Disaster recovery and your mortgage

Flooding from storms on October 22 to 25, 2026 led the governor to declare a state disaster emergency for Alamosa, Archuleta, Dolores, Hinsdale, La Plata, Mineral, Montezuma, Ouray, Rio Grande, San Juan and San Miguel counties, and then Conejos. The Southern Ute Indian Tribe is seeking federal help separately.

A state emergency moves state resources. It does not by itself open the federal loan programs below.

The state asked for a major disaster declaration for Archuleta and Rio Grande counties, the two with damage documented first, for public assistance (roads, bridges, utilities and public buildings) and hazard mitigation. Other counties could be added as their damage is counted.

Individual assistance, the help that goes to households, was not part of the request; the state said it would say so if it asks. Some programs for homeowners, including FHA's 203(h) and SBA's home loans, depend on what the final declaration covers. We watch for it and update this page.

For comparison, the federal government denied the state's request after the October 2025 flooding, and in September 2026 approved public assistance only for summer wildfires and flooding in Custer, Pueblo, Ouray and Dolores counties (DR-4944).

Counties gather damage reports from homeowners, and those reports feed the state's request. The state is clear that a damage report is not an application for financial assistance. If individual assistance is approved, applications open through DisasterAssistance.gov.

Photograph everything before you clean up, keep receipts, and file the claim as soon as you can. Homeowners policies exclude flood; National Flood Insurance Program and private flood policies cover it. Mudflow can be covered under a flood policy.

An insurance check for damage is usually made out to you and your mortgage servicer together. Your servicer holds it and pays it out as repairs are done; ask them how they release funds.

Your servicer is the company you send payments to. Fannie Mae, Freddie Mac, FHA, VA and USDA loans all have relief for borrowers hit by a disaster, often a pause or reduction of payments (forbearance) and a plan to catch up afterward. What is offered can depend on whether your area is declared.

Ask what happens to the paused payments at the end: a lump sum, a repayment plan, or moving them to the end of the loan. Get it in writing. Counseling from a HUD-approved housing counselor is free; be wary of anyone who charges upfront to get you mortgage relief.

Insurers, servicers and every repair loan below work from written estimates. Be careful with anyone asking for large payments up front or offering to handle your insurance claim for a cut.

FHA's Section 203(h) insures a loan to buy or rebuild a one-family home you will live in, with no down payment, when your home in a Presidentially declared disaster area was destroyed or damaged enough that it must be rebuilt or replaced.

Closing costs and prepaids are paid in cash, by the seller (up to 6%) or with a lender credit. The FHA case number must be assigned within one year of the declaration. Credit that was good before the disaster counts; late payments caused by the disaster can be explained. It can be combined with a 203(k) to repair, but the combined loan follows 203(k)'s limits, so a down payment may be needed. FHA mortgage insurance applies either way.

The Small Business Administration lends to homeowners and renters, not only businesses, once a disaster is declared for their area. Up to $500,000 repairs or replaces a primary residence and up to $100,000 replaces personal property. The first payment is deferred 12 months with no interest in that time; terms run up to 30 years; the rate is capped at 4% for people who cannot get credit elsewhere. Second homes and vacation homes are not eligible.

USDA's Section 504 program lends up to $40,000 at a fixed 1% for 20 years to repair a rural home, for households under the county's low or very-low income limit. Borrowers must live in the home and be unable to get affordable credit elsewhere. Owners 62 and older with very-low income can get grants up to $10,000 over a lifetime, only to remove health and safety hazards, and a grant must be repaid if the home is sold within three years. Together, up to $50,000. It does not need a disaster declaration.

When a home may have been affected by a disaster, the lender must check its condition before the loan is sold, and may require an inspection or a new appraisal. Insured damage that does not affect safety or structure can sometimes close with repair funds set aside; other damage must be repaired first.

If you are under contract in an affected county, tell us now so we can plan the dates with your agent.

Insurers sometimes pause new policies in an area right after a disaster. Price insurance before your inspection deadline. A new National Flood Insurance Program policy usually has a 30-day wait, with exceptions such as a policy bought when a loan requires it; private flood policies set their own terms.