FHA responds to Helene, Milton by issuing temporary waiver to remodel loan program

I Federal Housing Administration (FHA) this week announced two temporary policy waivers as the response to hurricanes Helene and Milton continues.

The FHA’s 203(k) mortgage rehabilitation program currently requires that “if the repair is considered ‘substantial,’ it would be ineligible for financing” as part of the limited 203(k) election, “if the repair prevents the borrower from living in the property for more than of 15 days.”

This demand is being temporarily reduced as part of the ongoing response to successive disasters in the Southeast.

As a result of Helene and/or Milton, “many buildings were heavily impacted or destroyed and now require repairs and/or renovations,” the agency said. “FHA believes that the temporary waiver of its definition of ‘major repair’ related to the 15 days (or 30 days after November 4, 2024) required to complete repairs is necessary” to ensure that homeowners in these presidentially declared major disaster areas (PDMDAs) can rebuild.

The temporary waiver, issued Monday, applies to FHA-insured 203(k) mortgages closed on Aug. 31, 2025 or before.

Importantly, the temporary waiver affects the 15-day residency requirement in designated disaster areas, but the requirement that “at least one borrower reside in that area within 60 days remains the same,” FHA added.

Another policy that applies to PDMDAs often requires “damage assessment reports” for properties in these areas. These reports must be made after the closing date of the “incident period” – the day(s) on which the disaster occurred – or at least 14 days from the start of the incident period, whichever is earlier.

A new temporary waiver for a second 14-day period applies to assessment reports from the Hurricane Milton disaster area, which was officially announced on Oct. 11.

But because of the responses to both Helene and Milton – “which had a significant impact on the same counties within a 14-day period” – the current policy requiring different 14-day waiting periods for damage assessments and reports after each event “has created significant operational delays in repair/renovation.” buyers and sellers of houses.”

Since i Federal Emergency Management Agency (FEMA) is currently being implemented in these disaster areas, FHA believes there is “sufficient stability and risk reduction to eliminate the requirement for a second 14-day waiting period for inspections and damage reports associated with Hurricane Milton PDMDA.”

This waiver only applies to the 14-day period for making a damage assessment report. Other requirements – including the need to “make a damage assessment report, and other escrow assessment and adjustment requirements, for all properties with pending loans or approvals to PDMDAs” – remain the same.

The rollout announced this week is effective immediately.

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