have lost their home or their home was severely damaged in a Presidentially declared disaster area if so they are eligible to apply for mortgage insurance under this program, even if they were Renting! But you must apply to a FHA Approved lender within 1year of the President’s declaration of the disaster.