What Happens to Your Mortgage and Bills After a Natural Disaster?

With wildfires sweeping through Los Angeles County, images of destruction are everywhere. Over 12,000 structures have been burned down, neighborhoods reduced to rubble and nearly 92,000 residents forced to evacuate.

As Angelenos come together to rebuild their city—and their lives—people across the nation ask the same questions: What happens to financial responsibilities, like mortgage payments, rent, and utility bills, when their home is destroyed?

This guide answers the most pressing questions for homeowners and renters affected by natural disasters, drawing on resources and advice from FEMA, mortgage services, and disaster survivors.

Do You Still Have to Pay Your Mortgage If Your Home Is Destroyed?

Yes, even if your home is no longer standing, your obligation to pay your mortgage remains. However, there are relief options for homeowners impacted by disasters like the wildfires in LA.

Homeowners can request forbearance, a temporary suspension, or a reduction of mortgage payments for up to 12 months. This relief is available for loans backed by Fannie Mae, Freddie Mac, the FHA, and the VA. During forbearance, late fees are waived, and foreclosure proceedings are paused.

“Homeowners affected by a disaster are often eligible to reduce or suspend their mortgage payments for up to 12 months,” Fannie Mae stated in a recent press release. However, this relief is not forgiveness. Once forbearance ends, borrowers must repay the deferred payments as a lump sum, in installments, or by extending the loan term.

For those with private loans, options vary by lender. Major banks like JPMorgan Chase and Bank of America have also implemented disaster forbearance programs. If your home has been destroyed, contact your mortgage servicer immediately to discuss available options.

What Should You Do Immediately After Your Home Is Destroyed?

If your home has been declared a total loss, your first step should be to contact your insurance provider. Filing a claim as soon as possible can unlock benefits like temporary housing assistance and coverage for rebuilding costs. California law requires insurers to provide four months of loss-of-use payments upfront, which can help cover rent or hotel stays while you figure out your next steps.

It’s important to document everything. Take photos and videos of the damage, and keep all receipts for expenses like hotel stays, clothes, and pet boarding. Depending on your insurance policy, these costs may be reimbursed.

Barbour also recommends applying for disaster assistance through FEMA and the Small Business Administration (SBA). FEMA provides grants for immediate needs like food and temporary housing, while the SBA offers low-interest loans to homeowners and renters, even if you don’t own a business.

What Happens to Rent Payments After a Disaster?

For those in LA, California law protects renters whose homes have been damaged or destroyed by natural disasters. If your rental unit is completely uninhabitable, your lease becomes void, and you are no longer required to pay rent. Your landlord must also return your security deposit.

Here in Texas, Generally, the landlord is responsible for structural damage (unless the fire was the tenant’s fault), and the tenant is responsible for damage to his/her own belongings (unless the fire was the landlord’s fault).

Your landlord is generally responsible for providing a safe and habitable living environment.

This means they may be required to arrange and pay for repairs or find you a comparable place to live while repairs are being made.

However, laws can vary, so it’s important to check the specific tenant rights in your area.

The Tenant Resource Center provides a wealth of information on this topic.

For units with partial damage, tenants have the right to terminate the lease or remain while repairs are made. During this period, rent payments are generally suspended until the unit is livable again. (Again, check with me or a tenant’s rights resource!)

Renters without insurance may still qualify for FEMA assistance or SBA loans to cover relocation expenses and replace personal belongings.

Do You Still Have to Pay Utility Bills?

Utility obligations after a disaster depend on your provider and your property’s condition. In LA, Southern California Edison has suspended billing for customers in mandatory evacuation zones and permanently canceled bills for homes that were completely destroyed.

Similarly, SoCalGas has forgiven current and recent bills for destroyed properties, while the Los Angeles Department of Water and Power has paused billing notices in fire-affected areas. 

If you’re unsure of your provider’s policies, contact them directly to discuss available relief options.

Can You Get Relief on Property Taxes?

In California, if your property has sustained damage exceeding $10,000, you can file a calamity claim with your local assessor’s office to request a reassessment. If approved, this can temporarily reduce your property taxes until repairs or rebuilding are complete. Claims must be submitted within 12 months of the disaster.

In Texas, property owners in a governor-declared disaster area can apply for temporary property tax relief. File a disaster reappraisal application with your local appraisal district within 105 days of the declaration. Provide proof of damage and location in the disaster zone. Taxes are recalculated based on the reduced property value until repairs or rebuilding are complete. 

What If You Don’t Have Homeowners Insurance?

For uninsured homeowners, disaster relief programs can provide a vital safety net. FEMA offers grants to cover temporary housing, food, and other necessities, while the SBA provides low-interest loans of up to $200,000 for structural repairs and $40,000 for personal property replacement.

Nonprofits like United Policyholders also offer guidance to uninsured homeowners navigating recovery. Even without insurance, there are resources to help you rebuild, but the process can be overwhelming. Staying organized and seeking help is key.

How Can Residents Find Temporary Housing?

Finding temporary housing can be a challenge after a disaster. We’ve all seen the news surrounding limited rentals and price gouging in LA. 

Often, many organizations will offer assistance after widespread disasters. Airbnb.org offers free, temporary housing to LA fire victims, and some hotels and apartment complexes provide discounts. FEMA’s housing assistance program is also an option, but it requires a state request to activate.

How Do You Cope Emotionally After Losing Your Home?

The emotional toll of losing your home can be as overwhelming as the financial strain. Survivors and experts emphasize the importance of seeking support, whether from counseling services offered by FEMA, local nonprofits, or community networks. 

​​Recovering from a natural disaster is a long process, but you don’t have to do it alone. Document your losses, contact your mortgage servicer and insurance company, and apply for all available aid. With persistence and support, you can navigate the road to recovery.