The Federal Housing Administration is starting to allow timeline waivers for re-inspections of California properties affected by recent wildfires, and parts of Puerto Rico hit by Hurricane Maria.
"FHA believes that the situations in certain municipalities in Puerto Rico and certain counties in California have stabilized to the extent that further damage to the properties appear unlikely, despite FEMA not having closed its incident period," according to a bulletin issued Tuesday.
The government agency's policy calls for lenders to wait for the end of federally declared incident periods before re-inspecting properties involved in pending sales they are financing when disasters hit. But after lenders and the Mortgage Bankers Association asked to be able to re-inspect earlier, FHA began issuing waivers for properties affected by Hurricane Irma.
The incident period for parts of Puerto Rico affected by Hurricane Maria began Sept. 17, according to the Federal Emergency Management Agency. The incident period for parts of California affected by the wildfires got underway on Oct. 8. Neither has ended yet. Irma's incident period, which began Sept. 4, ended Oct. 18.
More than 172,000 homes are at risk for damage from the wildfires that recently hit the metropolitan areas of Napa and Santa Rosa, Calif., according to CoreLogic estimates. While most of the damage is in that area, other parts of the state were affected as well.
Waivers for properties affected by Hurricane Maria and the wildfires are available on the Department of Housing and Urban Development's website.
"These waivers do not affect mortgagees' obligations to exercise prudent lending practices and ensure that mortgages they submit for endorsement fully comply with FHA's property eligibility requirements, as well as any property condition requirements related to claims processing," according to the bulletin issued Oct. 24.