Reviewing the spirit and intent of the duplication of benefits changes made on the federal level and how state agencies are using them.

As published in FR-2019-06-20 describing the duplication of benefits (DOB) calculation framework.

Each applicant requires review of all federally secured assistance received to assure that no funds for the same service are provided more than once. The applicant includes individuals, businesses, households and others who the state (grantee) offers HUD CDBG-DR assistance and also administrates the grant funding.

The grantee (state) agency much determine that the CDBG-DR grant assistance for one program or category does not overlap another source of assistance. The grantee much review each applicant and make the determination of the amount of assistance if any could be a duplication. When multiple sources fund for the same program one of the amounts of the source has to be recaptured and should be recaptured by the agency that delivered the grant award.

One example is if you received homeowners insurance payment for your home and also received FEMA individual household program (IHP) assistance for temporary repairs most state agencies will list that as a duplication if benefits even if FEMA lists the repairs are temporary and your insurance is for long term final repairs. Your state agency could ask FEMA for a waiver of all IHP grants so that future assistance for unmet needs do not conflict with the earlier grants awarded. Typically your IHP grant would be awarded in the first 90 days of the disaster and only be a fraction of what is needed for full repairs. This is why FEMA claims to offer temporary repair grants so you can make necessary repairs to your home so you can occupy the home. HUD CDBG-DR Grants which are designed to fund all unmet or unfunded damages related to the disaster. HUD CDBG-DR grants typically are awarded 12 months from the date of the declared disaster and you are not informed about how to manage the duplication of benefits until the eligibility screening starts 12 plus months later for the HUD program.

FEMA policy is not to advise you of any other assistance outside of the SBA Disaster Assistance Loans. The federal sequence of disaster assistance from FEMA goes directly to SBA then back to FEMA. After that, FEMA will advise you to contact local charities if nothing else.

Your local charities are funded directly from HUD for most all sheltering programs to include you state housing commissions managed by your states executive branch of government. The executive branch is under no obligation to assist you with housing even if they have funds from HUD available. The state with your local federal representatives will talk about how they are waiting on federal funding and that their hands are tied. Even while HUD who goes to work the same day of the declared disaster offers rental assistance and mortgage assistance right away. You're more accustom to hearing deferments on your mortgages and not mortgage assistance that actually pays your mortgage while you are paying rents elsewhere. You would not be able to qualify for both rental assistance and mortgage assistance because that would be a duplication of benefits for housing. But you could argue the loss of a job caused you not to be able to work and pay your mortgage and you needed temporary rental assistance because of the substantial damages to your primary residence.

To be successful with your recovery and to not be penalized for any duplication of benefits you must ask yourself and really take a vigilant stance on not spending any grant or awards on anything other than what they were intended for. So no down payment on a good used car after a flood with your FEMA IHP money. You will have to pay it back if you need additional funds later or if you are audited by your local municipality and FEMA.

If you are awarded $30,000 from FEMA for IHP and have a home that is substantially damaged you know that $30,000 will not complete repairs so you much not spend it until you have all the funds to complete needed repairs for your home to be completed. Add your insurance into the mix and if your policy is not at it's maximum payout find a lawyer that will get you every last dine. Then, after the lawyer takes their 35% of the additional funds look into your Increased Cost of Compliance (ICC) funds, another $30,000 or so is available to mitigate and to cover items not covered by FEMA IHP and your homeowners insurance. Now you could be finding just enough money to complete your repairs. This is the fastest method of recovery and typically happens all within 90 to 180 days of the major disaster.

If additional funds are needed you can always revisit the SBA Disaster Loan offer you didn't accept nor did you decline when you were told by FEMA to apply for an SBA loan. The goal for FEMA is to pass the disaster debt burden to the household via a long term federally insured loan. The SBA Disaster Loans are bundled by marketing people and have a great feel to them, as long as you don't mind paying the loan off overtime then this might be an option. But before that, always max the grants and insurance claims before getting loans.

Loans are not always easy to get after a disaster. If you were told that your retirement funds, savings, personal loans, local bank loans would all be reimbursed 24 months after the disaster would you still go for an SBA loan of 30 years? No, you wouldn't, it's easy to calculate that if you used retirement funds and you're told by your state agency and the governor that all of you who are retired and used your 401K would be reimbursed 25%, 50% and 100% of your total draw against your retirement. This is a very eligible activity and is not a duplication of benefits at all. You just have to do a little research and find out if your current governor is going to allow for reimbursements. If you're in Louisiana this is almost a 100% done deal for your reimbursement of any funds not secured by the federal government. And even then, if you don't mind waiting you might have your SBA loans paid off because of your congressional representatives working the system in Washington D.C.

As you progress with your recovery, documenting your material losses, out of pocket expenses, funds you have received from federal or state agencies, etc. You'll start to see with careful planning and money management you can reduce your overall disaster debt burden. But you can't just rush things, you must be willing to take your time and do things that are justified.

Example of a homeowner who's home was substantially damaged and did not have enough insurance to cover repairs or the construction of a new home. Also, no SBA loan was offered and local credit was not available in the amount needed. This household had to use rental assistance and wait for the state to develop a program that would assist. This program by the state can take 1 to 4 years to develop and the state only has a total of 6 years to award grants and finish or close out the programs. So take the path that works best for your household, typically the path that leaves you with just empty pockets, not bankrupt.

Research Resource: FR-2019-06-20