Many communities participate in federal grant programs for which on-site protection of private property is an eligible activity. Programs that do not specify "flood" in the title or description can be used to reduce future damage from high wind, earthquake or other hazards. These programs fund such flood damage prevention measures as elevation or relocation of floodprone buildings, purchase of floodprone properties, and, for non-residential buildings, dry floodproofing. Drainage improvements are also eligible.

The two primary federal funding sources for hazard mitigation are the Hazard Mitigation Grant Program (HMGP) and the Pre-Disaster Mitigation Program (PDM). In addition, for floods only, there is the Flood Mitigation Assistance Program (FMAP or FMA).  All three programs are administered in a state by the state hazard mitigation office; this is often in the state's office of emergency preparedness, but may be elsewhere. Both provide 75% of eligible project costs; 25% non-federal funds are required. Non-federal funds may come from the state, community or property owner. All projects must be economically justified.

HMGP is a post-disaster funding program; funds are available only after the state has received a Presidential disaster declaration for a disaster. Applicant communities do not have to be in a declared county. The size of the mitigation fund can be as much as 7.5% of the federal share of certain disaster costs; bigger disasters generate bigger pots of mitigation money for the state. A state or community that has a FEMA-approved Hazard Mitigation Plan may qualify for funding at up to 20%, rather than 7.5%.  There have been attempts in 2003 and 2004 to do away with the HMGP in favor of PDM.

PDM  Through the Disaster Mitigation Act of 2000 (DMA2000), Congress approved creation of a national pre-disaster hazard mitigation program to provide a funding mechanism for all hazards that is not dependent on a Presidential disaster declaration.  For FY2002, $25 million was appropriated for the new grant program. For FY2003, $150 million was appropriated, with a priority being established to mitigate repetitive loss structures (those that have filed multiple flood insurance claims).

FMA is funded annually by congressional allocation and is distributed among the states in proportion to their number of flood insurance policies and claims. The Flood Insurance Reform Act of 2004 raised funding of this program from $20 million per year to $40 million per year beginning in 2005.

For all three of these programs, funds go ultimately to the county or local community, which must administer both the funds and the mitigation project. Individuals cannot apply directly to the state or federal government for these funds, they must apply to their county or local government.  In DMA2000 Congress also stipulated that in order to qualify for hazard mitigation project funds state and counties must have a FEMA approved (DMA compliant) hazard mitigation plan. The effective data for this requirement was set originally as November 1, 2003, but was extended first to November, 2004 and finally to May, 2005.

SBA disaster mitigation loans to individuals 

Individuals who obtain disaster recovery loans from SBA can increase the loan by 20% to cover work undertaken to prevent damage from a similar disaster. 

SBA pre-disaster loan program for businesses

SBA is also administering a 5-year pilot pre-disaster mitigation loan program for businesses only (not homeowners). The purpose of the Pre-Disaster Mitigation Loan Program is to make low-interest, fixed-rate loans to eligible small businesses so they can can take steps to prevent damage from future disasters. Although pre-disaster loans from SBA will require a consistency statement from a state or local emergency management coordinator, the application is filed directly with SBA, not through county emergency managers.

For more information, see this SBA Disaster Assistance page.

The National Flood Insurance Program (NFIP) flood insurance policy provides "Increased Cost of Compliance" (ICC) coverage except on condominium and group policies. ICC is basic coverage, not an optional rider; so if you've got NFIP insurance, you've got ICC coverage, whether you asked for it or not.

This coverage pays up to $30,000* toward the cost of making an insured structure compliant with the local flood damage prevention ordinance, when compliance is required by the community.

Under the original rules, which are still current, for you to benefit from this coverage, the following must happen:

1. You must have flood insurance on the building.

2. The building must be in an A or V flood insurance rating zone (not B, C, or X).

3. The building must flood and must be substantially damaged by the flood. Substantially damaged means the cost of repairing the building to its pre-flood condition equals or exceeds 50% of its pre-flood market value (not including the value of the lot). The 50% figure may be lowered by local ordinance and, since passage of the Flood Insurance Reform Act of 2004, the policy will recognize the lower threshold for honoring claims.

4. The local floodplain administrator must declare the building to be substantially damaged and must enforce the ordinance that requires substantially-damaged properties to be brought into compliance. Compliance means the building meets the standards for new construction.

5. The local government must issue a permit for the floodproofing activity and inspect and certify its completion.

If your community were to change its flood damage prevention ordinance and require compliance when the substantial damage occurs over two floods (instead of all in one flood), more people would qualify for the coverage. But, under such an ordinance more people would probably be required to elevate when there is no coverage (because the damage was caused by wind or fire). Thus, there has been little pressure from citizens for their governments to make this change.

Consider whether you are likely to qualify for this coverage, and remember that the $30,000* is YOUR money. It can be used as the non-federal match for a federal grant program.

The Flood Insurance Reform Act of 2004 changed the provisions of ICC so that policyholders can claim ICC coverage when accepting an offer of flood mitigation from one of the federal mitigation programs. It is not known how long it will take for FEMA to effect this change in the flood insurance policy or when policyholders will be able to take advantage of this change. When filing a claim based on a mitigation program offer, elements b, c and d, above, will no longer be required. However, the rules for filing when substanially damaged will probably be as they are now.

FEMA Web page for Increased Cost of Compliance

*  This coverage limit was raised May 1, 2000 to $20,000 from being set originally $15,000. The effective date for the $30,000 limit is May 1, 2003.

With the Flood Insurance Reform Act signed into law on June 30, 2004, Congress authorized two new programs that will provide an additional $50 million per year to mitigate specifically those properties that are causing a drain on the National Flood Insurance Program. FEMA will need to develop rules for its implementation; state and national floodplain officials and their associations will be working with FEMA through this process. 

The legislation improves existing mitigation programs and introduces two new flood mitigation programs that will help thousands of property owners whose properties flood repeatedly. By reducing the claims being paid on these repetitive loss properties, the legislation will benefit all owners of flood insurance policies, who will see premiums rise at a slower rate.

There are circumstances under which a property owner who refuses mitigation assistance may see an escalation in flood insurance premiums.

To obtain the text of the legislation, google "Flood Insurance Reform Act of 2004"

Many states have mitigation assistance programs.  Some local governments also fund mitigation.  The state hazard mitigation office or your governing body would be a good place to inquire about such programs. There may also be insurance or tax incentives for hazard mitigation; the state insurance commission would be aware of such incentives.

In the case of flood mitigation, two studies have been done under contract to the Corps of Engineers. The first was published in 1994 as "Local Flood Proofing Programs"; the second was not printed formally, but is available as PDF.  Both can be accessed on the web site of the Corps of Engineers National Nonstructural / Flood Proofing Committee.