FHA 203(h) Mortgage Program for Disaster Victims

The Federal Housing Administration’s Section 203(h) program helps victims in presidentially designated disaster areas who have lost their homes and are in the process of rebuilding or buying another home recover by making it easier for them to get mortgages. The program works by allowing the FHA to insure mortgages made by qualified lenders to disaster victims looking to become first-time homeowners or to re-establish themselves as homeowners.

These mortgages can be used to finance the purchase or reconstruction of a single-family home that will be the homeowner’s principal residence. No down payment is required, and the borrower is eligible for 100% financing. However, the FHA sets limits on the value of the mortgage to make sure that its programs focus on low and moderate income people who most need assistance. These figures vary, depending upon the cost of living and other factors, and the limits are higher for two to four family properties.

Next Steps

1. Check the current FHA mortgage limit online.
2. Apply through an FHA-approved lending institution. Visit the Department of Housing and Urban Development’s website for a searchable listing of approved lenders. Note: the application for mortgage insurance must be submitted to the lender within one year of the presidential disaster declaration.
3. For More Information, contact the FHA Resource Center.

Special Considerations

• FHA mortgage insurance is not free. Mortgages collect from the borrowers an up-front insurance premium (which may be financed) at the time of purchase, as well as monthly premiums that are not financed, but instead are added to the regular mortgage payment.
• Closing costs and prepaid expenses must be paid by the borrower in cash or paid through premium pricing or by the seller, subject to a 6 percent limitation on seller concessions.

Additional Resources