What happens after the second storm hits?
Communities and homeowners in several areas of the country know there is a chance of being hit by multiple storms from one season to the next. It’s daunting enough to navigate housing recovery after a major storm, but what happens when another disaster strikes in the midst of recovery?
While it can take Congress and HUD months to appropriate and allocate CDBG-DR resources to impacted communities, grantees may be able to combine recovery efforts if certain conditions exist. Below, we break down the HUD policies and potential solutions to make housing recovery from multiple events as seamless as possible.
Identify all available resources
Even though CDBG-DR funds can be used to help homeowners recover from a second disaster, there are likely other resources (e.g., insurance and FEMA) available. Making sure those are used first is not only a requirement but will also help maximize recovery funding.
Getting the most out of every dollar is particularly important in the face of multiple disasters. Homeowners, states, and local governments often don’t receive enough CDBG-DR funding to meet all documented recovery needs. Further, the federal laws around duplication of benefits require grantees to consider all funding sources prior to awarding CDBG-DR funds, which can include:
- Builder’s risk insurance (if the project is mid-construction at the time of the second disaster, some contractors have policies that cover costs caused by so-called “Acts of God”)
- Homeowners and other private insurance
- National Flood Insurance Program and private flood insurance
- Nonprofit support
- FEMA Individual Assistance
- SBA loans
Confirm there’s enough money
After analyzing the available resources, it is critical to budget for additional repair or reconstruction costs. While it may seem like an obvious step, this accounting will help determine any potential limitations of providing additional assistance to homeowners dealing with multiple disasters.
Meet the conditions for using CDBG-DR appropriated funds
The 2019 HUD CDBG-DR Policy Guidance for Grantees and the June 2019 Main DOB Federal Register Notice allow grantees to use funds appropriated for the original disaster for subsequent disasters if the following conditions are met:
1. The activity is eligible in the action plan and program policies.
What this means for the grantee: Depending on the scope of the recovery activities needed after the subsequent disaster, it may be necessary to amend the action plan and/or the program policies to include new activities.
2. The need from the original disaster remained unmet at the time of the subsequent disaster.
What this means for an eligible homeowner: If applicants have a documented unmet need from the original disaster and have not completed the repairs from the original disaster, then they could be eligible for assistance to complete additional repairs.
What this means for the grantee: You must confirm and document the work from the original disaster was not complete at the time of the subsequent disaster.
3. The subsequent disaster exacerbated damage or loss caused by the original disaster.
What this means for the grantee: If the second disaster added damages and costs to the property, you can provide additional funding to eligible applicants, subject to the grantee’s applicable award calculation process and award caps. The grantee or homeowner must document the additional costs, which have to be verified by completing a professional inspection to determine the revised estimate of costs to rehabilitate or reconstruct damaged property.
Understand what CDBG-DR funds cannot be used for
Under the same rules, grantees are not allowed to use funds appropriated for the original disaster for subsequent disasters under the following conditions:
1. Addressing a need that only came out of the subsequent disaster.
What this means for an eligible homeowner: If the applicant was not impacted by the original disaster but was impacted by the second disaster, then they would not be eligible for assistance that comes from the original CDBG-DR appropriation to help recover from the second event.
2. Addressing a need that has been met in full prior to the subsequent disaster.
What this means for an eligible homeowner: If the repairs from the original disaster were complete at the time of the second disaster, then the applicant would not be eligible for assistance that comes from the original CDBG-DR appropriation to help recover from the second event.
3. Duplicating other assistance available, regardless of when it comes available.
What this means to an eligible homeowner: The applicant must report all private and public funding awarded or available after the subsequent damage, even if it comes after receiving additional CDBG-DR assistance.
What this means for the grantee: You must require applicants who receive funds for subsequent damage to sign an amended agreement that specifically includes the subrogation of funds received from the subsequent event if there is a duplication of benefits.
Addressing unmet needs from subsequent disasters
Following these guidelines will allow you to better assist your community in navigating the complex world of CDBG-DR. If you do have the misfortune of multiple storms, you’ll be prepared to utilize both new and existing CDBG-DR allocations in collaboration to address the needs of your community.
