If your home has flooded more than once, you are not stuck. A buyout program can pay pre-flood market value, relocate you to safer ground, and convert your old lot into permanent open space. The catch is timing, paperwork, and fine print. Use this deep dive to understand how buyouts work, how offers are calculated, and how to decide if the deal makes sense for your family.
This guide covers program types, eligibility, how offers are calculated, timelines, taxes and relocation, common pitfalls, and a calculator to compare staying versus selling. It is written for homeowners who want clarity without policy jargon.
Program Types at a Glance
FEMA HMGP
Hazard Mitigation Grant Program funds local governments after a disaster. Purchases from willing owners, structures removed, land deed-restricted as open space.
FEMA FMA and BRIC
Flood Mitigation Assistance and Building Resilient Infrastructure and Communities can fund acquisitions outside disaster windows for repetitive loss areas.
HUD CDBG-DR Buyouts
Disaster Recovery grants managed by states or cities. Can add relocation help and equity rules. Often paired with FEMA programs to speed neighborhood moves.
Are You Eligible
| Requirement | Plain language |
|---|---|
| Voluntary only | You choose to participate. Programs do not force individual owners to sell. |
| Pre-disaster fair market value | Offer is based on value before the flood event that triggered the project. An independent appraisal is used. |
| Open space deed restriction | After purchase the land is reserved for parks, wetlands, or flood storage. No houses are built back. |
| Cost benefit test | The project must show that buying out is cheaper than repeated repairs and aid over time. |
| Community sponsor | Your city, county, or state files the grant and manages the process. You work through them, not directly with federal agencies. |
How Offers Are Calculated
Valuation and adjustments
- Appraised value baseline: pre-flood fair market value from an independent appraiser.
- Duplication of benefits: prior disaster aid tied to the same loss can be subtracted from the payout to avoid double payment.
- Improvements and liens: unpaid taxes, SBA loans, or mortgages are settled at closing from the offer amount.
What you do not get
- Replacement cost for a new home is not guaranteed by default.
- Future claims or insurance on the acquired lot end. The site becomes open space.
- Guaranteed timing is not promised. Many projects take multiple years.
Typical Timeline and Where Delays Happen
| Phase | What happens | Typical duration | Delay triggers |
|---|---|---|---|
| Project setup | City identifies area, surveys interest, hires appraisers | 3–9 months | Staffing, data, mapping |
| Grant review | State and federal review benefit-cost, environmental, title | 6–18 months | Environmental review, title issues |
| Offers and contracts | Appraisals, duplication of benefits checks, negotiations | 3–9 months | Appeals, missing documents |
| Closing and demolition | Transfer title, remove structures, restore site | 4–12 months | Utility disconnects, contractor backlog |
Your local sponsor can shorten delays with early appraisals, standardized documents, and batch closings.
Money Math: Stay vs Sell
Use this quick calculator to compare expected future flood costs to a likely buyout offer.
Your Numbers
This is a planning tool, not an appraisal. Offers depend on program rules and local valuations.
Taxes, Mortgages, and Moving
Mortgage payoff
The lender is paid first at closing. Ask your sponsor for a sample settlement sheet so you can see the flow of funds.
Tax basics
Buyouts are typically sales, not insurance proceeds. Keep every document. Speak with a tax professional about basis, gain exclusions, and any grants tied to relocation.
Relocation costs
HUD-funded programs may include replacement housing assistance or moving stipends. FEMA-only projects usually do not. Get this in writing.
Myths vs Facts
| Myth | Fact |
|---|---|
| Buyouts are mandatory | Participation is voluntary. You can decline an offer. |
| I can rebuild later on my lot | Acquired lots are deed-restricted for open space. No new dwellings. |
| I will be paid replacement cost | Offers are based on fair market value before the disaster, then adjusted for duplication of benefits. |
| Money arrives fast | Many projects take years from application to closing. Plan for interim needs. |
Questions That Speed Things Up
- Which funding stream is being used and what is the expected cost share
- What date will be used for pre-flood value and which appraisal method will be used
- What counts as duplication of benefits in this project and how is it verified
- Is any relocation or replacement assistance available from HUD funds
- What is the current project timeline by phase and where is my property in the queue
- Will there be group closings to shorten the schedule
Neighborhood Outcomes
Flood risk reduction
Removing repeatedly flooded structures lowers rescue, debris, and claims in future storms.
Open space benefits
Converted lots can store floodwater, improve drainage, and add parks or trails.
Equity considerations
Ask sponsors about support for low-income households so everyone can relocate successfully.
A buyout can be a clean exit from repeated losses, but the decision hinges on value, timing, and family needs. Compare your expected flood costs against the offer, get all terms in writing, and ask your sponsor for a step-by-step timeline so you can plan housing, finances, and school or work transitions with fewer surprises.
