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Improvements and the 50% FEMA Rule Appraisal

Downtown Tampa Florida

Make the most of coastal living in the Tampa Bay Metro Area by learning about the 50% FEMA Rule and how it affects you as a property owner.  

What is the 50% FEMA Rule? 

The 50% FEMA Rule covers damage assessment guidelines established by the Federal Emergency Management Agency [FEMA] and enforced by the Building Code Official. It is applicable to all structures within special flood hazard areas (SFHA), particularly A and V zones.  

IRMI defines SFHAs as areas that have a >1% chance of being inundated by flood on any given year.

Communities in a designated A Zone are typically situated near a body of water, such as a lake, stream, or river and are therefore vulnerable to rising waters. Flood insurance is usually mandatory in designated A zones due to the high likelihood of flooding. 

V Zones usually encompass rows of beachfront properties that are closest to the water. These properties are vulnerable to storm-induced wave velocity that can cause physical damage. For this reason, flood insurance is mandatory in all V Zones.

The FEMA guidelines were established to ease the burden of repetitive loss flood claims on the government agency. 

The Substantial Damage or Improvement Rule requires that structures located within SFHAs must be sufficiently elevated and made compliant in the event that repair costs owing to damage amount to 50% or more of their market value, especially if these structures have non-compliant elevation or are non-compliant with existing building codes for new construction.  

Appraisals and the 50% FEMA Rule

FEMA may offer financial assistance to eligible homeowners who need to elevate their homes although there is a cap and the process to obtain funding can be a lengthy and complex one. 

The agency limits the cost of improvements such as repairs and additions to non-conforming structures or structures below base flood elevation, to just under half or 50% of the structure’s value prior to sustaining damage and before any repairs or alterations have been made.  

When evaluating structural damage, only the market value of the structure (also known as Building Value) is taken into consideration. The value of exterior improvements and the underlying land are not included in the final calculation. 

To calculate the FEMA 50% Rule Value, some counties rely on the property appraiser’s value for the structure. Many jurisdictions also allow property owner to obtain their own appraisal in determining Building Value. 

In Florida, you can hire a State Certified Appraiser to calculate Building Value. 

If you’re thinking of having improvements made, you must first determine if your property falls within an SFHA, and whether it falls under an A Zone or V Zone. For this, you can refer to Flood Insurance Rate Maps (FIRM), which helps homeowners assess flood risk in their area. Hillsborough County lets you determine your Flood Zone with this online tool.

You can also obtain an Elevation Certificate (EC), which allows you to understand your property’s base flood elevation (BFE), designated zone, and other relevant information.

The Ambrosio Real Estate Team can help you navigate the rules and regulations affecting Tampa Bay Metro Area real estate. You can message the team here. You can also reach out at 727.433.0372 and info(at)waterfronttampabay(dotted)com.