FHA 203(h) in one paragraph
FHA Section 203(h) is HUD's Mortgage Insurance for Disaster Victims program. If your primary residence was in a Presidentially-Declared Major Disaster Area and was destroyed or damaged to the extent that it must be rebuilt or replaced, 203(h) may help you buy a replacement home or reconstruct — whether you owned or rented. You generally must apply within one year of the declaration. FHA underwriting, mortgage insurance, and county loan limits still apply. Official details are on HUD's Section 203(h) page.
Questions by topic
Eligibility
Owners vs. renters, how much damage counts, and moving elsewhere. More in 203(h) requirements.
Financing & credit
Closing costs, mortgage insurance, credit hit by the disaster, and insurance proceeds.
Properties & rebuilding
New construction, condos, manufactured homes, and combining 203(h) with 203(k).
Deadlines & declarations
The one-year window and which declaration types count. See current disaster areas.
Real estate agents will find their questions at the end, and more on resources for Realtors.
203(h) is time-sensitive. Tell Matthew your county and what happened to your home — he'll help you check eligibility and next steps.
Talk with MatthewHow to use these answers
These answers describe how the program generally works. HUD guidance changes, disaster declarations are updated, and lenders can add their own requirements. Before you sign a lease, a purchase contract, or a construction agreement, have the details confirmed for your situation — Matthew will confirm the current rules for your file.
Frequently asked questions
What is FHA 203(h)?
Section 203(h) is HUD's Mortgage Insurance for Disaster Victims program. It helps people whose primary residence was destroyed or badly damaged in a Presidentially-Declared Major Disaster Area buy a replacement home or rebuild. See how FHA 203(h) works.
Can renters use 203(h), or only homeowners?
Both. HUD's consumer guidance says the program is available whether you owned or rented, as long as the home was your primary residence and it was destroyed or damaged to the extent it must be replaced.
Does my home have to be totally destroyed?
No, but it must have been damaged to the extent that reconstruction or replacement is necessary. Cosmetic or easily repaired damage generally doesn't qualify. Insurance reports, inspection findings, and government damage records help document the extent.
Is 203(h) only for first-time buyers?
No. First-time buyer status isn't required. Former homeowners and renters may both be eligible.
Can I buy in a different county or state?
Generally, yes. The replacement home doesn't have to be in the disaster area. It must be your primary residence and meet FHA property guidelines, and Matthew must be licensed where the new home is located.
Can I keep the damaged property or lot?
Possibly — Matthew will confirm how HUD and the lender treat the prior property.
What if I already have an FHA loan on the damaged home?
HUD rules on holding more than one FHA loan have limited exceptions; Matthew will confirm whether one applies. In the meantime, talk to your current servicer about relief on the existing loan.
Do I need a down payment?
FHA 203(h) loans don't require the normal 3.5% minimum down payment that standard FHA 203(b) mortgages require — eligible disaster victims can finance up to 100% of the purchase price. Approval is subject to FHA, lender, property and disaster eligibility, and closing costs and prepaids still need to be covered.
Is a 203(h) a no-down-payment mortgage?
For eligible disaster victims, yes — 203(h) works as a no down payment mortgage, sometimes called a 100% financing or 0% down mortgage. Eligibility still depends on the disaster declaration, FHA and lender guidelines, and the property, and closing costs and prepaids still need to be covered.
How are closing costs covered?
Even with no down payment required for eligible borrowers, closing costs and prepaids still have to be covered. Depending on your file, closing costs and prepaids may come from your own funds, seller contributions within FHA limits, lender credits, or gifts and grants where allowed. Matthew will show you the options on your Loan Estimate.
Is there FHA mortgage insurance on a 203(h) loan?
Yes. FHA mortgage insurance applies, including an upfront premium and an annual premium. FHA county loan limits also apply.
My credit took a hit because of the disaster. Can I still qualify?
Possibly. FHA underwriting still applies, but HUD guidance has historically allowed lenders to consider credit problems caused by the disaster. Documentation of what happened, and when, is important. Matthew can review your credit with you.
How do insurance proceeds fit in?
Insurance payouts may pay off an existing mortgage on the damaged home, cover closing costs, or fund rebuilding. How they're used affects your debts and assets, so plan it with Matthew before committing. If you have a mortgage, your servicer may control structural claim checks — see mortgage relief options.
What about VA or USDA loans instead?
Eligible veterans and service members may compare a VA loan, and buyers in eligible rural areas may compare USDA financing. Each has its own rules. Matthew can compare them with 203(h) and standard FHA side by side.
Can I rebuild on my own lot with 203(h)?
Yes. 203(h) can be used to reconstruct as well as to buy a replacement home. Rebuilding involves construction timelines, plans, and contractors, so start early.
Can 203(h) be combined with 203(k)?
Yes. HUD allows 203(h) to be combined with 203(k) to finance repair or rehabilitation. See rebuilding with 203(h) and 203(k) and the sister site FHA 203(k) Info.
Can I buy a newly built home?
Generally, yes, if the home and builder meet FHA requirements for new construction. Documentation requirements can differ from those for existing homes, so ask early.
Can I buy a condo with 203(h)?
Yes, a unit in an FHA-approved condominium project can be eligible. Matthew can check a specific project's approval status.
Can I buy a manufactured home?
Possibly. FHA may insure manufactured homes that meet its requirements, such as being on a permanent foundation and treated as real property, and lenders may add their own requirements. Confirm a specific home with Matthew before making an offer.
How long do I have to apply?
Generally, your FHA case number must be assigned within one year of the President's declaration date. Don't wait until the last weeks — gathering documents takes time.
My area only has an emergency declaration or FMAG. Does that count?
Not by itself. Emergency declarations (EM) and Fire Management Assistance Grants (FMAG) are not major disaster declarations. A Presidential major disaster (DR) declaration is required.
What about a Public Assistance only declaration?
Many lenders and FHA disaster policies focus on counties designated for Individual Assistance. A Public Assistance only declaration may not make homeowners eligible. Matthew will confirm whether your county's designation qualifies.
How do I check whether my county qualifies?
Search FEMA's disaster declarations database, pick your state and the declaration, then review "Designated Areas" and the assistance type. The current disaster areas page tracks areas Matthew is watching.
I'm a real estate agent. How can I help clients use 203(h)?
Learn the three screening questions — primary residence, qualifying declaration, and timing — and connect clients with Matthew early. See resources for Realtors.
Can Matthew present a workshop for my office?
Yes. The complimentary FHA Disaster Recovery Workshop™ is available live on Zoom nationwide and in person in select markets. Nothing of value is exchanged for referrals.
Find out if FHA 203(h) fits your situation
Tell Matthew a little about the property and your plans. He'll follow up by phone or email — no obligation.
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