After the Storm
Each year our country gets hit by storms and occasionally we get hit by storms which are capable of causing serious damage and you will need to claim on your home owners insurance.
This has been one of those years, with Hurricane Irma causing damage from the tip of Florida to the far reaches of the northeastern USA and Hurricane Harvey attempting to drown Houston, most of Texas as well as many other neighboring states. Prior to this in the spring, tornados ripped across the Midwest.
No matter where you live you can talk about wildfires or crippling snow storms and other major weather events.
Most people have homeowner’s insurance, however many of them find that their coverage falls short. It often lacks the proper coverage required or comes with high deductibles. No matter what your situation or status is, there may be a mortgage loan program out there the maybe able to help you recover sooner rather than later.
Fannie Mae and Freddie Mac both have renovation programs for most situations a homeowner may face after the storm has passed. Both buyers and borrowers looking to refinance to help rehab a damaged home should talk to a loan originator about the different loan programs offered such as the Freddie Mac Home Possible and Fannie Mae’s Homestyle mortgage loan programs.
Borrowers may seek other possibilities such as HUD’s FHA 203K or 203H programs.
The 203k program is the FHA’s standard renovation loan program from HUD “The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit for the area.
The value of the property is determined by either
(1) the value of the property before rehabilitation plus the cost of rehabilitation, or
(2) 110 percent of the appraised value of the property after rehabilitation, whichever is less” (taken from HUD.GOV)
This is a good loan program for those primary home owners who do not have the resources to meet their deductibles within their homeowner’s insurance after the storm has passed.
HUD/FHA does have another special loan program to help storm disaster victims.
The FHA 203H loan program is for those people who have lost their homes or their homes were so severally hit that it would be habitable for months. This 203H loan program is for areas ‘declared by the President of the United States of America’. If a person(s) living in a home whether renting or owning has suffered severe damage as described above, they may be eligible for this loan program to purchase a new home or renovate their current home if they are the owner with 100% loan to value financing on the appraised finished value.
Finding the best loan product for your situation shouldn’t be a difficult thing. Ask questions, get written facts, seek to get pre-qualified, get all your facts and we will see you at a happy closing table.