The Federal Housing Administration (FHA) on Friday announced two new key responses to its ongoing disaster recovery efforts in the wake of an accelerating trend of extreme weather events. These include an extension of a foreclosure moratorium for victims of hurricanes Helene and Milton, as well as a new pre-disaster housing partnership with the Federal Emergency Management Agency (FEMA).
FHA formalized the foreclosure moratorium extension in Mortgagee Letter (ML) 2024-25, requiring lenders to immediately implement the extension that is now set to expire on April 11, 2025.
“This extension provides homeowners with FHA-insured mortgages in Presidentially Declared Major Disaster Areas (PDMDAs) additional time to access federal, state, or local housing resources; consult with HUD-approved housing counselors; and/or rebuild their homes,” FHA said in its announcement.
The extensions are warranted due to the sweeping devastation caused by the back-to-back impact of the hurricanes, including “extensive property damage sustained, and the reduced capacity for those impacted to access needed resources,” FHA explained.
Several localities across the states of Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia are currently designated as PDMDAs due to Helene and Milton.
“When disaster strikes, we know that families and communities need not only resources, but time to recover,” said Adrianne Todman, acting secretary of the U.S. Department of Housing and Urban Development (HUD). “Today, by extending our foreclosure moratorium, we continue the Biden-Harris administration’s efforts to help those affected by the catastrophic Hurricanes Helene and Milton to repair and rebuild their homes, communities, and lives.”
While an automatic 90-day foreclosure moratorium was imposed in the immediate aftermath of the storms, the extent of the damage and impact for residents necessitates the extension, the agency explained. FHA is also extending deadlines for servicers to “perform certain legal actions related to foreclosure for an additional 180 days following the end of the foreclosure moratoriums.”
“Because the consecutive Hurricanes Helene and Milton caused a great deal of damage and disruption, FHA believes it is appropriate to extend our foreclosure moratoriums by 120 days,” FHA Commissioner Julia Gordon said in a statement. “This extension will provide more time for homeowners to review a range of options with their mortgage servicer if they are unable to resume regular mortgage payments due to the impact of the disaster.”
Additionally, HUD announced a new partnership with FEMA that is designed to expand post-disaster housing efforts by establishing the “Pre-Disaster Housing Initiative.” This targets specific states with preemptive assistance in case a disaster strikes.
“During an eight-month period, both agencies will provide technical assistance and guidance to Kentucky, Michigan, and Missouri state officials and emergency managers to maximize housing-centric planning that can help mitigate potential housing shortfalls in communities when disasters strike,” FHA said in its announcement.
These particular states were chosen because they “provide a wide cross section of perspectives on the challenges of planning and executing post-disaster housing missions,” the agency explained. These attributes include geographic diversity, a higher frequency of disaster declarations, and the types of disasters they and other surrounding states are likely to face.
Each state will have the chance to establish their own priorities and expected outcomes. They’re expected to engage with their local communities during the process “to develop a disaster housing strategy that can be executed when needed,” according to FHA.
Todman added in a statement that the agencies will not simply wait for another disaster to strike before acting, since preemptive action can make a pronounced difference in mitigating challenges stemming from disasters.
“[W]hen disasters do strike, we have an obligation to help communities rebuild,” she said. “That’s why I am calling on Congress to move swiftly to approve the president’s $12 billion request for HUD’s disaster recovery funding, so we can help Americans rebuild their homes, now.”
The interagency partnership can also help to strengthen ties between HUD and FEMA, according to Colt Hagmaier, FEMA’s assistant administrator for recovery.
“This partnership remains a priority for both FEMA and HUD and we are thrilled to see the exponential impacts of this initiative throughout the nation,” he said in a statement.
