Scott Turner, the secretary of the U.S. Department of Housing and Urban Development (HUD), announced on Tuesday a 90-day foreclosure moratorium for Federal Housing Administration (FHA)-insured single-family mortgages in the areas of Kerr County, Texas, that have been devastated by recent severe storms, including wind and flood damage.
The 90-day moratorium prohibits mortgage servicers from initiating or completing foreclosure actions on FHA-insured single-family forward mortgages or the Home Equity Conversion Mortgage (HECM) reverse program in the Kerr County Presidentially Declared Major Disaster Area (PDMDA).
“Our hearts break as we witness the catastrophe unfolding in Texas,” Turner said in a statement. “The flash floods have claimed the lives of more than 100 Americans and displaced countless others. It is an unfathomable tragedy, and HUD will continue to provide resources and support as we pray for the Texas Hill Country community.”
There are more than 900 FHA-insured mortgages in the Kerr County PDMDA, according to a press release from HUD.
The department said it is working with mortgage servicers and other parties to assess the extent of the damage and destruction to properties with FHA-insured mortgages in the designated area.
The moratorium went into effect July 6, when President Donald Trump signed the disaster declaration.
HUD is instructing borrowers who are unable to make their mortgage payments to contact their servicer or the FHA Resource Center for assistance. The agency also directed borrowers and renters who need immediate housing and disaster recovery assistance to connect with a HUD-certified housing counselor.
For borrowers whose homes are destroyed or damaged to an extent that requires reconstruction or complete replacement, HUD is directing them to contact an FHA-approved lender about the Section 203(h) loan program. It provides 100% financing for eligible homeowners to rebuild their home or purchase a new one.
For borrowers wanting to purchase and/or repair a home that’s been damaged, HUD’s announcement says to contact an FHA-approved lender about the Section 203(k) loan program. This allows for the purchase or refinance of a house, as well as the costs of repair or renovation, through a single mortgage.