What kind of mortgage can HUD provide to disaster victims?
A. HUD provides a mortgage insurance program to assist victims of Presidentially declared disasters, known commonly as Section 203(h). This program allows FHA to insure mortgages made by qualified lenders to individuals and families whose residences were destroyed or damaged to such an extent that reconstruction or repair is necessary and are eligible for 100% financing for the purchase of a home. However, closing costs and prepaid expenses not paid by the seller must be paid by the borrower in cash or through premium pricing (slightly higher than market interest rate).
