Due to the devastating flooding in parts of Tennessee two weeks ago, the Federal Housing Administration (FHA) has stepped in to lend a hand to disaster victims who were impacted by the flooding and those who lost their homes. Because the FHA realizes that, due to the natural disaster, homeowners may now have difficulty making their monthly mortgage payments, the FHA has ordered FHA lenders to put a 90-day freeze on any home foreclosure proceedings in order to give homeowners time to get back on their feet.
FHA Provides Monetary Assistance to Flood Victims
In addition to freezing home foreclosures, the FHA will also provide money to different areas throughout Tennessee that were affected by the disaster. The Department of Housing and Urban Development's Community and Development Block has provided a grant of $29 million to the state of Tennessee, with $17 million allotted to rebuild homes destroyed by the flood and $9 million specifically allocated for Nashville, one of the worst areas hit by the disaster. Overall, 42 different counties in Tennessee were affected by the flooding, and 18,000 Tennessee residents have requested federal aid from the government. All residents in need of assistance have been encouraged by the FHA to contact FEMA.
Tennessee Residents Encouraged to Apply for FHA 203k Loans
FHA 203k loans are loans that allow homeowners to make home renovations or necessary repairs to their homes by financing the costs into a loan. So, borrowers are able to finance both their homes and the repairs through one loan. This type of financing can also be used in situations when an unforeseen disaster occurs, damaging the home and thus requiring significant home repairs. The FHA is encouraging residents in Tennessee to take advantage of FHA 203k loans to help them rebuild their homes. Homeowners are eligible to use this loan to repair the damage to their homes as long as the original foundation of the home is still in place.
The FHA 203k loan can be used to purchase homes that need additional work before the borrower moves in or to refinance a home that is in need of repairs or renovations. To use this type of financing, the total costs of the home repairs or home improvements must be at least $5000, and the home being financed must be at least one year old. Anyone can be eligible for this loan as long as he or she is able to make their monthly mortgage payments and meet minimum credit requirements. A licensed, HUD-approved contractor must be used to complete the repairs, and the home will have to meet certain energy-efficient standards and structural standards regarding the home's safety. For those who need less extensive repairs, there is also an FHA 203k Streamline loan available.
Homeowners who are able to use the FHA 203k loan to repair their homes can worry less about the costs of the repairs and focus more on getting them done quickly so that their lives can return to normal. And the 90-day freeze on foreclosures will be a great relief to homeowners who may have already been struggling prior to the flood disaster. With the assistance from the FHA and FEMA, Tennessee residents will hopefully be able to quickly rebuild the areas affected by the flooding. To learn more about how to take advantage of this type of financing, homeowners can speak with a home loan specialist to learn more about the loan requirements and if they qualify.
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