FHA Issues Disaster Re-Inspection Waivers
Prompted by Hurricanes Harvey, Irma and Maria, and the California wildfires, the MBA has negotiated with HUD and FHA for shorter re-inspection periods for homes in a pending sale at the time of a natural disaster. According to MBA President and CEO David Stevens, “Because FEMA incident periods can run anywhere from a few weeks to a couple of months (and often get reopened or extended), many borrowers are needlessly delayed from completing transactions, even where there is no damage to the home.”
Rather than waiting until the end of the FEMA incident period to being re-inspections, the MBA has requested that re-inspections begin after the initial period start date. This would support Freddie Mac’s Harvey and Irma policy requiring lenders to “ re-inspect as soon as possible to the extent that it is feasible and the lender can mitigate enough risk.”
In late October, the FHA began issuing timeline waivers to that effect for properties in Puerto Rico and California, saying, “FHA believes that the situations in certain municipalities in Puerto Rico and certain counties in California have stabilized to the extent that further damage to the properties appear unlikely, despite FEMA not having closed its incident period.”
Waivers for properties affected by Hurricane Maria and the wildfires are available on the Department of Housing and Urban Development’s website.
Janus AMC is closely following FEMA incident periods and corresponding FHA policies. Check back here soon for more updates.