According to a recent article from The Washington Post, over 80% of home owners affected by Hurricane Harvey do not have flood insurance, leaving many with little financial aid to rebuild. If you are one of the disaster victims that falls into this category, we’re here to provide a guide and assistance on recovery options for home owners.
First and foremost, contact the creditors for your mortgage, auto loans, student loans, and credit cards to ask for a three-month reprieve from payments. Most will allow you to do this without assessing late fees. This can offer some much-needed relief, allowing flexibility to invest in caring for your family and beginning home repairs. Be sure to clarify with all creditors the terms of the reprieve and budget accordingly, as most creditors only defer payments, with the balance coming due in full after the grace period.
Next, take a lot of photos – from every room and angle possible. Call your insurance companies to get your claims started immediately. Be sure to also take photos of any and all damaged contents and belongings to maximize any insurance claims or the $33,000 in FEMA relieve that may be available to you.
As soon as the water recedes, begin moisture mitigation right away, being careful not to throw anything away until your insurance adjuster has seen it. The goal is to get anything out of your home that is wet so it can begin to dry. A Shop-vac can be a valuable tool in this effort, so purchase or borrow a unit as availability allows. A dehumidifier may also be a helpful item to expedite the removal of moister from the house.
Note: Please be aware that if your outlets were exposed to water they are likely a hazard to use. Obtain an outlet tester to check the outlet before plugging anything in or have an electrician review your home before operating any appliances.
Once you have full access to all the affected walls in your home, cut drywall to 4’ above the floor using a razor blade. Don’t do it like they do on HGTV with a sledge-hammer. Making the straightest cuts you can will help the process of installing new drywall go much quicker and easier. Again, save everything to be reviewed by the insurance adjuster before tossing it.
When insurance won’t step in or if your coverage doesn’t apply to flood damage, there are still options available to you.
Option 1 – FEMA
Regular homeowners insurance and supplementary wind policies do not cover flood damage at all. Those with no flood coverage that are affected by flood waters will be dependent on private charity organizations or government aid from the Federal Emergency Management Agency (FEMA). Unfortunately, FEMA has proven to be a poor substitute for flood insurance coverage as it is currently capped at a $33,000 benefit to cover housing repairs and other incidentals like hotel stays and personal items. Unfortunately, in most cases, FEMA reimbursement can be helpful to offset some of the expense of lost personal items, but rarely will be ample to get a home back to livable condition. With a total cap in financial aid at $30 million, we highly recommend contacting Disaster Assistance as soon as possible to increase your chances of obtaining a successful claim.
Registering online at www.DisasterAssistance.gov is the quickest way to register for FEMA assistance. If you are unable to access the internet, you can also call: 1-800-621-3362.
Aid is usually slow to arrive, particularly in a large-scale disaster that strains FEMA’s capacity to inspect and assess all the damaged homes. There is estimated to be over 1 million homes in Houston and surrounding areas that have taken on water and are without flood insurance. You can expect this process to take a significant amount of time considering the sizable numbers they are dealing with.
Option 2 – SBA Disaster Loans
Perhaps one of the best solutions for those who get little or no FEMA aid is a low-interest government loan. For those with minimal damage or damage not covered by other sources, this could be the largest vehicle for disaster recovery. Small Business Administration disaster loans, contrary to how it sounds, are not just for small businesses. However, there are eligibility requirements on loans that exceed $25,000 and will have to be secured by collateral.
In some cases, SBA can refinance all or part of a previous mortgage when the applicant does not have credit available elsewhere and has suffered substantial disaster damage not covered by insurance. Applicants are required to first register with FEMA and then complete additional IRS forms that would allow the SBA access to your tax return information.
Option 3 – Selling in Current Condition
There’s still a long road ahead, even for homeowners who have flood insurance. Finding people to do the repair work will be extremely difficult. Construction companies reported a shortage in workers even before the storm hit and cost of labor rises exponentially high.
There are a number of companies in Houston that are willing to buy houses in as-is condition. Although not for everyone, this option is great if you:
- You were considering selling your home before Hurricane Harvey, or
- Are unable or uninterested in pursuing home repairs.
Through a home buyer program no repairs are needed and selling the home is typically very quick and hassle free. We’ll arrange a time to view your home and talk about the options available to you. A no-obligation cash offer will be extended to you for review and then you can make the decision that is best for your family. If you want to sell and your home and it doesn’t need repairs, and you don’t mind working with first time home buyers – then your best bet is to list it. We can refer you to a great real estate agent if you don’t know one. That’s why we’re accredited by the Houston Better Business Bureau.
We understand the stress of this disaster situation and we’re here to help. Ultimately we want you to make the best decision for your situation. We hope this guide has been helpful in taking the next steps toward recovery, however that comes.