FHA Updates Policy for Hurricane Relief to Puerto Rico and U.S. Virgin Island Homeowners

On August, 16, 2018, FHA announced it is updating its foreclosure prevention option for borrowers in Puerto Rico and the U.S. Virgin Islands impacted by hurricanes Irma and Maria.  This will give borrowers with delinquent FHA-insured mortgages easier access to bring their mortgages current without an increase in their interest rates or monthly payments.  FHA is also providing a final 30-day extension of its foreclosure moratorium.

According to FHA, the FHA “Disaster Standalone Partial Claims” will now be the first mortgage relief option available for hurricane victims with FHA-insured mortgages.  This option provides borrowers with the opportunity to be evaluated immediately for a permanent loss mitigation solution that is affordable and sustainable.  It covers missed mortgage payments up to 30 percent of the unpaid principal balance through an interest free second loan on the mortgage, payable only when the borrowers sell the home or refinance the mortgage.  The Disaster Standalone Partial Claim permits borrowers to keep their existing interest rate and payment schedule, and also streamlines documentation and other requirements.  To qualify, borrowers must meet certain requirements and should contact their mortgage servicers for more information.

Lastly, FHA is providing a final 30-day extension of its foreclosure moratorium.  It has instructed FHA approved mortgage servicers to continue suspending all foreclosure actions against eligible FHA borrowers in the Presidentially Declared Major Disaster Areas until September 16, 2018.