Hurricane Ida struck New Orleans on Sunday as a Category 4 hurricane with up to 150 mph winds and as one of the most powerful storms to ever make landfall in the U.S. It blew roofs off buildings, caused intense flooding and even reversed the flow of the Mississippi River, according to The Associated Press. Hurricane Ida left the entire city without power except for its generator power, the city’s electricity provider Entergy confirmed.
President Joe Biden issued a major disaster declaration, and many people lost their homes entirely to the storm. Estimates for insurance costs vary but AccuWeather predicts that damage from the storm could reach up to $80 billion, CBS News reported.
If your home has been damaged due to this major hurricane and you're looking at how to begin repairs, you could consider taking out a home improvement personal loan. A home improvement personal loan can help you pay for repairs at a lower cost in today’s low-rate environment. Visit Credible to find your personalized rate.
Fannie Mae, Freddie Mac extend help
As rescue teams and the Louisiana National Guard send in helicopters, high-water vehicles and rescue boats, finance companies are helping with the aftermath of what many homeowners will deal with from the storm. Mortgage giants Fannie Mae and Freddie Mac — which back about 70% of all mortgages, according to the Urban Institute — announced Monday that they extended forbearance help to homeowners affected by the storm. Here are some of the options the government-sponsored enterprises (GSE) laid out:
- Request disaster assistance from your mortgage servicer, who can offer forbearance options. Servicers can even offer forbearance for up to 90 days without contacting the homeowner if they believe the homeowner was affected by the disaster.
- Forbearance periods for a disaster can typically reduce or suspend mortgage payments for up to 12 months. Homeowners do not have late fees and foreclosure proceedings are suspended during this time.
Some homeowners who were in COVID-19-related mortgage forbearance may have extension options and should reach out to their mortgage servicer.
"We urge everyone in the path of the storm to focus on their safety," Cyndi Danko, Fannie Mae's vice president of single-family risk management, said. "Fannie Mae is committed to ensuring assistance is available to homeowners and renters in need and we encourage residents impacted by this storm to seek assistance as soon as possible."
The GSEs will also help homeowners by working through a personalized recovery plan, help them request aid from FEMA or other sources and connect them with ongoing guidance from experienced disaster relief advisers.
If you were affected by the hurricane, a personal loan for home improvements could help you with home repairs if you don’t have flood insurance, or if it doesn’t cover everything. Visit Credible to compare multiple lenders at once and find the best rate for you.
Options for homeowners affected by Hurricane Ida
Homeowners affected by Hurricane Ida should first check if there are government programs like Fannie Mae and Freddie Mac’s that can help them pause their mortgage payments, but those aren’t the only options available to them. Homeowners should contact their mortgage servicers to see what is available.
"Once safe, homeowners whose homes are impacted should contact their mortgage servicer – the company they send their monthly mortgage payments to – as soon as possible to talk about available mortgage relief options," Bill Maguire, Freddie Mac's vice president of single-family servicing portfolio management, said. "This also includes homeowners whose places of employment have been impacted resulting in a financial hardship that prevents them from being able to make their monthly payment."
Here are some options available to homeowners:
Mortgage forbearance: Individuals whose home or work was impacted by the hurricane may qualify for forbearance if their mortgage is backed by Fannie Mae or Freddie Mac. Even those whose loans aren’t backed by the GSEs might have their own forbearance options and should contact their mortgage servicer. When its time to begin making payments once again, here are the options that homeowners with government-backed loans will have, according to Freddie Mac:
- Reinstatement: While not required, homeowners can pay back their missed payments in one lump sum to bring their mortgage payments up to date.
- Repayment plan: Homeowners can increase their monthly payments to slowly pay back their missed payments.
- Payment Deferral: Homeowners can resume making their previous monthly payments, and add the missed payments to the end of the loan. They are usually paid back when the homeowner sells the home or refinances, and do not accrue interest in the meantime.
- Loan modification: Homeowners who are still struggling after their forbearance period ends can request a loan modification to reduce their monthly payments by readjusting the loan terms.
Flood insurance coverage: Many homeowners whose homes were destroyed by Hurricane Ida will likely have some form of flood insurance to help pay for the damages since this type of insurance is a requirement for all homes in FEMA flood zones. However, because of the widespread damage caused by the hurricane, many homes outside of normal flood zone areas could have been affected. Also, if it was the place of work, rather than your home, that was affected, FEMA’s National Flood Insurance Program won’t do much good.
Personal home improvement loan: If your flood insurance won’t cover all your damages, or if you didn’t have flood insurance, a personal home improvement loan can help homeowners pay to repair damages. And after taking out a personal loan, homeowners that qualify for forbearance can even use that time without a mortgage payment to help pay back the home improvement loan. Visit Credible to get prequalified in minutes without affecting your credit score.
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