With more than 20 named storms and several anticipated major hurricanes this year, experts are signaling another above-normal hurricane season. An active, costly hurricane season could hinder the fragile post-pandemic economic recovery, making it more critical for lenders, servicers, and others in the mortgage industry to reduce the impact of storm damage on people and property.

Guiding homeowners before and after a natural disaster is a critical part of sustainable homeownership.

Part of that is having frequent conversations about the advantages of storm-ready home renovations, particularly in hurricane-prone areas.

Before the Storm

The potential costs from storm damage are staggering. According to a recent CoreLogic report, more than 31 million homes with nearly $8.5 trillion in replacement cost value (RCV) have moderate or extreme risk exposure to hurricane winds. This makes planning for hurricanes and other natural disasters an ongoing effort that centers around helping homeowners be more resilient in the face of frequent major storms.

Homeowners tend to pay more attention to disaster preparation advice when storms are looming, making it the best time for lenders to share urgent information such as:

  • Links to reliable information from hurricane experts like ready.gov/hurricanes.
  • Reminders to update account information to utility companies and other services, including a forwarding address in case they leave their homes.
  • Contact information if they have questions about their mortgage.

After the Storm: Helping Homeowners Reduce Financial Loss from Storms Now and Later

After any major storm or hurricane, people are often left to deal with the financial fallout. Aging homes in lower-income areas are particularly vulnerable to hurricane losses. Anticipating some of the problems homeowners may face and proactively communicating with them is highly recommended. For example, the Consumer Financial Protection Bureau has compiled information that identifies some common mortgage and other financial problems encountered after a hurricane. These include understanding:

  • Mortgage forbearance and other disaster relief options.
  • How insurance funds will be distributed before hiring contractors for repairs.
  • How to recognize and report fraud like scammers who offer loan modifications or home repairs for upfront payment.

Home Renovations Can Help Homeowners Prepare

Affordable renovation financing solutions can help homeowners protect and keep their homes. In fact, it is one of the most effective tools in a lender’s toolbox. Renovations can happen well in advance of hurricane season and often provide good protection and return on their investment. These include:

  • Installing storm shutters or storm drainage upgrades
  • Retrofitting with impact-resistant windows.
  • Building a steel-enforced safe room.
  • Upgrading garage doors that can withstand 140 miles-per-hour winds or higher.

Renovation mortgages can fund all or a portion of necessary home improvements, both minor updates as well as larger renovations.

Whether borrowers are looking to repair a home they intend to purchase or upgrade their current living conditions, renovations can increase the value of their homes while making them safer and more secure.

Such mortgages:

  • Allow financing the cost of major and minor renovations with a single-close mortgage.
  • Can be combined with low-down payment and solutions that allow for greater equity extraction for home improvements.
  • Provide for financing of housing costs to temporarily rent elsewhere while their home is being renovated.

The new CHOICEReno eXPresssm mortgage is designed to finance small-scale renovations with a single-close mortgage. It is a smart choice for resiliency improvements like new windows, shutters and doors as well as cosmetic fixes like painting, new shingles and minor remodeling. For larger upgrades like a new roof or finished basement to use as a storm shelter, those in hurricane-prone areas may select the CHOICERenovation® mortgage.

With damaging hurricanes becoming more frequent and larger swaths of the country impacted by wind and flood damage, protecting homeowners from the resulting financial losses should be a priority for the entire mortgage industry.