The FHA 203(h) Program

Written By: Glenn Michaels, Op-Ed Writer

The natural disaster can hit anywhere and anytime somewhere in the United States. No state is immune from a disaster. If a disaster does happen and the President of the United States declares an area “Presidential Declared Federal Disaster Area” all kinds of federal programs come into play.

One program under the United States Department of Housing Development (HUD) is called the 203(h) program. This is designed for the replacement of or purchase of a home that was significantly damaged by the natural disaster. This program is open for individuals who currently own a home or currently are renters in a home that was significantly damaged by the natural disaster.

HUD and their approved FHA lenders are able to lend up to 100% of the property value for borrowers that had their residence significantly destroyed. The funds received from the lenders and insured by FHA can lend up to 100% of the property value for properties situated in a Presidentially Declared Federal Disaster Area. 

The borrowers must qualify for a FHA loan only they are exempt from putting a down payment of 3 ½ percent. 

This program is designed by HUD to stabilize the area that was impacted by the declared natural disaster.

Recently, where I reside, was declared a “Presidential Federal Disaster Area” at the conclusion of Super Storm Sandy (Hurricane Sandy). A number of my neighbors and neighboring communities were able to obtain FHA 203(h) financing.

There are numerous other federal and state programs that become available for individuals residing in areas declared a Presidential Federal Disaster Area. The one agency that no one ever thinks of is under the United States Department of the Treasury’s Internal Revenue Service (IRS).

The IRS allows all tax payers that reside in Presidentially Declared Federal Disaster Area to amend their prior year tax return to receive funds from the IRS to assist in the repair of the home. A tax payer can use the appropriate tax form to declare “theft and casualty” losses to get the funds from the IRS quicker. In addition whatever funds that were not returned on the prior tax return can be declared on the current IRS tax year.

The American Red Cross was mobilized and assisted so many people including myself and my family members after Super Storm Sandy. The American Red Cross made various staging area where victims of the storm were able to obtain the necessities of life from them. Bottled water, coats, a warm place to sleep and the list goes on.

The Federal Emergency Management Agency (FEMA) assisted almost everyone in the area.
Homeowners that had federal flood insurance policies and people who did not have federal flood insurance policies received non-repayable grants to fix up their homes. Recently it was learned that a number of FEMA claims under the flood insurance program are being reopened (143,000) due to alleged fraud in the program.

If you live in an area impacted by a Presidentially Declared Federal Disaster Area there are numerous federal and state programs that swing into action if you know where and what to do. The problem is the lack of information given out to the residents where to obtain help.

About The Author

Glenn Michaels - As an op-ed writer, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter ( As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. 

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