3 areas of FEMA Individual Assistance program reforms

3 areas of FEMA Individual Assistance program reforms

Millions of Americans are affected by destructive weather and climate disasters every year. In 2023 alone, FEMA delivered over $1.3 billion in aid to disaster survivors for damage caused by wildfires, floods, storms, tornadoes, and other events.

One way for disaster survivors to get on the road to recovery is through funding from FEMA’s Individual Assistance (IA) program. The program covers necessary expenses and serious needs for millions of eligible individuals and families who are uninsured or need funding for under-insured expenses. While it’s not a substitute for insurance and will not compensate for all disaster-related losses, the program is a critical source of recovery funding for many Americans each year.

It's exciting to hear FEMA’s recent announcement of several reforms to the Individual Assistance program because the program has been known to be cumbersome, confusing, and time-consuming. The application process isn’t intuitive—for example, eligible individuals must apply for Small Business Administration (SBA) loans as a first step—and many components of the program required significant amounts of documentation.

The proposed reforms are effective for disasters declared on or after March 22, 2024. It provides new benefits and modifies many existing requirements to reduce red tape and complexity, speeding funding to impacted individuals and families.

Let’s take a look at the changes to the program and what they mean.

New benefits in the FEMA Individual Assistance program

Serious Needs Assistance will replace Critical Needs Assistance. It will provide households $750 to cover immediate expenses related to sheltering, evacuation, and meeting basic household needs. This is a one-time payment that will be available in all disasters to all eligible households. No request by the state is needed for this assistance to be provided.

Displacement Assistance, also a one-time payment, will provide eligible survivors with upfront funds to assist with immediate housing options of their choice until they can secure a rental option for their long-term recovery. This assistance will allow greater flexibility in how these funds can be used. For example, it can cover costs associated with staying with family and friends.

Changes to current IA program requirements

Cutting red tape

  •  Individuals impacted by a federally declared disaster will no longer need to first apply for SBA loans. This is a welcome change, as the need to apply for an SBA loan was confusing, protracted, and often resulted in delayed funding delivery.
  • Self-employed individuals will be able to receive some initial financial assistance to replace disaster-damaged equipment or tools that they need to perform their work. Previously, self-employed individuals were required to first apply for SBA assistance before being considered for federal assistance. Under this benefit, the assistance is subject to the federal annual cap ($42,500). SBA disaster loans may provide funding above this capped amount.
  • The application process for temporary housing will now require less documentation, remove barriers for late housing applications, and simplify the appeal process.
  • An individual who wants to appeal FEMA’s decisions will no longer need to provide a signed, written appeal letter to accompany the supporting documentation.

Expanding eligibility

  •  Pre-existing home damage may qualify for federal funding to repair the earlier damage to ensure the structure is safe and inhabitable. For example, a leaky roof that is further damaged in a storm may warrant funding for the entire roof— regardless of its previous state.
  • Homeowners not receiving sufficient funding from insurance may now receive up to $42,500 (2024 max) to cover costs not reimbursed by insurance. Previously, homeowners who received at least the capped federal amount were not eligible for federal assistance to cover underinsured rebuilding costs.
  • Individuals with disabilities may now use federal funds to improve home accessibility.
  • Survivors requesting approval for a late application no longer have to provide documentation supporting the reason for their late application.

HUD resources

The federal government may provide CDBG assistance to homeowners post a disaster. HUD-funded assistance is secondary, may be based on income, and is considered the funding of last resort. Some of the new benefits under FEMA are not income-based. FEMA funds would be an offset to any HUD assistance to avoid duplication.

Note that these reforms do not apply until March 22, 2024, and the changes only apply to disasters declared on or after this date. If you were affected by a disaster before March 22, 2024, be sure to continue following the old processes outlined by FEMA.

Meet the authors
  1. Susan West, Vice President, Risk Management and Insurance

    Susan (MBA, CRM, CIC) is a risk management and insurance expert with more than 30 years of experience assisting clients in insurance and risk-related matters, including disaster planning, business continuity, resiliency, and recovery from disasters. View bio

  2. Leslie Bean, Senior Director, Disaster Recovery

    Leslie (MPA, PMP) has over 16 years of experience with complex disaster recovery, housing, and grants management projects.

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