Months after Hurricane Katrina and its smaller cousin Rita cut a swath of destruction through the Gulf Coast region, the Department of Housing and Urban Development (HUD) announced a $200 million initiative designed to buy time for the owners of heavily storm-damaged homes as they work to rebuild.
Under the Mortgage Assistance Initiative (MAI), HUD will make mortgage payments for up to one year for as many as 20,000 disaster victims in Alabama, Florida, Louisiana, Mississippi and Texas with Federal Housing Administration-insured (FHA-insured) mortgages who want to start living in their homes again.
The unprecedented mortgage-relief program will allow FHA borrowers in the storm-impacted areas to retain home-ownership as they concentrate on repairing their homes and finding jobs, as well as help FHA lenders by encouraging owners not to abandon their damaged properties and their mortgages, explained HUD Assistant Secretary and FHA Commissioner Brian Montgomery during a telephone press conference.
"This program will allow families to focus on their immediate needs without them having to worry about losing their homes," said Montgomery.
To be eligible for the MAI, families must have homes that are repairable and located within a presidentially declared disaster area that is designated for individual assistance. HUD said it will expand its current practice of making mortgage payments for qualifying homeowners who are in default by also making advance mortgage payments on behalf of borrowers for up to 12 months.
After the mortgage...