Strategic Buyout Program Frequently Asked Questions Program Overview What is a buyout program? In the State of North Carolina, buyout programs are used by state and local governments to buy properties located in flood high-risk areas. Most buyouts in North Carolina have been funded by the Federal Emergency Management Agency (FEMA) through its Hazard Mitigation Grant Program (HMGP). The ReBuild NC Strategic Buyout Program is a different program, run by a different agency, but the programs have a lot of similarities. In both programs, properties are purchased from eligible property owners who voluntarily decide to sell their property. Once a property is bought out, it is then owned by the local government, the structures on the property are demolished, and the debris is cleared. A deed restriction is put in place so that no structures can ever be built on the land again. The local government is responsible for the ongoing maintenance of the site. What is the Strategic Buyout Program? The ReBuild NC Strategic Buyout Program is administered by the North Carolina Office of Recovery and Resiliency (NCORR). This Program coordinates with local governments to establish Buyout Zones and focuses our buyouts in distinct areas at risk for future flood damage. Our funding comes from the U.S. Department of Housing and Urban Development’s Community Development Block Grant – Mitigation (CDBG-MIT). What is a Buyout Zone? Buyout Zones, which are also called Disaster Risk Reduction Areas (DRRAs), are designated areas that have a history of repeated flooding and are at risk of flooding again in the future, according to Federal Emergency Management Agency (FEMA) flood maps. Buyout Zones are also concentrated areas of residential properties. The zones were determined through a data driven and collaborative process between local governments and NCORR. At this time, only properties located within Buyout Zones are eligible for the Strategic Buyout Program. Am I required to participate in the Strategic Buyout Program if my property falls within a Buyout Zone? No, the Strategic Buyout Program is entirely voluntary for eligible property owners, and property owners can voluntarily withdraw their application from the Program at any point up until closing. If a property owner decides to withdraw from the Program, no further action will be taken to purchase the property. The state will not use its power of eminent domain to buy properties under this Program. What should I do if I am interested in participating in the Buyout Program? To apply to the Strategic Buyout Program, we will have to verify that your property is in a Buyout Zone. You can call 833-ASK-RBNC (833-275-7262) or email email@example.com to speak to a Program representative to make sure your property is in a Buyout Zone. If you’d like to check to see where the Buyout Zones are, please visit our website. If I decide to apply, how long will it be until I can sell my property? The Program is dedicated to moving all our applicants through the process as quickly as possible. Throughout the Program’s lifecycle, you will have an assigned Case Manager, who will update you on the progress and be able to answer any questions you have about the process. What is the overall process to purchase and clear the property for the Strategic Buyout Program? The process for the Strategic Buyout Program has 8 steps: 1. Application Intake and Review 2. Preliminary Eligibility Review 3. Ownership Verification 4. Appraisal and Inspections 5. Offer Determination and Closing 6. Contractor Selection 7. Demolition, Clearance, and Restoration 8. Completion Most applicant interactions with the Program will end during Step 5, at the time of closing on the damaged property. Applicants who are eligible for incentives may apply for them within 9 months after the closing on the damaged property. After Step 5, the property is owned by the local government. The Program continues to work to demolish the home and perform the required hazard abatement (if applicable), and complete other administrative or audit functions after closing on your property. How does the Strategic Buyout Program support applicants with Limited English Proficiency or other Special Needs? If an applicant requests Limited English Proficiency or Special Needs Services, either verbally, in writing, or through an agent, the Program will provide these services without requesting additional documentation or verification through the Program’s 833-ASK-RBNC (833-275-7262) service. Applicants with disabilities and non-English speaking applicants can call 833-ASK-RBNC directly so that the Program can make accommodations for their specific situation. Los documentos del programa pueden ser traducidos al español a pedido. Se pueden pedir documentos traducidos por correo electrónico (firstname.lastname@example.org) o por teléfono (833-275-7262) o a través de su administrador de casos si tiene uno asignado. Eligibility What are the eligibility criteria for this Program? To be eligible for the Strategic Buyout Program: The applicant and/or co-applicant: Must be able to prove their identity by providing the Program with current and valid government photo identification, such as a driver’s license. Must have owned the property at the time of either Hurricane Matthew or Hurricane Florence and still own it today. Must be able to have clean, insurable, and merchantable title, which includes being able to pay off the liens against their property, such as their mortgage and owed taxes, at or before the closing of the damaged property. Must be current on any disaster recovery subsidized