Staten Island still sputtering after Sandy
Expanded flood plain leaves many homes in limbo
Staten Island homeowners who have struggled in the five months since Hurricane Sandy to get federal disaster assistance are being urged to be patient just a little longer: Help, their city councilman told them, is on the way.
The weary homeowners heard the plea Saturday at a real estate forum, where city officials along with building and financial experts laid out options for relocation, federally subsidized mortgages, short sales and reconstruction as well as new FEMA construction guidelines for the borough.
City Councilman James Oddo estimated the money from Washington – for either selling or repairing storm-ravaged homes – would be coming in four to six weeks, sometime in May, if all goes as planned.
“It’s almost sinful, five months later, to ask you guys to have patience,” Oddo told the crowd at the meeting, sponsored by the Staten Island Board of Realtors.
For those hardest hit, the federal dollars should allow them to sell their homes to the government and move; homeowners who want to stay put will have to follow the FEMA guidelines, which limit how and where they can rebuild.
The new regulations call for residents to reconstruct their homes either on piles or on foundations above a new flood plain, said architect Glen Cutrona of Glen Cutrona Associates. A new flood plain map includes four zones – V, A, AE and X, he said.
In zone V, all new buildings and those “substantially damaged” that need to be rebuilt will have to be built on a pile-supported structure, Cutrona said, because they are subject to “wave action velocity” in future storms. New buildings in zone A do not have to be raised on piles, but their foundations must start two feet above FEMA’s new flood plain.
“We’re going to see reconstruction; we’re going to have to embrace it,” Cutrona said.
For others whose homes can’t be saved – or who don’t want to take on the expense of rebuilding – there are low-interest government financing options available, James Ustun of Continental Home Loans explained. The 203H federal disaster loan, for example, allows a buyer to get 100 percent financing at 3 percent to 4 percent on a home worth as much as $729,000; the money, though, can be used only for a single-family home or a Federal Housing Adminstration-approved condominium or co-op. There are very few FHA-approved condos and co-ops, as TRD has noted, because the Department of Housing and Urban Development changed the guidelines for FHA certification after the financial crisis, and many never bothered to comply, or did not realize they had failed to.
Owners who do qualify – the properties also must be within the FEMA-designated disaster area – need to be in contract on the new, qualified homes before Oct. 29 – the one-year anniversary of Sandy. The deadline means many residents will have to relocate, since there probably aren’t enough qualified homes on Staten Island.
Buyers who missed mortgage payments because of the hurricane should still be approved for mortgages through the program as long as they have a credit score of 520; those who missed payments before the hurricane may not be eligible, Ustun said.
Sellers, too, can expect major hurdles to getting any equity from their damaged homes. Some residents at the gathering are still waiting on payouts from their insurance companies, and others told the experts that appraisers had greatly undervalued their homes.
For the homeowners who disagree with the appraisers, there’s little they can do, said Henry Salmon of Equity Valuation Associates.
“The appraisal process is broken at the moment,” Salmon said, echoing the sentiment of many appraisers on the changes that the appraisal industry has undergone in the wake of the financial crisis. “The only thing you can do [after a bad appraisal] is get another lender.”
But outside interest has spurred many sales already, experts said, and homes continue to sell – simply at reduced prices, Salmon said.
“If things are listed properly, they are going very quickly,” he said.