Week 3: Substantial Damage Determinations.

By Murray Wennerlund published 2-17-2024

Homeowners frequently challenge a specific damage assessment: the Substantial Damage Estimate (SDE), typically conducted by your municipality's floodplain manager.

What is a determination of substantial damage?
A determination of "substantial damage" assesses whether a home or structure has incurred significant damage within a federally declared disaster area, regardless of the cause of the damage.. This evaluation is crucial for properties located in Special Flood Hazard Areas (SFHAs) under the National Flood Insurance Program (NFIP). It aims to determine if repair costs exceed 50% of the structure's pre-disaster market value, playing a pivotal role in classifying a structure as substantially damaged.

What is FEMA's Role in the Substantial Damage Determinations?
FEMA's role in substantial damage determinations primarily involves providing materials, training, and guidelines for individuals or entities to conduct their own assessments. They offer self-service training, forms, policies, and procedures for individuals to conduct their own SDE. This task can be undertaken by various individuals, including independent contractors, builders, realtors, neighbors, homeowners, or knowledgeable family members, without affiliation with FEMA, HSA, HUD, or any other federal or state agency.

Leveraging Substantial Damage Determinations:

• Addressing FEMA Denials:
  If FEMA denies assistance due to indirect disaster effects, you can leverage a substantial damage determination to qualify for other needs assistance.
• Strengthening Appeals:
  If your damages fall below thresholds for federal recovery resources, a substantial damage determination can bolster your appeal.
• Flooded Home Eligibility:
  Utilize a substantial damage determination to challenge FEMA eligibility if your flooded home was initially deemed ineligible.
• Clarifying Manufactured Home Damage:
  Challenge pre-existing damage attributions for manufactured homes older than 8 years using a substantial damage determination.

Understanding Your Options when working the SDE procedures.
If your local floodplain manager, municipality, state, or another agency has determined your home to be substantially damaged, you have only two options.

1. Appeal the determination.
2. Accept the determination and seek additional assistance through your state's HUD CDBG-DR disaster recovery housing agency.

Soon, I'll provide the appeals process along with real-case appeal examples.
I'll also include a section on leveraging FEMA policy to generate your own Substantial Damage Estimate (SDE), enhancing your eligibility for increased disaster recovery aid.