loans, such as those provided by the Small Business Administration (SBA), or enter into a repayment agreement. Must be able to meet the Program’s citizenship requirements. The applicant, co-applicant, or their minor child/ward must be a United States citizen, a non-citizen national, or a qualified alien. The damaged property: Must be in a designated Buyout Zone. You can find out if your property is in a Buyout Zone by checking the maps on our website, rebuild.nc.gov/buyout, or calling 833-ASK-RBNC (833-275-7262) or emailing email@example.com. Must have proof of being damaged by Hurricane Matthew and/or Hurricane Florence, such as an insurance claim, bona fide repair estimate, or documentation verifying physical losses. Must be an eligible property type. The Program is being conducted in two phases, with Phase I focused on the buyout of residential properties. Phase II will be initiated after substantial progress is made on Phase I and depends on the availability of funding. To find out if a Buyout Zone is in Phase I or Phase II, please reference the Buyout Zone maps on our website or call 833-ASK-RBNC (833-275-7262) or email firstname.lastname@example.org. Phase I property types are: primary residence and rental properties, and vacant lots where there was a primary residence or rental property on the parcel at the time of the storm. Examples of eligible property types include detached single-family homes, duplexes or tri-plexes, apartment buildings, or mobile or manufactured homes (where the owner owns both the land and the structure). For Phase I, the Program will only purchase five (5) rental properties owned by the same person or entity. All rental properties must provide proof that they were recently rental properties or certify to the fact that they were recently rental properties. Phase II property types are: second homes, non-residential properties, vacant land, Phase I eligible property types purchased after the qualifying event, and foreclosed properties. Properties must meet federal environmental review requirements. If the property is owned by a business entity, there are additional eligibility requirements. These requirements can be found online in the Strategic Buyout Program Policy Manual. Certain applicants may also be eligible to receive incentives, which have additional eligibility criteria. To find out if you may be eligible, please refer to our Incentive Overview. If you have any additional questions on eligibility criteria or the Program in general, please review the Strategic Buyout Program Policy Manual or get in touch with the Program by calling a program representative at 833-ASK-RBNC (833-275-7262) or by emailing email@example.com. Am I still eligible for the Program if I co-own property with additional owners? Yes, you may still be eligible, but all owners must consent to selling the property for the property transfer to occur. Am I still eligible for the Program if I have moved out of the damaged property? Yes, property owners who still own the property and who owned the residence at the time of the qualifying event may still be eligible for buyout. What is a qualifying event and how does it relate to my Strategic Buyout Program application? The qualifying event refers to the presidentially-declared disaster that impacted the damaged buyout property. For the Strategic Buyout Program, the qualifying events are Hurricane Matthew (October 8, 2016) and/or Hurricane Florence (September 14, 2018). The Program will determine the qualifying event for each Buyout Zone. This information can be found on the maps on our website or by calling 833-ASK-RBNC (833-275-7262) or emailing firstname.lastname@example.org. Some things to be aware of when it comes to the qualifying event are: The applicant and/or co-applicant must have owned the property at the time of the qualifying event, to be eligible for Phase I of the Strategic Buyout Program. If a Buyout Zone was affected by both Hurricane Matthew and Hurricane Florence, the qualifying event is Hurricane Florence. However, to meet the eligibility criteria for proof of storm damage, the applicant can provide documentation from either storm, and if the applicant is interested in applying for incentives, they may provide proof of primary residency at the time of either storm. Please note, that if the applicant is interested in applying for incentives, the Program will need to do a Duplication of Benefits analysis based on the qualifying event. The applicant will need to provide the Program with documentation on the disaster recovery assistance they received for the qualifying event so this analysis can be completed. What are some examples of ineligible property types? Contaminated sites, properties and/or structures with environmental findings, public housing and other government-owned or financed housing, and properties subject to restrictive covenants (unless permission is obtained to remove the restrictive covenant) are ineligible for this Program. I have applied to another program to be elevated, bought out, or reconstructed. Can I still apply for this program? If your recovery needs are being met by another program, such as the Hazard Mitigation Grant Program or ReBuild NC’s Homeowner Recovery Program, you may not be eligible for funding under the Strategic Buyout Program. If you applied for another grant program and did not receive assistance, or have withdrawn from that program, you may be eligible for the Strategic Buyout Program if all other Program eligibility criteria are met. If you are an applicant to the ReBuild NC Homeowner Recovery Program and interested