NFIP Substantial Damage: What Does It Mean for Florida’s Disaster Survivors?

What Does Substantial Damage Mean?

“Substantial damage applies to a structure in a Special Flood Hazard Area (SFHA) – or 1-percent-annual-chance floodplain – for which the total cost of repairs is 50 percent or more of the structure’s market value before the disaster occurred, regardless of the cause of damage. This percentage could vary among jurisdictions, but must not be below NFIP standards.

For example, if a structure’s market value before the damage was $200,000 and repairs are estimated to cost $120,000, that structure is substantially damaged. Land value is excluded from the determination.

For communities that participate in the National Flood Insurance Program (NFIP), substantial damage determinations are required by local floodplain-management ordinances. These rules must be in place for residents of a community to purchase flood insurance through the NFIP.”

Citation: Federal Emergency Management Agency. (2017). Fact Sheet: NFIP “Substantial Damage” – What Does It Mean? [Press Release] Retrieved from: https://www.fema.gov/news-release/2017/09/14/fact-sheet-nfip-substantial-damage-what-does-it-mean

Can I Appeal the Substantial Damage Determination?

Yes. Property owners may appeal the Substantial Damage determination through the Substantial Improvement process. The general steps are as follows:

1. A contractor or property owner can submit a building permit to repair the damages that demonstrates the work to repair the structure is less than 50 percent of the market value of the pre-damaged structure. In addition to the building permit application and construction plans, the application package must include:
   1. Building Permit Application;
   2. Owner-Builder Affidavit;
   3. Repairs - you can use these helpful documents and forms to determine if Substantial Damage has occurred: Substantial Improvement and Repair of Substantial Damage Packet and Cost Estimate Worksheet and 50% Spreadsheet for Determining Substantial Improvement and Repair of Substantial Damage, which is an interactive fillable form. More information can be found here: Substantial Improvement/Substantial Damage Desk Reference

   4. Mobile/Manufactured Homes: Supplemental Application titled: Removal, Replacement, and Repair of Mobile/Manufactured Homes

   5. Re-roof / Roof Repairs:
      1. Contractor's Initial Submittal Requirements for Mobile/Manufactured Homes, or Owner-Builder's Initial Submittal Requirements for Mobile Homes, or
      2. Contractor's Initial Submittal Requirements for 1 & 2 Family Dwelling/Townhouses, or Owner-Builder's Initial Submittal Requirements for 1 & 2 Family Dwelling/Townhouses, and 
   6. Other materials as required or requested.
2. The Building Division plans reviewer will review the building permit application for consistency with the substantial damage field assessments.
3. If the cost of repairs is less than 50 percent of the market value of the pre-damaged structure it may be determined the structure can be repaired (i.e. the Improved Values on the Collier County Property Appraiser website).
4. If the cost of repairs exceeds 50 percent of the market value of the pre-damaged structure, the structure must come into compliance with the Florida Building Code and the Collier County Flood Damage Prevention Ordinance, more specifically that the structure must be raised to meet current elevation requirements.
5. If the building permit indicates Substantial Improvement, the property owner may appeal a Substantial Improvement determination to the Collier County Building Official.
6. A property owner may appeal the Building Official’s determination to the Board of Building Adjustment and Appeals.

Can I Make Incremental Improvements?

A property owner cannot make incremental improvements to repair a structure. The following is from the SI/SD Desk Reference (FEMA P-758/ May 2010). Highlights have been added for emphasis.

“The definition of “substantial damage” makes it very clear that the substantial damage determination must consider all costs necessary to restore damaged structures to their before-damage condition. Even if an owner elects to perform less work or make repairs over time, the community must require the applicant to provide an estimate of the costs to fully restore the structure.”

 

How Do I Elevate My Manufactured Home on My Property?

Generally speaking, a manufactured home installer can elevate the home. Other design professional may be required. A building permit application and the Supplemental Application titled: Removal, Replacement, and Repair of Mobile/Manufactured Homes Post Hurricane Irma is also necessary.

How Do I Remove or Replace My Manufactured Home From My Property?

Generally speaking, a building permit application and the Supplemental Application titled: Removal, Replacement, and Repair of Mobile/Manufactured Homes Post Hurricane Irma is also necessary.

The following are several programs to consider when rebuilding:

Increased Cost of Compliance (ICC).

This program assists property owners with a National Flood Insurance Program flood insurance policy that have suffered a flood loss and whose properties are declared to be substantially or repetitively damaged. It provides additional funds to help cover the cost of mitigation activities, such as elevating or rebuilding a home, that will reduce the risk of future flood damage to the building. ICC will pay up to $30,000 to bring the structure into compliance with federal, state, and local floodplain management requirements. For more information contact your flood insurance adjustor and the Collier County Floodplain Management Section at floodinfo@colliercountyfl.gov.

U.S. Department of Housing and Urban Development (HUD) Section 203(h) Mortgage Insurance for Disaster Victims.

This program makes it easier for disaster survivors to get a mortgage loan to buy or rebuild a home. You can apply for this program if you own a one-family home that was damaged or destroyed in Irma and you plan to live in the home funded by the loan. To use this program, apply for a loan with a lender approved by the Federal Housing Administration (FHA). HUD has a database of FHA-approved lenders online: https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist.

U.S. Department of Housing and Urban Development (HUD) Section 203(k) Rehab Mortgage Insurance.

Title I Home and Property Improvement Loans

Manufactured Home and Lot Combination Insurance