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l. Presidentially-Declared Major Disaster Areas (10/01/2025)
i. Disaster Declarations
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the President has authority to declare a major disaster for any area which has been affected by damage of sufficient severity and magnitude to warrant major disaster assistance. Disaster declarations and information regarding available federal assistance for each disaster incident are posted on the Federal Emergency Management Agency’s (FEMA) website.
When the President declares a major disaster, the Mortgagee must implement the procedures set forth in this section for each designated area that is eligible for federal disaster assistance, designated for public assistance, individual assistance, or both, unless otherwise specified.
ii. Moratorium on Foreclosures
(A) Standard
Mortgagees must attempt to contact Borrowers whose Property is located in a PDMDA to notify the Borrower that disaster loss mitigation assistance is available. If the first legal action has been completed or the Borrower has been referred to foreclosure, the Mortgagee must notify the Borrower that a foreclosure moratorium is in place for 90 Days beginning on the date of the disaster declaration for that area.
FHA-insured Mortgages secured by Properties located in a PDMDA will be subject to a moratorium on foreclosures following the disaster declaration. The foreclosure moratorium is:
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• effective for a 90-Day period beginning on the date of the disaster declaration for that area (HUD may communicate further specific guidance for extension of moratorium periods for individual disasters);
• applicable to the initiation of foreclosures and foreclosures already in process; and
• considered an additional period of time approved by HUD for the Mortgagee to take loss mitigation action or commence foreclosure.
HUD provides the Mortgagee an automatic 90-Day extension from the date of the moratorium expiration date to evaluate the Borrower under HUD’s Loss Mitigation for Borrowers in PDMDAs or commence or recommence foreclosure action. The Mortgagee may also submit a request for an additional extension to HUD’s foreclosure-related deadlines via HUD’s EVARS when prohibited from performing a required action due to the foreclosure moratorium.
(B) Required Documentation
The Mortgagee must retain in the Servicing File and the Claim File, if applicable, any approved extensions from HUD related to a foreclosure moratorium.
(C) Hazard or Flood Insurance Settlement
The Mortgagee must take no action to initiate or complete foreclosure proceedings, after expiration of a disaster-related foreclosure moratorium, if such action will jeopardize the full recovery of a hazard or flood insurance settlement.
iii. Monitoring of Repairs to Substantially Damaged Homes
(A) Definition
A building is considered to be “Substantially Damaged,” as defined in the National Flood Insurance Program (NFIP) regulations, when “damage of any origin is sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.”
(B) Standard
The Mortgagee must take appropriate actions to ensure that repairs to Substantially Damaged Properties comply with the federal building elevation standards, including those established by FEMA. The Mortgagee must ensure compliance with any higher applicable building elevation standard adopted by the state or local government.
iv. Loss Mitigation for Borrowers in PDMDAs
Mortgagees must attempt to contact Borrowers whose Property is located in a PDMDA to notify the Borrower that disaster loss mitigation assistance is available.
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If the Borrower is experiencing a Financial Hardship due to the disaster, the Mortgagee must offer loss mitigation assistance, where appropriate.
(A) Disaster Forbearance for Borrowers in PDMDAs
The Mortgagee may offer a Disaster Forbearance, which allows for one or more periods of reduced or suspended payments without specific terms of repayment, to a Borrower with a mortgaged Property or place of employment located within a PDMDA.
The Mortgagee must ensure the Disaster Forbearance meets the requirements for Forbearances except:
• the requirement that first legal action to initiate foreclosure has not been completed does not apply to Disaster Forbearances; and
• the Disaster Forbearance Time Frames apply.
The Mortgagee must waive late fees when the Borrower is on a Disaster Forbearance.
(B) Disaster Forbearance Time Frames
Maximum
Initial Disaster Forbearance
Additional
Disaster Forbearance
Borrower Characteristics Requirements
Disaster Forbearance
Period (for each PDMDA) Borrower has been in contact with Mortgagee
Period
Period
The Mortgage must offer the Borrower on a Disaster Forbearance if:
Up to 6 months
Up to 6 months
Up to 12 months
• the Property or Borrower’s place of employment is in a PDMDA;
• the Mortgagee has made contact with the Borrower;
• regardless of occupancy status; and
• regardless of previous delinquency.
