On October 22, 2024, HUD’s Office of Housing Counseling sent out the following information:


1.  203(k) Limited Temporary Waiver Hurricane/Tropical Storm Helene and Hurricane Milton

FHA has posted a temporary waiver of its 203(k) Rehabilitation Mortgage Insurance Program requirement that states, when a repair is considered “major,” it becomes ineligible to be financed as part of the 203(k) Limited program, if the repairs prevent the borrower from occupying the property for more than 15 days.

As result of the Presidentially declared Major Disaster Areas (PDMDAs) related to Hurricane/Tropical Storm Helene and Hurricane Milton, many properties were severely impacted or destroyed and are now in serious need of rehabilitation and/or repair. FHA believes a temporary waiver of its definition of “major repair” related to the 15 days (or 30 days after November 04, 2024) needed for repair completion is crucial to ensure homeowners in this PDMDA can rebuild their properties.

This temporary waiver applies to FHA-insured Limited 203(k) mortgages closed on or before August 31, 2025. While this temporary policy waives the 15-day occupancy requirement for this PDMDA, the requirement that at least one borrower resides in the property within 60 days remains the same. For more information, view the published policy in the Single Family Housing Policy Handbook 4000.1, II.A.1.b.iii (A) for Principal Residences.

This temporary waiver is effective through August 31, 2025. The extended waiver period accounts for any construction delays possibly due to the continued hurricane season as well as the upcoming winter season.

 

2.  Temporary Waiver of 14-day Damage Inspection Report Requirement in Overlapping Presidentially Declared Major Disaster Areas

FHA has issued a temporary waiver of its policy requiring damage inspection reports for properties in Presidentially-declared Major Disaster Areas (PDMDAs) that must be completed after the closure date of an incident period as determined by the Federal Emergency Management Agency (FEMA), or at least 14-days from the start of the incident period, whichever is earlier. This temporary waiver of a second 14-day incident period applies specifically to inspection reports associated with the Hurricane Milton PDMDA (DR-4834-FL), as declared on October 11, 2024.

Due to Hurricane/Tropical Storm Helene and Hurricane Milton, both of which severely impacted similar regions within a 14-day period, FHA’s current policy of requiring a separate 14-day waiting period for damage inspections and reports following each event has created the potential for extensive repair/rehabilitation delays for homebuyers and sellers.

FHA believes that the presence of FEMA in areas already included in the multiple Hurricane/Tropical Storm Helene PDMDAs provides enough stability and risk mitigation to eliminate the requirement for a second 14-day waiting period for inspection and damage reports associated with the Hurricane Milton PDMDA. While this policy waves the 14-day waiting period to conduct the damage inspection report, the requirement to conduct a damage inspection report, and other inspection and repair escrow requirements, for all properties with pending mortgages or endorsements in the PDMDAs remain the same.

In summary, this temporary waiver:

  • applies only to properties located within the overlapping PDMDAs;
  • waives the 14-day waiting period to conduct the damage inspection report;
  • does not waive the damage inspection report or inspection and repair escrow requirements;
  • is not applicable to properties located in areas included in the Florida Hurricane Milton PDMDA, unless the properties were also included in a PDMDA associated with Hurricane/Tropical Storm Helene.
  • This waiver of Single Family Housing Policy Handbook 4000.1, policy sections II.A.7.c, II.B.6.a.xiii, and II.B.7.c. is effective immediately.

Please review both waivers. Please email questions to: housing.counseling@hud.gov