How to Buy A House After A Hurricane

There’s a special Government Program designed to help folks who were hit by Hurricane Florence and Hurricane Michael this fall.  This program, available in NC works for those who previously owned a home – and for those were renting, and can no longer go back to that residence because of damage. The FHA mortgage loan is designed to make it easy to buy a house after a Hurricane. This program does not require a down payment, and has easier credit score requirements.

Buy A House After A Hurricane – Stop Renting

We were just in Wilmington this past weekend, being from there – we waited, because I didn’t want to be part of the problem after Hurricane Florence.  Those folks have done a Yeoman’s Job clearing and cutting and piling all of the debris.  The Blue Roofs were heart breaking, but also realizing that there are thousands of homes, roof intact, that have mold growing inside. 

Many of these folks need to know how to buy a house after a Hurricane, because there are not enough rental units available… and with this new mortgage program called a FHA 203(h) you don’t have to buy in New Bern, or Leland – if you want to resettle in Raleigh or Charlotte (or the Mountains) you still qualify for the program.

“About a third of households in Craven County, where New Bern is the county seat, are considered cost-burdened by the North Carolina Housing Coalition. This means more than 30 percent of a family’s budget is committed to rent and utilities, and that’s because the average rent of a modest two-bedroom apartment in Craven County is nearly 20 percent higher than what the average renter here can afford, according to 2016 data collected by the coalition.”

The point is that Renting in Eastern North Carolina after the devastation from Hurricane Florence may just not be the best option.

How To Buy A House After A Hurricane

Applying for the 203(h) program to buy a house after a Hurricane in Eastern North Carolina is fairly simple.  Not all banks are offering the program, but we are doing this.

• You CAN buy with NO money needed for a down payment.
• You CAN BUY in any area, it does not have to be in a FEMA disaster area.
• The home that was destroyed must be in a FEMA declared disaster area within 1 year of the FHA case number assignment date. (* I’ll explain this)
• Maximum Loan Amounts vary per County and are subject to change at the end of each year.
• FHA is for Owner Occupied Properties only.
• Less stringent underwriting guidelines

Q:  Do You Have To Be A First Time Home Buyer to qualify?

A:  No.  Here are three different situations that will qualify for the program (look I’m sure there are more than this – so if you have a question about your situation, just leave me a comment below and I’ll answer everybody’s questions):

• You were renting a home and it was declared a loss – you started working again, and you want to buy in that area.  We can potentially do a 100% FHA Loan for you.  If you have not owned a home in the last 3 years, you will be considered a First Time Home Buyer, and you may qualify for a Mortgage Tax Credit that can save you up to $2000 a year!
  • Same situation, but you want to buy a house OUT OF THE AREA (I can absolutely understand this too)… As long as you’ve gotten yourself back to work, and you have started getting your credit back on track, you may also qualify for a 100% FHA Loan.
• You owned a House that is now declared a loss, and the Insurance Company or some other entity is going to keep the property.  We can exclude the payment for the destroyed home when we are helping you qualify for a new one.  We will need documentation that the Servicer is addressing your mortgage obligation and that the insurance is being applied to the damaged home.  You can buy another home, either in the same area – or you can locate to another area, and qualify for no down payment.
• You owned a house that after Hurricane Florence needs major renovations that are not covered by Insurance.  In this situation, you might qualify for 100% of the value (after repairs) for a FHA 203(k) renovation loan.  THIS IS A HARD, PAPER WORK LADEN Project.  Your Housing Payment can not be more than 3 months delinquent after the disaster event.  We may or may not be able to help you with it.  If you are basically tearing the house down and restarting – talk to us about the FHA Construction Loan.

When To Apply To Buy A House After A Hurricane

The FHA 203(h) mortgage program to buy a house after Hurricane Florence is available as long as you are under contract to buy a house, and are in process with your mortgage loan officer, within one year after the disaster declaration.

Many counties in NC were considered a disaster after Hurricane Florence on September 14, 2018 – so September 14, 2019 the paperwork has to come together to qualify for the program.

If you are building or purchasing a home, it doesn’t have to be closed by then, but you will need to be under contract, we have to send out disclosures to you, etc. so that we can be “in process” by that date.

Documentation Needed To Buy A Home Using the FHA 203(h) Program

Document and verify the Borrower’s previous residence was in the disaster area and damaged or destroyed to the extent of not being able to occupy such as:

• Insurance claim to show damage to primary residence (or rental unit) / OR
• Documentation from city or county showing the home is not habitable / OR
• Appraisal to determine extent of damage to the home

The Underwriting of this loan will allow a lower credit score, understanding that folks will likely hit an unavoidable “rough spot” due to the disaster.  Don’t let lower credit scores keep you from trying to buy a house after a Hurricane.  If you had pretty good credit going into the Hurricane, you’ve gotten back to work, and you are getting everything back together… call us!  919 649 5058, we want to help you get ready to buy a house.  It might take us a couple of months to work on your credit scores, but we have a year to work it out 🙂

Again, the FHA 203 (h) home loan is designed to make it easy to buy a house after a Hurricane, or any other natural disaster we might have in NC.  Not all banks offer this program.   For more information on buying a home when your home was destroyed at Atlantic Beach NC, or on using a rehab to fix your home, please call Steve and Eleanor Thorne 919 649 5058.