At The Legacy Group SC Real Estate, our hearts are breaking for the victims of Hurricane Helene. We have been constantly praying for all affected and are also seeking practical ways that we can be of service during this difficult time. Yesterday, we received this information from Jared Harless, one of our trusted lending partners at Apex Lending, and wanted to make this information available to the public as soon as possible. If you have been affected by Hurricane Helene and you have a specific need that we might be able to assist you with, please do not hesitate to contact us with your request at the form below. We will do everything in our power to help you find available resources for support.

FHA has two programs that are specifically designed for this situation in the aftermath of Hurricane Helene. The FHA 203(h) and FHA 203(k) programs can be excellent tools to help families recover from disasters. Below is a general overview of some of the guidelines and/or requirements may apply.

What is FHA 203(h)?

This is a specialty FHA loan program that provides up to 100% financing to help victims of disasters purchase new properties or rebuild after their homes have been substantially damaged.

Borrower Eligibility:

  • The mortgaged Property must be the Borrower’s Principal Residence. 
  • The FHA case number must be assigned within one year of the date the disaster 
    is declared
  • The borrower must have a minimum credit score of 580 to be eligible for 100% financing

Property Eligibility:

The previous residence (owned or rented) must have been located in a Presidentially declared major disaster area (PDMDA) and destroyed or damaged to such an extent that reconstruction or replacement is necessary.

To verify the Borrower’s residence was in a disaster area, we would use one of the following:

  • Drivers License
  • Utility Bill
  • Voter Registration Card

To verify the destruction of the residence we would verify one of the following:

  • Insurance Report
  • An inspection report by an independent fee inspector or government agency, or conclusive photographic evidence showing the destruction or damage.

The purchased or reconstructed Property must be a Single Family Property or a unit
in an FHA-Approved Condominium Project. Manufactured homes are ineligible.

FHA 203(h) + 203(k) Eligibility: Purchase & Refinance

The FHA 203(h) program is eligible for purchases and rate/term refinancing in conjunction with the FHA 203(k) program. FHA 203(k) is a renovation program that allows borrowers to finance the cost of renovations, repairs and rehabilitation. 

The Standard 203(k) program is designed for more extensive construction/rehab projects that require structural improvements to the property. Eligible repairs include but are not limited to:

  • Installation of new septic/well
  • Interior/exterior painting
  • Major landscaping that adds permanent value to the property and/or corrects any fire, health or safety issue.
  • Major structural alterations/additions (room/garage additions, finish attics/basements, repair of termite damage).
  • Repair/replace flooring, appliances.
  • Repair/replace roofing, gutters and downspouts.
  • Repair/replacement/upgrade of plumbing, heating, air conditioning and electrical systems.
  • Repairs to existing swimming pool.
  • Weatherization including storm windows/doors, insulation, weather stripping.
  • Well/septic repair/replacement work.
  • Must be completed prior to beginning other repairs.
  • Window and door replacement.

203(k) Standard General Parameters:

  • Repairs must be a minimum of $5,000
  • Requires a HUD Consultant who works directly with borrower and contractor

The Limited 203(k) program is designed for minor rehabilitation/renovation projects and allows a borrower to obtain a single loan to purchase a property or refinance an existing loan. The repairs or improvement can not be structural in nature.

203(k) Limited General Parameters:

  • Repairs are limited to $35,000
  • No minimum repair amount

Natural Disaster Limited Cash-Out Refinance

For those impacted by Hurricane Helene or any other natural disaster that has happened, there is a unique option for conventional financing. Natural Disaster Limited Cash-Out Refinances are for areas that have been impacted by a natural disaster. The disaster must have happened in the last two years and must have been designated for individual assistance by FEMA. The perk is if a borrower obtains or has subordinate financing that is NOT part of the purchase, and it is used towards the repairs due to a natural disaster then it can be considered a rate and term refinance.

For example, if they currently have a HELOC and they can document they are in an eligible disaster area and they use funds from the HELOC to complete disaster related repairs then they can refinance the entire HELOC as a rate and term vs. the usual cash-out.

OR, if they obtain a HELOC and do repairs then once ready they can refinance as a rate and term.

OR, if they can document out of pocket expenses they can be reimbursed within the loan amount up to the lesser of 10% of the new loan balance or $15,000. As an fyi, they cannot use their sweat equity (personal labor) as an out of pocket expense.

Keep in mind:

  • All documented expenses must post-date the disaster listed on the FEMA site
  • Appraisal or final inspection must document the repairs and that the work is completed
  • This is only for owner occupied properties only

Apex Lending will be providing a 1% lender credit on all home purchases or refinances using these programs to help make disaster relief more accessible to a wider range of families.

If you or anyone you know have any questions about these programs, Jared Harless will be more than happy to provide more details.

Jared Harless Owner, Mortgage Advisor NMLS #1959916 P 803-474-0374 I F 706-993-3607 | E [email protected]

Apex Lending I NMLS #2461201 1450 Greene Street, Suite 505 I Augusta, GA 30901 www.apex-lending.com

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