Thursday, May 12, 2011

100% Financing for Victims of Storms in Alabama

While many are suffering a great loss, there is a glimmer of hope with FHA 203(h) financing.  If this program could benefit you, please call Valerie Springer Home Mortgage Specialist, Birmingham, AL 205-995-7283x305.  This is offered to all considered in Federal Disaster area including Tuscaloosa AL, Pleasant Grove, AL, Hackleburg, AL, etc.

  1. Section 203(h) Mortgage Insurance for Disaster Victims


FHA provides insurance to assist victims of presidential declared disasters. Individuals or families whose residences have been destroyed or damaged to such an extent that reconstruction or repairs are necessary are eligible for 100% financing for the purchase of a home.

  1. Requirements


    • The Borrower's previous residence must be located in the disaster area and destroyed or damaged to such an extent that reconstruction or replacement is necessary. The Borrower may be the owner of the property or the tenant of the damaged property who now desires to purchase a property. If the Borrower was a tenant, he or she should be shown on the rental agreement of the property that was destroyed or damaged

    • Documentation showing a permanent residence in the affected area prior to the disaster includes a valid driver's license, a voter registration card, utility bills, etc.

    • Documentation regarding destruction of the residence may include an insurance report, an inspection report by an independent fee inspector or government agency, or conclusive photos showing destruction or damage

    • Eligible for 100% financing not including closing costs, based on 100% of the sales price

    • Closing costs and prepaid expenses must be paid by the borrower in cash, paid through premium pricing, or paid by the seller subject to the 6% limitation on seller concessions

    • Must meet standard credit qualifications

    • Up-Front MIP and Monthly/Annual MIP apply. The Up-Front MIP premium may be financed into the mortgage. The Monthly/Annual premium is paid by the borrower as part of the monthly mortgage payment

    • The Borrower must purchase a single-family detached home or an FHA Approved (or FHA Spot Approvable) condominium unit

    • Maximum debt–to-income ratio is 43% without compensating factors and can be exceeded with appropriate compensating factors

    • Maximum mortgage limits/amounts are the same for Section 203(h) as for Section 203(b)

    • The application date must be within one year of the President's declaration of the disaster

    • Section 203(h) is used in conjunction with Section 203(b), 251, etc. (i.e., 203(b)/203(h)/251)

    • Disaster victims with Secretary-Held mortgages (low balance mortgages previously assigned to HUD due to payment default) are eligible for new FHA-insured mortgages provided the borrower was current with their forbearance agreement at the time of the disaster and all payments for the preceding 12 months were made within the month due

    • The mortgage amount may be rounded down to the nearest $1.00


  2. Underwriting and Closing Instructions


    • May be underwritten on a Direct Endorsement basis and do not require HUD prior-approval

    • Must be submitted for endorsement within 90 days of closing

    • Correspondent Funding does not participate in the FHA construction/permanent program


  3. Insuring Delinquent Loans


    • The FHA Home Ownership Center (HOC) having jurisdiction over affected areas have been granted authority on a case-by-case basis to endorse mortgages which are delinquent provided the delinquency is due to disaster related circumstance.   


  4. If you wish to apply online go to www.vshomeloans.com and fill out an application.  Someone will contact you within 24 hours.  FEMA


Yours to Count On,

Valerie Springer