The Department of Housing and Urban Development historically sells foreclosed homes stemming from federally insured mortgages, offering many first-time buyers their opportunity to achieve homeownership. A new report from NPR, however, is highlight negligent reporting on a number of said properties, including homes located in flood zones.
According to NPR analysis, of the tens of thousands of homes sold over a nearly four-year period by HUD, a handful of states stand out as hot spots.
Homes that were sold by HUD between January 2017 and August 2020 are in federally designated flood zones at almost 75 times the rate of all homes sold nationwide in that period.
Louisiana, Florida and New Jersey stand out as hot spots. More than one-fifth of homes sold by HUD in Louisiana were in flood plains. In Florida, it was about 12 percent of homes sold by HUD, and in New Jersey, 7 percent. In comparison, Zillow’s records show that 0.1 percent or less of all homes sold in these states are in flood zones.
In many cases, buyers of HUD homes get less information about flood risk and the cost of flood insurance than if they were to purchase the house from a private seller.
Neighborhoods where HUD sold homes have lower median household income on average than areas where HUD did not sell homes.
NPR notes that there is no federal regulation which requires HUD to disclose flood risk to potential buyers. HUD spokesperson Michael Burns tells NPR that one reason that HUD homes are disproportionately located in flood zones is that the agency does not choose the homes it sells.
For more, head to NPR by clicking here.