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HMGP Frequently Asked Questions

FEMA's Hazard Mitigation Grant Program (HMGP) takes a percentage of the federal money spent on recovering from a disaster and uses it for projects that reduce future risk. By law, FEMA can contribute 15 or 20 percent of a disaster's cost to this grant program. How this money is used is up to the State. Some states, for example, may use the money to elevate homes or they may use the money for the "acquisition of property", usually just called buyouts.

FEMA knows that it can be difficult for people to leave a precious home- even a home severely damaged by a disaster. Many communities and people have considered such an action, and they've rebuilt their lives and created new memories in safer places. Since 1993, participating communities have purchased more than 20,000 properties as part of this program. FEMA encourages all homeowners in affected communities to be sure they get all the information they need about buyouts so they can make the best decision for their families and their communities. What you should know about Property Acquisition (Buyout) Projects... >

1	How the program works
2	Fair Compensation
3	Voluntary Participation
4	The Steps of a Buyout
5	Costs The Community Will Pay
6	Duplication of Benefits
7	Advantages/Disadvantages

How The Program Works
It is important to understand that FEMA does not buy houses. Buyout projects, while 75 percent funded by FEMA, are administered by the State and local communities. The State and local communities work together to identify areas where buyouts make the most sense. Individuals may not apply directly to the State, but the community may sponsor an application on their behalf. Buyouts are an important way to reduce the risk of future disasters. Money is limited and in most cases, the amount of money set aside for mitigation cannot meet all the mitigation needs following a disaster. States prioritize mitigation programs-with input from the communities.

Property acquisition is one of many forms of hazard mitigation but it is the most permanent form. It removes people from harm's way forever. In a property acquisition project, the community buys private property, acquires title to it, and then clears it. By law, that property, which is now public property, must forever remain open space land. The community can use it to create public parks, wildlife refuges, etc. but it cannot sell it to private individuals nor develop it. Property acquisitions work the same way as any other real estate transaction. Property owners who want to sell their properties will be given fair prices for them. It is a terrific opportunity for people who live on or near hazard areas to get to safer ground.

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Fair Compensation
Communities may offer homeowners who agree to participate in a buyout project up to the fair market value of the home BEFORE the disaster struck. A licensed appraiser hired by the community determines the fair market value.

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Voluntary Participation
Buyouts are strictly voluntary. No homeowners are ever forced to relinquish their property. Homeowners who decide not to participate in the buyout may need to take risk reduction measures, such as elevating their homes.

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The Steps Of A Buyout
Homeowners don't apply to FEMA for a buyout. Buyouts are not part of the disaster application process and are not part of disaster assistance.

Since a buyout is not a simple matter- and requires a great deal of education and community input- it does not happen overnight. It may take months for a State and the affected communities to submit and agree to buyout proposals. Once a homeowner accepts a buyout offer, though, the average closing takes about 45 days.

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Costs The Community Will Pay
If you choose to sell your property, the community will pay the costs usually associated with real estate transactions, including the appraisal, title search, and if necessary, lot survey. The community will also pay the closing costs. The property owner will be responsible for any mortgages, liens, etc. against their property...just like any other real estate sale.

Also, like any other real estate sale, you will be responsible for the moving costs and other costs associated with renting or buying new property. Since property acquisition relies on voluntary participation, the government does not pay any relocation costs. However, there are exceptions for any tenant who is displaced by an owner's decision to sell, and for owners whose income level might preclude them from affording other housing.

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Duplication of Benefits
Because federal funds are used to acquire property, FEMA takes care not to duplicate benefits paid by one program with benefits from another source. This means that FEMA will require the community to subtract from the purchase price the amount of other assistance you, as the individual property owner, might receive for the same purpose. This assistance includes flood insurance and grants that are available to individuals. FEMA considers this assistance as an advance, or down payment, on your property should you choose to sell it. However, if you have receipts showing that the money was spent on its intended purpose, for example repairing your home to make it livable again, the community will not subtract that amount documented by receipts. Therefore, we advise you to save all receipts for repairs you have made.

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Advantages and Disadvantages
Individual property owners will want to weigh the advantages and disadvantages of property acquisition. The advantages of property acquisition include:

The process can be lengthy. Property acquisition is not an overnight solution. Applying for funds, waiting for approval, transferring funds, conducting appraisals and closings, etc. take time, especially if the project involves many properties.

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