Mortgagee has not established contact with the Borrower
The Mortgagee may place a Borrower on an initial 3 month Disaster Forbearance if:
Up to 3 months
Up to 9 months, only if Borrower contact has been established
Up to 12 months, only if Borrower contact has been established
• the Property is in a PDMDA;
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Maximum
Initial Disaster Forbearance
Additional
Disaster Forbearance
Borrower Characteristics Requirements
Disaster Forbearance
Period (for each PDMDA)
Period
Period
• the Mortgagee has been unable to contact the Borrower;
• the Mortgage was current or no more than 2 months Delinquent prior to the disaster event; and
• the Mortgage goes into Default in the 90 Days after the month the PDMDA was declared. Borrower on a Forbearance prior to the PDMDA
The Mortgagee must terminate the Borrower’s current Forbearance at the end of the month the PDMDA was declared and place the Borrower on an initial 6 month Disaster Forbearance starting the following month.
Up to 6 months
Up to 6 months
Up to 12 months
Borrower who requires additional time to complete substantial repairs to Property
The Mortgagee may provide extended additional Disaster Forbearances periods for Borrowers in PDMDAs while they are pursuing substantial home repairs related to the disaster, provided that:
Up to 6 months
Up to 18 months
Up to 24 months
• the Property was Substantially Damaged by the disaster;
• the Forbearance period does not exceed the estimated time needed to complete home repairs; and
• the total Forbearance period does not exceed 24 months.
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(C) Disaster Repayment Plan
For Borrowers in or impacted by a PDMDA, the Mortgagee must review the Borrower for a Repayment Plan.
(D) Permanent Home Retention Options
For Borrowers in or impacted by a PDMDA, the Mortgagee must review the Permanent Home Retention Options to offer the Borrower a Permanent Home Retention Option, including a TPP where required, with the following exceptions:
• The limit on receiving no more than one Permanent Home Retention Option within 24 months does not apply.
• The requirement that a minimum of four Mortgage Payments have been paid by the Borrower for a Permanent Home Retention Option does not apply.
• If the Property was Substantially Damaged, the Property repairs must be completed to a habitable condition.
• The Mortgagee must waive late fees when the Borrower is on a Disaster Forbearance.
The Borrower can only receive one Permanent Home Retention Option for each PDMDA.
The Mortgagee must ensure the Permanent Home Retention Option is reported with the appropriate Disaster Delinquency/Default Status (DDS) Code.
(E) Terms of the Mortgage are Unaffected
Nothing in this section confers any right to a Borrower to any loss mitigation or any other action by HUD or the Mortgagee. Further, nothing in this section interferes with any right of the Mortgagee to enforce its private contractual rights under the terms of the Mortgage. All private contractual rights and obligation remain unaffected by anything in this section. Where a Mortgagee chooses to enforce its contractual rights after expiration of any automatic foreclosure moratorium, the standard time frames to initiate foreclosure and reasonable diligence in prosecuting foreclosure following expiration of a foreclosure moratorium will apply.
(F) Home Disposition Options
Pre-Foreclosure Sale (PFS) or Deed-in-Lieu (DIL) of Foreclosure are also available to Borrowers with a mortgaged Property or place of employment located within a PDMDA, where the requirements for Home Disposition Options are met.
(G) Suspension of Reporting to Consumer Reporting Agencies
The Mortgagee must suspend reporting of delinquencies to consumer reporting agencies for a Borrower who is granted disaster-related Mortgage Payment relief and is otherwise performing as agreed.
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Mortgagees are required to comply with the credit reporting requirements of the Fair Credit Reporting Act (FCRA); however, FHA encourages Mortgagees to consider the impacts of a disaster on Borrowers’ financial situations and any flexibilities a Mortgagee may have under the FCRA when taking any negative credit reporting actions.