in applying for the Strategic Buyout Program, you may be considered under both programs so long as you have not signed your Homeowner Grant Agreement in the Homeowner Recovery Program or your Initial Offer Package in the Strategic Buyout Program. What if I am found to be ineligible for the Program? If you or your property is found to not meet the Program’s criteria, you will be notified in writing of your application’s ineligible determination. In this determination, the Program will explain which eligibility criteria you or the property did not meet and will provide potential ways to satisfy those criteria, if applicable. If you do not agree with the ineligible determination rendered, you have the option to appeal. Am I allowed to appeal program determinations? You are permitted to file written appeals related to any Program determination that impacts your eligibility or the amount of assistance the Program will provide. During Step 1 (Intake), you will receive a copy of the Program Appeal Procedures, which explain your rights to an appeal, and how to file a Level I and Level II appeal. In order to appeal: You must first submit a Level I Appeal within thirty (30) days of receipt of a written program determination. If you need an extension to file, you must request an extension in writing. Your appeal is then reviewed for validity, timeliness, completeness – if additional information and/or documentation is required, an Appeals Team Member may contact you via telephone or in writing via a Request for Information. Once your appeal is considered complete, it is then submitted for review by the Level I Appeals Committee, which is impaneled by ReBuild NC representatives. Subject Matter Experts will also provide recommendations to the Level I Appeals Committee regarding a decision. Finally, the Level I Appeals Committee will render its determination, and you will receive notice of their decision in writing. If you disagree with the Level I appeal determination, you may submit a Level II Appeal in writing within thirty (30) days of the Level I Appeal Determination Letter. A similar review process will then be carried out before the Level II Appeal is then escalated to the Level II Appeals Committee for final review. The Level II Appeals Committee consists entirely of NCORR Staff. Once the Level II Appeals Committee renders its determination, you will similarly receive written notice of their decision. Please note that all determinations rendered by the Level II Appeals Committee are considered final. Offer and Incentives If I am eligible for the Strategic Buyout Program, how does the Program determine how much I may receive? The Program will do an appraisal to establish the current fair market value of your buyout property. After the appraisal has been completed, the Program will do other inspections, such as a lead-based paint assessment , asbestos inspection, and an environmental inspection. Once these inspections are completed, the Program will send an Initial Offer letter to eligible owners. This letter is a written offer from the Program to purchase the property at the appraised current fair market value. All property owners must accept this offer within 30 days to move forward and schedule the closing. Any liens, mortgages, or other financial encumbrances on your property will have to be paid off at or before closing to meet the eligibility criteria of having clean, insurable, and merchantable title. Buyout funds may be used to pay off these debts at closing if sufficient to cover these costs. In addition to receiving funds for your property, certain applicants may also be eligible to receive incentive payments. For more information on incentives, please review the Incentives section below, or the Incentive Overview. Do I have to be present at the appraisal? If so, why? The Strategic Buyout Program requires the applicant, co-applicant, another owner, or a designee to be present at the time of appraisal. This is to ensure that our appraisers account for all the things that make your property unique and accurately reflects any improvements you may have made to your property prior to applying to the program, to ensure the appraisal is accurate. What happens if I disagree with the appraised value of my property? The Program will notify you and all owners of the property of the appraised value of the property in writing. The Program will also provide you with appeals procedures, which help outline how to file an appeal. If you are appealing the value of your property, you must provide a second appraisal at your expense to justify the appeal. If the second appraisal is found to be acceptable by the Level I Appeals Committee, then the value of the program’s appraisal and yours will be averaged together for your final offer. However, if the second appraisal is found to be unacceptable, then the value from the program’s appraisal is used as the current fair market value of your property, and you will be notified in writing that your appeal has been denied. If you are not satisfied with this determination, you have the right to submit a Level II Appeal within thirty (30) days from the date of the Level I Appeal Determination. What if I have a large mortgage? Does it even make sense for me to apply to this Program? We encourage all interested applicants to apply to the Program. You are able to withdraw from this Program at any point up to closing for any reason. The Program can use the appraised current fair market value to pay off your mortgage and any other liens. If your mortgage exceeds your property’s appraised value, the Program may