Natural disasters in the U.S. are increasing, causing billions of dollars in damage and impacting more people than ever. In 2018 the cost of hurricanes, wildfires, floods and other natural disasters was approximately $91 billion, according to the National Oceanic and Atmospheric Administration (NOAA). A recent FEMA study found that preparing ahead of disasters can reduce future costs and increase the speed of recovery. Similarly, homeowners are finding that preparing and renovating their homes for potential disaster, especially in some of the riskiest regions, can help them prevent some of the costly damage.

More Storms, More Damage and Costs for Homeowners

Homeowners across the U.S. are increasingly performing renovation projects to prevent home damage and promote housing resilience from natural disasters. In the South and Midwest, these types of renovations in 2016-2017 were nearly double the two-year average two decades earlier.

This uptick in renovations appears to correlate with that fact that the U.S. is experiencing more storms. According to research by NOAA, the number of annual highly damaging natural disasters has grown dramatically.

Furthermore, the U.S. housing stock is getting older. Of the nation’s 137 million homes, nearly 80 percent are at least 20 years old, and of those, nearly 40 percent are at least 50 years old.

These two trends together—increasing natural disasters impacting an aging housing stock—can result in expensive renovation costs for unprepared, new homeowners. Disaster-related improvement costs alone doubled from the late 1990s to today.

How Mortgage Professionals Can Help

With peak hurricane season upon us, lenders and other mortgage professionals may hold the key by providing financing options for renovations for those most likely to buy or live in aging homes, such as the elderly, low-to moderate- income and first-time homebuyers in urban and rural areas. Also, as more American families choose to live together across generations, renovation financing can offer opportunities to custom fit homes to accommodate occupants across wide age ranges.


For example, new flexible lending solutions make it easier and more cost-effective for homeowners to finance renovations, repairs and improvements. These renovation mortgages include features such as:

  • The convenience and cost savings for borrowers by financing their home purchases and renovation costs in single-closing transactions.
  • No cash-out refinancing help for current homeowners or those looking to purchase.
  • The ability for lenders to sell the loans during construction (with recourse and prior approval required) but before renovations are complete.
  • The ability for lenders to sell the loans after the renovations are complete without recourse.
  • Expanded eligible renovations, including housing resilience (to prevent and repair damage caused by natural disasters) and energy efficiency.


Lenders could have a far-reaching impact on this and other housing challenges simply by educating homebuyers on financing alternatives that make renovation possible for a broader segment of homeowners. At the height of the storm season, maintaining financial fitness for safety can also increase home value for years to come.


Learn more about other leading trends and issues affecting the mortgage industry.