September 26th and October 9th will mark the two-year anniversaries of Hurricanes Helene and Milton. But even twenty-three months after the destruction that both storms fiercely unleashed, there are still homeowners trying to recover. Although much of the Tampa Bay area, including Pinellas County, has rebuilt and rebounded, a substantial number of residents remain uncertain about their futures.
Just a casual drive through coastal neighborhoods along the Gulf and Bay reveals something most inland residents haven’t seen since the days and weeks following Helene and Milton: homes still eerily vacant; some remain in the same ransacked condition they were left in just hours after the storms hit. Neighborhoods like Shore Acres and those on the intracoastal remain stark reminders of what occurred and what has—or hasn’t—happened since.
Slow Recovery and Broken Promises
While the majority of homeowners have either recovered or moved on, a significant portion of property owners remain in surreal limbo. Help, they thought, was only a matter of days or weeks away, but it has dragged on for several inconceivable months. Insurance claims stuck in red tape, permits delayed or denied, and big-budget programs falling well short of their promises.
Elevate Florida, for instance, a $400 million, FEMA-funded initiative by the Florida Division of Emergency Management (FDEM), designed to help homeowners elevate, rebuild, or harden properties against storms, has been extremely slow in implementing and operating for those who previously qualified. But now, the program is no longer accepting applications, having permanently closed on April 11, 2025.
Despite overwhelming demand—with more than 12,000 applicants—roughly 90% of devastated property owners have been denied or have dropped out entirely. For the small fraction who were approved, the process moves at a glacial pace. Many affected homeowners report waiting a year or more for FEMA to review their applications and approve funding before they can even begin construction, a separate process that can take many months. However, this doesn’t mean their homes are rebuilt right away; it’s merely the beginning of a lengthy procedure that includes permit applications, permit fees, inspections, code compliance, and much more.
Bureaucratic Hurdles and the FEMA Rule
Municipal and corporate bureaucracies are among the biggest, most notorious culprits. Beach towns were clearly unprepared for such an unprecedented event. As a result, homeowners attempting to rebuild faced enormous challenges.
Making matters worse is the FEMA 50% Rule, which mandates that if the cost of repairs or improvements to a structure in a flood hazard zone exceeds 50% of the building’s value, the entire structure must be brought up to current Florida building and floodplain codes, often requiring the home to be elevated.
And that isn’t cheap.
It’s why mortgage broker Andy Wood of Titan Home Lending says the FEMA 50% rule should apply only to new construction and new developments. “Homeowners hit by the hurricanes must go through a pre-storm appraisal,” which is based on the home’s pre-storm value. And that means property owners are subject to even more requirements because it puts insurance companies in charge of the valuation, which is only based on the building itself, not the land. (Something quite difficult to estimate, especially if improvements were made and were not properly or thoroughly documented.) So, if a lot is worth $1 million but the home on it is worth just half, $500,000, the latter figure is what the appraisal is based on.
Since it can cost between $350,000 and $600,000, with all-in costs pushing toward $800,000 or more for a fully renovated, finished project, it’s financially prohibitive for most homeowners. (This is why, following the storms, cash buyers were the only ones who could afford to purchase and rehabilitate storm-damaged properties.)
Of course, insurance companies play a big role. Insurers send out adjusters to assess the damage and estimate the cost of rebuilding. And because adjusters work for insurance companies, their estimates aren’t necessarily in line with actual, realistic costs. Even in scenarios where property owners receive substantial payouts, they aren’t given an exclusive check. Instead, the checks are made jointly payable to the property owner and the property owner’s mortgage company. That’s right. The insurance companies make their checks payable to both the policyholder homeowner and the mortgage company holding the lien.
That puts many people in an infeasible situation. Owners of storm-damaged properties who elect to take the check are at the mercy of the insurance and mortgage companies. Worse, mortgage broker Andy Wood says, many property owners who can’t afford to rebuild are “… faced with selling at a loss, going into foreclosure, or agreeing to a short sale.”
Remember the earlier mention of permits? What shocks many hurricane victims is the lengthy laundry list of expenses and how costly these can be. “Permit fees alone are usually $3,000 and can run up to $10,000 after adding the architect and the structural engineer,” Chris Scardaci, a HUD Consultant, contractor, and home inspector, explains.
