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FHA 203h and 203k Loans for disaster victims
203h Loans For Disaster Victims
If you are or have been a victim of a major disaster are and the President of the United States has declared it as a disaster area, you will be able to qualify for 203h loans which allow you to purchase a home with no money down via a FHA insured mortgage loan. 203h loans are for both purchase and refinance mortgage loan borrowers. On the purchase side, 203h loans applicants can be existing home owners who got their homes devastated by a natural disaster or it can be renters who have had their rental units destroyed.
203h Loans And Qualification Requirements
To qualify for 203h loans, the mortgage loan applicant needs to have their homes damaged by a natural disaster and their homes or rental unit needs to be listed as a major disaster area by the President and their county needs to be on FEMA’s list of major disaster declaration areas. They can qualify for a FHA insured mortgage loan with no money down and need to have had timely payment history prior to the actual natural disaster. Late payments after the disaster is allowed and is considered that they were victims of the natural major disaster. 203h loans need to be initiated anytime from the date of the major disaster declaration date to a year of that date. 203h loans mortgage application past the one year anniversary of the major disaster declaration date is null and void.
Mortgage Loan Borrower Qualification Requirements For 203h Loans
Depending on the 203h loans mortgage lender, there are minimum credit score requirements. As stated earlier, 203h loans mortgage lenders require that you have been timely on all of your monthly credit obligations prior to the major natural disaster for at least 12 prior months. Late payments after the major natural disaster is allowed and acceptable. Maximum front end ratios are 31% debt to income ratios and maximum back end debt to income ratios are capped at 43%. No gift funds are allowed with 203h loans. Gift funds will most not likely be necessary due to the 100% financing and sellers concessions towards a buyers closing costs is allowed like 203b loans and is capped at 6% maximum. Like 203b loans, any excess of sellers concessions need to go back to the seller and the borrower cannot accept any part of the sellers concessions.