Housing and Urban Development (HUD) Secretary Steve Preston announced a foreclosure moratorium in 34 parishes throughout Southern and Central Louisiana last week, and offered support to homeowners and low-income renters forced from their homes following Hurricane Gustav. This foreclosure relief will help families living in presidentially declared disaster areas whose damaged homes are insured through the Federal Housing Administration (FHA).

Preston stated, “... we are suspending FHA foreclosure activities throughout Louisiana's hardest hit parishes. This foreclosure moratorium will give families the time they need to figure out how to begin the recovery process without having to worry about the prospect of being put out of their homes.”

In certain storm and flooded ravaged parishes, HUD is granting a 90-day moratorium on foreclosures of mortgages insured by the FHA. In addition, HUD is strongly recommending that loan servicers take such actions as special forbearance, loan modification, refinancing, and waiver of late charges.

A presidential disaster declaration also triggers a variety of federal assistance including grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster.

Following President Bush's disaster declaration, HUD said it will:

- Offer states the ability to re-allocate existing federal resources toward disaster relief - HUD's Community Development Block Grant (CDBG) and HOME programs give the state the flexibility to redirect millions of dollars to address critical needs, including housing and services for victims. HUD will contact state and local officials to explore their needs for streamlining the Department's CDBG and HOME programs in order to expedite the repair and replacement of damaged housing.

- Make mortgage insurance available - HUD's Section 203(h) program provides FHA insurance to disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. Borrowers are eligible for 100 percent financing, including closing costs.

- Make insurance available for both mortgages and home rehabilitation - HUD's Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home.

- Offer Section 108 loan guarantee assistance - HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

To view HUD's full announcement, including the specific parishes affected, click here. For more information about HUD programs designed to assist disaster victims, click here.