Mr. Scardaci, an individual with extensive experience in the construction industry and a certified HUD Consultant, explains that these situations are very demanding because several parties are involved, including the property owner, the mortgage holder, contractors, and more. And with funds being essentially controlled by the mortgage servicer, payments to contractors might be slow or contested. This can cause contractors to abruptly quit before finishing their work. Chris says, “The contractor just figures, ‘I’m not getting paid for this job; I’ll simply go to this other one where I can make some money.’” Of course, this leaves the homeowner in a real bind.
How to Get Around the FEMA 50% Rule
So, just how can property owners—or even first-time buyers—pay for such pricey repairs? The answer might be a renovation loan. Mortgage broker Andy Wood, who has personally used the product, says this and other types of financing are “A great way for homeowners to upgrade and stay in their properties.” That’s not all. Renovation loans, in particular, are also available to buyers seeking to purchase fixer-uppers.
Unfortunately, many buyers in the current market aren’t making an impression on sellers. Contractor Chris Scardaci says buyers often have their offers rejected in favor of cash buyers because sellers are leery of accepting traditional financing, which doesn’t account for repairs and improvements and comes with all kinds of lender conditions. Whereas renovation loans do account for all repairs and improvements. “So, sellers put regular buyer offers at the bottom of the pile, and cash offers on top.”
In fact, “reno loans,” as they’re called, lay out every detail. This means contractors are on line item budgets and must provide at least a 1-year warranty on any work or products, putting many home sellers at ease and giving them a more lucrative alternative to lowball cash offers.
What’s more, renovation loan borrowers can also finance 12 months’ mortgage payments to avoid paying rent and their mortgage at the same time, Andy Wood explains. Furthermore, this kind of financing isn’t only for single-family properties; condo owners affected by the storms or condo buyers who want to make repairs or improvements may also be eligible.
Real estate owners and buyers can borrow up to $832,750 over 15 or 30 years. These products are fixed-rate only, with no variable rate. They also have the same DTI, credit, and down payment requirements; the only difference is the repair escrow. However, the rates are competitive, usually just a 1/4 percentage point higher than those on other loans.
A Marketing Option for Storm-Damaged Properties Also Offers Financing for First-Time Homebuyers
But how do renovation or reno loans help stranded sellers? Well, these can be marketed in the MLS listing as a purchase option to attract buyers who typically offer substantially more than wholesale cash buyers or investment groups.
Andrea Peleaz of Premier Sotheby’s International Realty, a professional Realtor with 12 years of experience helping sellers successfully market their properties and buyers acquire their ideal homes, said, “The great part about this loan is that it allows the seller to sell as if it’s a cash offer. They don’t have to make repairs.”
In other words, it takes the financial burden off a seller to make repairs that would normally be required by mortgage lenders for buyers financing their purchase. It also gives sellers the potential to get a higher purchase price than investment firms or fix-and-flip real estate crews would offer, because they’ll try to buy as cheaply as possible to have enough to cover necessary repairs and improvements.
Realtor Andrea Peleaz explains, “For storm-damaged homes, renovation financing could include reconstruction, mechanical systems, kitchens, electrical work, plumbing, and resiliency improvements, appraisal requirements, and local building regulations, subject to lender approval. A renovation loan could also give hurricane victims and buyers an option beyond paying cash for the property and funding all reconstruction separately.”
In fact, Andrea has firsthand experience using renovation loans. In one recent transaction, she helped a seller get $15,000 more on the sale price and assisted the buyer in getting 6% back to help cover their closing costs. The new owner got a new roof, HVAC system, electrical and plumbing repairs, a renovated bathroom, and interior. About $43,000 in repairs and upgrades.
However, these three lending, construction, and real estate experts all agree that this type of financing won’t necessarily work for every buyer or seller. “Every situation is different. Even two neighbors who live right next to one another can be in very different circumstances,” Andrea says, explaining that one homeowner might have been in their house for the last 30 or 40 years, while the other just moved in a year or two before the storms.
Although, a renovation loan can provide help in many scenarios. These products are especially advantageous for buyers who spot a diamond in the rough. Buyers who can see a home’s potential that don’t have the cash resources on hand. Since these loans are based on the after-repair and improvement value, they allow buyers to get many items on their wish list. And for sellers whose homes have been listed well over the average days on the market, positioning their properties as prime candidates for renovation might just be the missing piece of the puzzle.
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