FHA INFO #18-42: FHA Disaster-Related Policy Waiver Issued in the Presidentially-Declared Major Disaster Area of Lake and Shasta Counties Due to the California Wildfires and High Winds Declaration
Today, the Federal Housing Administration (FHA) issued a waiver of its policy on the timeframe for completing the inspection of properties prior to closing or submitting the mortgage for FHA insurance endorsement in the August 4, 2018, Presidentially-Declared Major Disaster Area (PDMDA) due to the California Wildfires and High Winds declaration (DR-4382) in Lake and Shasta Counties.
- For mortgages in process secured by properties in a PDMDA that have not closed or are pending endorsement, mortgagees must follow the guidance contained in the Single Family Housing Policy Handbook 4000.1 (SF Handbook) Section II.A.7.c, Inspection and Repair Escrow Requirements for Mortgages Pending Closing or Endorsement in Presidentially-Declared Major Disaster Areas. FHA’s current policy requires that a damage inspection be performed following the close of the Incident Period as defined by the Federal Emergency Management Agency (FEMA).
- FHA believes that wildfires, and the high winds that fanned them, in Lake and Shasta Counties have stabilized to the extent that further damage to the properties appear unlikely, despite FEMA not having closed its Incident Period for the PDMDAs in these areas. However, mortgagees should continue to monitor FEMA’s website to ascertain the latest information on this PDMDA, as additional areas could be added until the Incident Period has closed.
- As a result, today, FHA issued a waiver for properties in Lake and Shasta Counties, CA, regarding the timing of the required inspection, allowing damage inspections to be completed beginning October 2, 2018, for properties located in the PDMDA.
- This waiver does not affect mortgagees’ obligations to exercise prudent lending practices and ensure that mortgages they submit for endorsement fully comply with FHA’s property eligibility requirements, as well as any property condition requirements related to claims processing.
Mortgagees can find more information about FHA’s PDMDA policies, as well as the 203(h) Mortgage Insurance for Disaster Victims Program and the 203(k) Rehabilitation Mortgage Insurance Program, on the FHA Resource Center’s Online Knowledge Base.
- The California Wildfires and High Winds waiver can be viewed at: https://www.hud.gov/program_offices/administration/hudclips/waivers/
Access the SF Handbook in online or portable document format from HUD’s Client Information Policy Systems Handbooks web page at: https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh
View the status of Incident Periods on the FEMA Disasters web page at: https://www.fema.gov/disasters
Contact the FHA Resource Center:
- Visit our online knowledge base to obtain answers to frequently asked questions 24/7 atwww.hud.gov/answers.
- E-mail the FHA Resource Center email@example.com. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
- Call 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.