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Financial Services Law Insights and Observations

HUD announces Hurricane Ida disaster relief

Federal Issues HUD Disaster Relief Mortgages Consumer Finance FHA

Federal Issues

On September 1, HUD announced disaster assistance for certain Louisiana parishes impacted by Hurricane Ida, providing foreclosure relief and other assistance to affected homeowners. This followed President Biden’s major disaster declaration for the same parishes issued on August 29. Specifically, HUD is providing an automatic 90-day moratorium on foreclosures of FHA-insured home mortgages for covered properties and is making FHA insurance available to those victims whose homes were destroyed or severely damaged such that “reconstruction or replacement is necessary[.]” Additionally, HUD’s Section 203(k) loan program will allow individuals who have lost homes to finance the purchase of a house, or refinance an existing house and the costs of repair, through a single mortgage. The program will also allow homeowners with damaged property to finance the rehabilitation of existing single-family homes. Flexibility measures for state and local governments, public housing authorities, tribes, and tribally designated house entities are also discussed.

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