Section 203h Mortgage Insurance for Disaster Victims

The section 203h mortgage insurance loan has been designed by the FHA to assist the victims of a President declared disaster area to reconstruct or purchase their home.
The section 203h mortgage insurance program allows the federal government to help the victims of a President declared designated disaster area. The 203h insurance program helps people in these areas to recover by making it easier for them to get easy mortgages to re-establish themselves by becoming homeowners. This housing loans program protects private lenders by mortgaging insurance against default risk on mortgages to those who are qualified disaster victims. These government loans are provided particularly to those who are staying in an area, which has been declared by the President as a disaster area.
The section 203h mortgage insurance program provides assistance to individuals whose homes have been destroyed by a disaster to such an extent that replacement or reconstruction is necessary. These government loans, which provide insured mortgages, are used to finance reconstruction Advances Against Various Securities or purchase of a family home that would be designated as the purchaser’s principal residence. It is similar to FHA insurance mortgage that resembles section 203b. The mortgage insurance section 203h offers features that ensure easier and faster disaster recovery for house owners.
The features of this housing loans program are the following:
Down payment- Down payment is not required. The disaster victim is eligible to get 100 percent mortgage financing. Prepaid expenses and closing costs must Finance For Beginners Books be paid by the loan borrower by paying through premium or cash or by the seller, which is subject to a limitation of 6 percent on seller concessions.
Insurance premium-The insurance mortgage from FHA is not free. The mortgage amount that is collected from the borrower is in the form of an up-front premium for insurance right at the time of purchase, which can be financed or it can be in the form of monthly premiums. When they are not financed, these are added to regular payment of mortgage.
Fees and insured amount limits-The fees that the lender’s charge for providing the disaster victim with housing loans is regulated by the FHA under the section 203h mortgage insurance program. The HUD imposes limits on the insured amount. This is done by the FHA to ensure that the section 203h mortgage insurance program serves well to the moderate and the low-income segment.
The eligible section 203h mortgage-insurance program loan providers are the mortgage companies, banks and other loan agencies. Any customer whose house has been damaged severely in a President declared disaster area is eligible for this housing loans program. You can find further information about the loan and application procedures on the Government Loans website.

READ  After Bankruptcy, Bad Credit Auto Financing, Making the Right Choice Could Save You