MSD and FEMA Flood Home Buyout Program
Louisville MSD works with the Federal Emergency Management Agency (FEMA) to assist homeowners who wish to move out of areas affected by serious flooding. MSD applies to FEMA for grants to buy dwellings from interested homeowners in areas the agency believes would most benefit from the program.
How does the buyout work?
- MSD identifies areas where buyouts would be most beneficial based on the frequency and severity of flooding, flood insurance claims, customer requests, known limits of flooding, and proximity to other buyout projects.
- Participation by homeowners is strictly voluntary. MSD cannot include a home in a grant application without a signed interest letter from the property owner.
- Once a grant application area is determined, MSD submits an application to Kentucky Emergency Management Agency (KYEM). KYEM and FEMA determine whether to approve the application. The approval process typically takes 2-3 years.
- If the grant project is approved, the value of each affected home is established by a licensed appraiser under contract to MSD. A buyout offer is then made to each homeowner in the amount of the appraised value or the current Property Valuation Administrator value, whichever is higher.
- If the appraised value is disputed, a second appraisal may be performed at the homeowner’s expense. A third-party appraiser reviews the second appraisal.
- If the third-party appraiser accepts the second appraisal, the offer is revised to match the new appraised value.
- Properties are purchased at different times based on the progress of required individual negotiations.
- Relocation assistance is also available to renters after a property owner agrees to sell a home.
What happens after a buyout?
- Once homes are purchased by MSD, the structures are demolished and the property is deed restricted from future development as required by FEMA.
- MSD will maintain and mow the property twice per month during the growing season.
- Homes are demolished as they are purchased; however, a demolition permit is required for each home, so there is typically at least a two to three month waiting period between the time the home is purchased and the beginning of demolition.
How to participate in a future Buyout Program
If you are a homeowner who has been impacted by flooding and would like to participate in the buyout program, please complete and mail in the form linked here.