assist in a short sale negotiation with your bank. If the negotiation is successful, your bank will allow the sale and may release you from your mortgage for the agreed-to amount. In addition to a short sale negotiation, you may also be eligible for our generous incentive package. What is an incentive? An incentive is an additional financial payment to help encourage participation in the Strategic Buyout Program. Our incentive packages have been designed to help eligible participants in the Strategic Buyout Program move to a new, permanent residence in an area with a reduced flooding risk. Eligible participants can receive incentives in varying amounts depending on their location, unmet need, and individual circumstances. Program incentives have been designed to make sure that your new, permanent residence is affordable. So even if you are concerned that your damaged property may not be worth enough money to purchase a new home, or if you have a lot of liens against your damaged property, our incentives may make it possible for you to be able to move to a new, safer, more affordable home. Where can I get more information on incentives? Please refer to our Incentive Overview. Duplication of Benefits What is Duplication of Benefits? A duplication of benefits (DOB) calculation is required by federal law to ensure that disaster recovery benefits are not paid multiple times to an applicant for the same purpose. For the purposes of the Strategic Buyout Program, applicants will be required to disclose all disaster assistance they have received from any source, such as flood insurance, FEMA, or the Small Business Administration, so that the Program can determine whether there is any duplication between that assistance and the assistance provided by the Program’s incentives. Will the DOB review impact the price paid for my property? No, the appraised current fair market value of your property is not considered a “benefit” to you, so a DOB review is not conducted for the value of the property. If you apply for incentives, it is possible, that if you received assistance for the same purpose as our incentives, the necessary DOB review could impact your incentive amount. Other Frequently Asked Questions If I am approved for the Buyout Program, does my rental home need to be vacant before I can close? Yes, all properties must be vacated no later than 48 hours before the scheduled closing date and time. Should I evict my tenant now if I am going to participate in the Strategic Buyout Program? No, evicting a tenant to vacate your property may jeopardize your ability to participate in the Strategic Buyout Program. Tenants have rights under the Uniform Relocation Act. The Program is required to give eligible tenants notice of the impending sale and need to move. Relocation Specialists will be assigned to tenants to assist eligible tenants with relocation advisory services, rental assistance payments or down payment assistance, and/or financial assistance to help the tenant move. If you have any questions regarding your tenant, please call 833-ASK-RBNC (833-275-7262) or email email@example.com to speak with a Program representative. I have been denied assistance due to ineligibility. What do I do now? You will have the right to appeal any Program determination within 30 days of date of that written determination. Extensions to this deadline are available upon request and after review and approval by the Level I Appeals Committee. My case manager informed me that I was withdrawn – I never indicated that I wanted to withdraw. Why was I withdrawn? You were withdrawn because you failed to keep in contact with the Program. You have an obligation to keep the Program informed of current contact information and to update your records if your situation changes. The Program makes every attempt to remain in contact with you and advise you of additional information needed. If you show a pattern of ailing to respond over four consecutive weeks to the once-a-week communications from your intake specialist or case manager, the Program will make due diligence communication efforts, and if you are unresponsive or fail to provide the necessary documentation to move forward, you may be involuntarily withdrawn. If you want to contest this determination, you must appeal within 30 days of the written decision. I realized after reviewing my application with my case manager that this is not the Program for me, and I have an interested buyer who can close immediately. How do I withdraw? You can voluntarily withdraw at any point in the process until closing. You may fill out a Voluntary Withdrawal Request Form and submit it to your case manager, providing your reason(s) for withdrawal. I am going to be out of town during the next several months. I still want to participate and do not want to be withdrawn during my absence. Can you accommodate this? Yes. Much of the process can be completed remotely using your mobile device or personal computer. You can appoint a trusted person/entity as your Power of Attorney to act on your behalf during your absence. The Strategic Buyout Program is also capable of working with you remotely, and you can arrange special accommodations in advance by speaking with your intake specialist or case manager. What happens if there are more applications than funds to award? Unfortunately, the Strategic Buyout Program may not be able to serve all applicants due to limited funding. What can I do if I know that someone has submitted a fraudulent application to the Buyout Program? The Program has a strong anti-fraud, waste, and abuse policy. If you have