State of Vermont, and FEMA will be forced to reject some project applications even if they satisfy all of the eligibility criteria.
Homeowners are not forced to participate in the program. It may, however, be the
only way for a homeowner to obtain anything close to fair compensation for her damaged property.
Homeowners are generally offered compensation equal to 75% of the pre-disaster
value of their property. In its application for HMGP funds, the locality will estimate a total project cost for purchase of the home, demolition of structures and removal of hazardous substances, and conversion of the land into green space. The standard pre- disaster value will be the assessment on file with the local lister. The homeowner can challenge this assessment by providing documentation of the cost of major improvements made since the last assessment or submitting a pre-disaster appraisal report. In one Irene buy-out case, the buy-out value of the home increased by a whopping $140,000 after the homeowner submitted records of her improvements to her home. If a project is granted final approval, FEMA will cover 75% of the total project cost. Most localities have insufficient funds to cover the remaining 25% of project costs, forcing the homeowner to take that amount as a loss.
The homeowner may be eligible to receive the balance of her project costs not
covered by FEMA through other means. If the homeowner had Increased Cost of Compliance coverage as part of his flood insurance policy, the ICC coverage may, if the town chooses, be used to cover all or some of the 25% project cost balance. At the State’s discretion, other funding may be allocated to cover all of some of the 25% not covered by HMGP. For example, after Irene, the State allocated almost $6 million of HUD CDBG Disaster Relief Funds toward the buy-out program to make homeowners as close to “whole” as possible.
FEMA duplication of benefit rules apply to HMGP. In calculating the amount of
funding to be received by the homeowner for the buy-out, the locality will subtract the following from the amount of the check to be offered at the closing table:
FEMA housing repair grants (unless they were spent prior to the homeowner’s participation in HMGP);
Insurance payments specifically for real property loss (unless they were spent prior to the homeowner’s participation in HMGP);
Charitable donations for home repair or replacement costs (the town may decide to use such donations as part of the 25% not covered by FEMA).
When the locality purchases the property, the sale must provide the locality with
clear title, free of any encumbrances or liens. Primary and junior lienholders must be paid in full or otherwise release all claims against the property. The homeowner and her advocate should look into the nature and value of all encumbrances on the property. If at all possible, prior to closing, the homeowner and advocate should attempt to negotiate
23
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118