AHFA's Disaster Policy
Man-made or natural disasters, such as flooding, mudslides, or fires, can inflict varying degrees of damage to a property. To mitigate risk, Alabama Housing Finance Authority (AHFA), maintains and publishes requirements for properties that are located within a disaster area.

AHFA’s Disaster Policy applies to properties located in counties where:
  • The Federal Emergency Management Agency (FEMA) has issued a major disaster declaration
  • An investor has issued a disaster notification
  • AHFA has made a determination that there is risk of damage from a disaster that has not yet been declared by FEMA or an investor (i.e. AHFA pre-emption)

Please refer to the list of affected counties published by FEMA using the following link: http://www.fema.gov/disasters.
Disaster Policy Requirements
  • AHFA Disaster Policy requirements apply during an ongoing disaster and for 90 days following the incident end date.
  • Disaster inspections are required if the appraisal is dated on or before the incident end date.
Disaster Inspection Requirements
An exterior inspection is required and must include evidence to verify that the property is undamaged. The inspection may be provided in various formats as long as the requirements are met. 

Inspections may be dated prior to the incident end date (or even prior to an end date being established by FEMA) except on FHA transactions (see below). The inspection, however, must be dated on or after the incident begin date.
Conventional Loans
  • The exterior inspection should be performed by the original appraiser when possible, or it may be performed by another licensed appraiser, licensed property inspector, or nationally recognized field company.

  • If damage is noted by the inspection, Form 1004D/442 “Appraisal Update and/or Completion Report” is required to document restoration to pre-disaster condition.
  • Form 1004D/442 must be completed by a licensed appraiser. The inspection cannot be performed by an unlicensed appraiser assistant. 
FHA Transaction Requirements
  • Applicable transactions must have a damage inspection report that identifies and quantifies any dwelling damage.
  • The damage inspection report must be completed by an FHA Roster Appraiser (by the original appraiser whenever possible) even if the inspection shows no damage to the property.
  • The report must be dated after the incident end date. Neither FHA nor AHFA require a specific form for a damage inspection report.
VA Requirements
  • A “Lender and Veteran Disaster Certifications” form is required on all VA loans and must be signed by the borrowers and lender
  • The VA Loan Summary Sheet (VA Form 26-0286) “Remarks” section of the form must be annotated “Lender and Veteran Disaster Certifications Enclosed.
If you have any questions about AHFA's disaster policy, please contact Lisa Treece at ltreece@ahfa.com .