HUD No. 08-130
September 2, 2008
HUD READIES DISASTER ASSISTANCE FOR GULF HURRICANE VICTIMS
Foreclosure protection to be offered to displaced families
WASHINGTON - U.S. Housing and Urban Development Secretary Steve Preston today announced HUD is ready to speed federal disaster assistance to hurricane-ravaged counties throughout the Gulf Coast and provide support to homeowners and low-income renters forced from their homes following Hurricane Gustav. This assistance includes foreclosure relief for families whose damaged homes are insured through the Federal Housing Administration (FHA) living in presidentially declared disaster areas.
A presidential disaster declaration triggers a variety of federal assistance including grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster.
"HUD is ready to support families in getting back on their feet as quickly as possible," said Preston. "One way we can do that is call a time-out on foreclosures in these disaster areas and call on the rest of the mortgage lending community to follow suit. Families need a little breathing room to take stock of their losses as they begin the process of putting their lives back together."
In certain storm and flooded ravaged counties, HUD will grant a 90-day moratorium on foreclosures of mortgages insured by the Federal Housing Administration (FHA). In addition, HUD is strongly recommending that loan servicers take such actions as special forbearance, loan modification, refinancing, and waiver of late charges.
As President Bush declares certain counties disaster areas, HUD will:
- Offer states the ability to re-allocate existing federal resources toward disaster relief - HUD's Community Development Block Grant (CDBG) and HOME programs give the State the flexibility to redirect millions of dollars to address critical needs, including housing and services for tornado victims. HUD will contact State and local officials to explore their needs for streamlining the Department's CDBG and HOME programs in order to expedite the repair and replacement of damaged housing;
- Make mortgage insurance available - HUD's Section 203(h) program provides FHA insurance to disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. Borrowers are eligible for 100 percent financing, including closing costs;
- Make insurance available for both mortgages and home rehabilitation - HUD's Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home; and
- Offer Section 108 loan guarantee assistance - HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.
As families return to their neighborhoods in the wake of Hurricane Gustav, HUD staff will be ready to help offer critical housing information through HUD's National Housing Locator System (NHLS). This web-based locator combines vacant sales and rental housing data from federal housing resources and three widely used commercial apartment locators. Currently, there are more than 69,000 homes and apartments available in Louisiana, Texas, Mississippi, Alabama, Georgia and Florida.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.