Rising Above the Floods: Finding the Money

Patricia Skinner, Baker, Eugene  |  8/15/2016 6:03:09 PM

Finding the Money

The cost of elevating a slab using this method, from planning through landscaping, will usually be about half the cost of rebuilding. At the time the Denham Springs project was implemented, no pre-disaster floodproofing funds were available to individuals, but government funding programs were being discussed. Extension offices will be a source of information on any funding options which become available. Since none of the funding programs being considered will cover the complete cost of an elevation project, you’ll need to finance at least a portion of the cost.

If you need to borrow money, consider a home improvement loan. Such loans can be made up to 75% of an approved appraiser’s projected value of the improved (elevated) home. Home improvement loans secured by the equity of your home usually have lower interest costs than other types of personal loans or credit cards. Compare the Annual Percentage Rate (APR) and closing costs of any loans you consider.

If you have considerable equity in your home and carry a first mortgage loan, you may prefer to refinance the existing mortgage loan into a larger loan. The finance costs (interest, points, etc.) of loans secured by your home may be tax deductible. If the property is securing a Small Business Administration disaster loan, SBA may subrogate its loan in favor of a new first mortgage for flood proofing. SBA also makes substantial elevation loans in special post-disaster situations.

Since the elevation of the slab procedure has been demonstrated successfully on Louisiana homes and floodplains, lenders should be able to justify and make loans for elevation projects but may require documentation such as contractors’ plans and specifications and appraisals.

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