Help after a natural disaster
Disasters can have a significant impact on your home and your finances. Taking these steps can help you get back on your feet.
If you’ve been impacted by a disaster — even if you live and work outside of an eligible FEMA disaster area — call your mortgage servicer for help right away.
3 Steps to Help You Recover from a Disaster
In the immediate aftermath of a disaster, your top priority should be to ensure your family’s safety. Once you and your loved ones are safe and accounted for, you can begin to assess the damage and start thinking about how to move forward.
Contact Your Insurer
If your home has been affected by a disaster, one of your first calls should be to your homeowners insurer. Your insurer will help you assess the condition of your property and reimburse the costs to repair or replace any damages.
The insurance company may send an adjuster to investigate your claim and determine how much they will pay. You may consider having a contractor assess the damage and develop a repair plan, but avoid making any costly repairs until the insurance adjuster confirms what will be reimbursed by the insurance company.
Many insurance policies also include additional living expenses insurance, which covers the cost of temporary housing, food, pet boarding and other household expenses if you and your family are displaced. When you speak with your insurer, ask questions to gather as much information as possible about your policy’s coverage.
Making an Insurance Claim Following a Natural Disaster
Learn more about what to expect as you work with your insurance provider to assess damage and make repairs.
Learn More about Insurance Claim Following a Natural Disaster
Contact Your Mortgage Servicer
It is critical to contact your mortgage servicer as soon as possible to let them know about your current circumstances. Your mortgage servicer is the company you make your monthly mortgage payments to, and their contact information should be listed on your monthly mortgage statement.
Your servicer can help you understand the mortgage relief options available to you.
Freddie Mac’s Disaster Policy
If your loan is owned by Freddie Mac, you become eligible for Freddie Mac’s disaster relief options when your ability to pay your mortgage is affected because:
- Your home is located in a FEMA-declared disaster area eligible for individual assistance.
- Your place of employment is located in a FEMA-declared disaster area eligible for individual assistance.
- Your home has experienced an insured loss.
To be eligible for assistance, you also must be current with your mortgage payments, or not more than one payment behind, when the disaster occurred.
Forbearance
Forbearance is an agreement between you and your loan servicer that either pauses or reduces your monthly mortgage payments for a limited time. You don’t accrue late charges during forbearance. This gives you time to make necessary repairs or for your place of employment to recover from a disaster.
The initial forbearance plan following a natural disaster has a duration of one to six months. You can work with your mortgage servicer to extend forbearance beyond the initial period, if necessary. However, the total forbearance cannot be extended beyond a date that would cause you to be more than 12 months behind on your mortgage payments.
Reinstatement or Repayment Plan
When you are able to resume making mortgage payments, you have options for bringing your mortgage current.
- Full reinstatement: Pay the total mortgage payments you owe as one lump sum, including taxes and insurance premiums paid, delinquent interest, any legal costs and other expenses incurred by the loan servicer. A full reinstatement makes your mortgage current.
- Partial reinstatement: Pay part of the mortgage payments you missed as a lump sum. Your loan servicer will work with you to create a repayment plan to pay off the remainder of what you owe.
- Repayment plan: Increase your regular monthly mortgage payment for a short period to make up the mortgage payments you missed.
Disaster Payment Deferral
If your hardship has been resolved but you are not able to repay the mortgage payments you missed as a lump sum or through increasing your monthly mortgage payment, you may be considered for a disaster payment deferral.
A payment deferral moves your missed mortgage payments to the end of your loan term, and your monthly principal and interest payment stays the same. However, your total monthly payment might change if your escrow amount (for taxes and insurance) is adjusted.
Your loan is not extended, and the deferred amount does not accrue interest and must be paid when you pay off your loan. You may have a maximum of 12 monthly payments deferred as part of a disaster payment deferral.
Loan Modification
You and your loan servicer can agree in writing to modify or restructure your mortgage to make it more affordable.
A loan modification typically reduces the monthly payment amount by changing the terms of the mortgage, such as extending the number of years you have to repay the loan or lowering the interest rate.
Contact your mortgage servicer directly for terms and conditions for a loan modification.
Know Your Options for Repayment
Plan ahead for when your normal mortgage payments resume. Your servicer will be in touch within 30 days of the end of your forbearance period to help you explore repayment options. Options vary depending on your circumstances, but they may include a payment deferral, repayment plan, partial or full reinstatement, loan modification, or refinancing.
Keep an open line of communication with your mortgage servicer to make it easier to navigate your options and better understand what is available to you.
Work with a Housing Counselor
Certified housing counselors are available to help you navigate financial or housing-related challenges following a disaster.