any suspicion of fraud, please do not hesitate to report it. You can report or submit a complaint of fraud, waste or abuse to the North Carolina Office of State Budget and Management or the U.S. Department of Housing and Urban Development, Office of Inspector General, Fraud Hotline. Why do you need such personal information as my race, ethnicity, and gender? I do not want to disclose these items to the government. These are required for quarterly reporting by the Program to the federal government for Fair Housing and Equal Opportunity purposes to work toward the goals of eliminating housing discrimination, promoting economic opportunity, and achieving diverse, inclusive communities. If you do not wish to answer these questions, you may mark “I do not wish to answer” on the application. How is the ReBuild NC Strategic Buyout Program different from other buyout programs? The ReBuild NC Strategic Buyout Program offers buyouts in specific, concentrated areas, called Disaster Risk Reduction Areas (DRRAs), or Buyout Zones. Together with local governments, the Strategic Buyout Program has identified high-risk areas in certain Hurricane Matthew- and/or Hurricane Florence-impacted counties that are at the greatest risk of damage from future flood and hurricane events. Only property owners in these designated Buyout Zones are eligible for assistance. Additionally, the Strategic Buyout Program is a voluntary program. This means that the program will not purchase properties by use of eminent domain. What are CDBG-DR and CDBG-MIT funds? CDBG-DR stands for Community Development Block Grant – Disaster Recovery, and is a grant that is appropriated by the U.S. Congress and allocated by the U.S. Department of Housing and Urban Development (HUD) after certain major disasters in states and local governments to help them fund their recovery from those disaster events. CDBG-DR programs generally include housing repair and development, infrastructure, economic development, public services, and planning activities. CDBG-MIT stands for Community Development Block Grant – Mitigation, and is similar to CDBG-DR funding, but funds are allocated for the purposes of mitigating against future disasters (e.g., flooding). CDBG-MIT funds can similarly be used for infrastructure, housing, and economic development, as long as the funds are geared toward keeping citizens safe from future disasters by enhancing existing mitigation and resiliency efforts at the state and local levels. What happens with a property once it is bought? After a property has been purchased using Program funds, the local government becomes the legal owner. The Program will demolish any structures, clear debris, and restore the property to its natural condition (e.g., green space for parks) or an area that can help mitigate the effects of future floods. The Program puts a deed restriction on the property so it can never have another structure built on it. Why demolish structures instead of elevating and/or rebuilding them? Buyout programs provide several disaster recovery and mitigation solutions: aiding at-risk property owners, improving the natural functions of flood plains, reducing flood risk and repeated damage to developed areas, and contributing to a program that can offer savings on local flood insurance premiums. North Carolina hopes that by providing disaster-stricken property owners with the financial resources to move into reduced risk areas, communities will not to suffer such a tremendous loss of property and life in the face of the next flood event. By demolishing these structures and returning the land to open, green space, the property can naturally absorb and retain storm water, reducing runoff and flooding into surrounding residential communities. In addition, this reduces the demand on public resources and prevents the local economy from being disrupted due to recovery needs. The Strategic Buyout Program is being implemented in other at-risk communities as a better, more cost-effective use of taxpayer funds than repairing structures that are at high risk of being flooded again. Finally, as a flood mitigation measure within your community, a buyout program can contribute to reduced yearly flood insurance premiums. Programs such as this one can result in an automatic 5% to 45% discount on flood insurance premiums if your community is part of the National Flood Insurance Program’s Community Rating System. What costs does the Strategic Buyout Program cover? CDBG-MIT funding covers the purchase of the home, as well as appraisals, surveys, title preparation and title insurance, limited services to assist applicants with title clearance (for certain title issues), and relocation assistance for any eligible tenants occupying the property. In addition, Program funds cover the costs of securing the property, demolition, site clearance work, and lead-based paint and asbestos mitigation/remediation. What costs does the Strategic Buyout Program not cover? The Program will not cover the costs associated with a second appraisal (for example, if submitted as part of an appeal). In addition, moving and storage costs are not covered by the Program. The Program also cannot pay more than the property’s appraised current fair market value or the Federal Housing Administration (FHA) lending limits for the applicable county, whichever is less. Finally, if a portion of the buyout funds are used to retire (i.e., pay off) any outstanding property taxes, mortgages, or other liens at closing, the Program cannot pay you more than the current fair market value less the value of those liens to be retired.