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The series of storms, tornadoes and flooding that have hit Alabama have caused thousands of families to lose their homes and increased the number that face foreclosure due to the financial and employment consequences of these disasters. The Housing and Urban Development (HUD) has reacted by announcing disaster assistance to victims. On April 29, 2011, Shaun Donovan, Secretary of HUD, stated he would speed the processing of federal disaster assistance to people affected by the storms in Alabama. This relief will come in the form of foreclosure assistance, Mortgage Help and other forms of financial assistance to families in the area. This article will look at some of the avenues HUD is using to allocate resources where they are needed the most.
Families affected by the storms will receive an immediate 90-day respite from any foreclosure and broader forbearance on mortgages with the FHA under foreclosure. This will grant homeowners a chance to arrange their finances and save their home from foreclosure.
Victims of natural disasters will also receive 100 percent mortgage insurance on loans they apply for to rebuild their homes or buy a new one. Banks and other lenders can apply to the FHA for up to 100 percent insurance on the loan’s balance including closing costs. The purpose, of course, is to stimulate the investment of money in the disaster area and help homeowners with the daunting task of rebuilding their home or finding a new one.
Home Rehabilitation and Mortgages
HUD also provides victims with mortgage insurance so they can finance their mortgage and the rehabilitation of their damaged home with a single mortgage. Effectively, HUD is covering the lender’s risk so that banks and other lending institutions are willing to offer loans to families who would otherwise not qualify for credit.
Relocation of State and Federal Funds
HUD provides states with Development Block Grants and HOME programs which are used for a variety of purposes. Communities and institutions in Alabama have been authorized to redirect these funds to cover the cost of emergencies and critical needs. The same institutions have also been granted with special authority to expedite the allocating of funds to speed up the repair and replacement of damaged homes.
These are only some of the programs and aid resources available to victims of natural disasters. If you want to find out more about what programs you can apply for if you have been affected by the Alabama storms, tornadoes and flooding, click here. Programs you will find in this section include the Disaster Housing Assistance, the Reprogramming of Public Housing funds and Assistance from Ginnie Mae.
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