White House Spotlights Innovative Financing for Resilience

white houseA recent White House Forum on Smart Finance for Disaster Resilience looked at strategies for incentivizing pre-disaster mitigation and innovative financing options – and gave NAHB a chance to emphasize that any solutions be based on sound science and ensure that consumers can still afford to get a mortgage.

The forum was a follow-up to the White House Conference on Resilient Building Codes held in May.

Participants included officials from the White House Council on Environmental Quality, Treasury, FEMA, resilience state and local government officials, the insurance and mortgage industry, and organizations developing building codes and design standards.

Five breakout sessions explored various categories of incentives, including tax credits, insurance premium reductions, resilience bonds and mortgage rate incentives.

NAHB staff participated in the breakout sessions on insurance premium reductions and mortgage rate incentives. Staff highlighted the need for any resilience initiatives to be based on sound science, be cost-effective and represent broad industry consensus. In addition, incentives should be sufficient to ensure home owners can still qualify for a mortgage and afford the home they desire.

Other participants highlighted challenges to financing for resilience, including state regulation of insurance rate increases that constrain companies from offering discounts, treatment of mitigation grants as taxable income and regulatory limitations of federal funding sources.

More initiatives, including a planned FEMA “disaster deductible,” are expected to be introduced later this year, and several current federal, state and private programs offering a variety of incentives for mitigation activities were highlighted:

RainReady. Developed by the Center for Neighborhood Technology, this program encourages home owners and communities to reduce runoff and improve drainage from and around houses, driveways, parking lots and other impervious surfaces, thus minimizing moisture damage to houses and the risk of flooding.

In Cook County, Ill., the Metropolitan Water Reclamation District offers grants to help offset the cost of the necessary landscaping and building services.

Colorado Wildfire Mitigation. Colorado offers a deduction from federal taxable income for home owners who implement wildfire mitigation measures, such as creating defensible space around the home or using fire-resistant roofing. The deduction is 50% of the cost of the mitigation, $2,500 or the home owner’s taxable income, whichever is less.

MyStrongHome. Being piloted in Alabama and South Carolina, this program provides a one-stop shop for home owners interested in mitigation. It connects home owners with contractors experienced in the IBHS FORTIFIED program and insurers offering discounts for houses built to the FORTIFIED criteria.

HUD resources. Participants noted a number of existing HUD programs that can be used to pay for mitigation efforts, including PACE bonds, 203(k) rehabilitation mortgage insurance and FNMA HomeStyle renovation mortgages.

For additional information about NAHB’s participation in this forum, contact Vice President of Construction, Codes and Standards Neil Burning at 800-368-5242 x8564.


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