Chapter 8 › VI. Repair vs. Replacement

How does FEMA decide whether to repair or replace a damaged facility?

FEMA term

Repair vs. replacement; 50 percent rule

Short answer

A facility is repairable if the repair cost is 50 percent or less of the replacement cost and it can be repaired to work as well as before. Above 50 percent, or if repair isn’t feasible, replacement is eligible.

What FEMA requires

Submit replacement requests within one year of the declaration, with both estimates.
Replacement requests over $5 million get an independent third-party review.
If you repair a facility eligible for replacement, FEMA pays the lesser of repair or replacement.
The rule isn’t applied to building components (roofs, HVAC, windows). For systems with separable parts, it applies to each component, such as manhole-to-manhole pipe or a single clarifier.
A floodplain manager’s substantial damage determination is separate from the 50 percent rule.
Demolishing a facility eligible for replacement, and cost-effective mitigation, are eligible on the replacement project.

<table class="pt-table"><thead><tr><th>Cost</th><th>Repair estimate (numerator)</th><th>Replacement estimate (denominator)</th></tr></thead><tbody><tr><td>Repair of disaster damage, with codes for the damaged elements</td><td>Included</td><td>—</td></tr><tr><td>Replacement to pre-disaster size, capacity and function, with codes</td><td>—</td><td>Included</td></tr><tr><td>Upgrades to undamaged elements (e.g. elevating the whole facility)</td><td>Excluded</td><td>—</td></tr><tr><td>Floodplain elevation or floodproofing of a substantially damaged facility</td><td>Excluded</td><td>Included</td></tr><tr><td>Demolition</td><td>Only selective demolition needed for the repair</td><td>Excluded</td></tr><tr><td>Site work, soft costs, contents, mitigation, emergency work</td><td>Excluded</td><td>Excluded</td></tr></tbody></table>

Documentation

Repair and replacement estimates prepared to FEMA’s estimating requirements, with the calculation and any feasibility study.

Watch out · Govstar practitioner advice

Build both estimates using the same exclusions FEMA uses. Including site work or soft costs in your repair number is the most common miscalculation.

Govstar summarizes FEMA’s Public Assistance Program and Policy Guide in plain language and links to the official text. Govstar is independent and not affiliated with FEMA. This is general guidance, not legal advice.