As many as 80 percent of homeowners in Houston were without flood insurance.

For the victims of Hurricane Harvey without flood insurance, which experts have estimated is as much as 80 percent of Houston homeowners, long-term relief will not come without a price.

FEMA offers disaster assistance grants, but those mostly serve as short-term solutions to help victims quickly return to their homes. Payouts during Hurricane Sandy in 2012 averaged about $8,000, according to FEMA data.

Tom Bossert, President Donald Trump’s national security adviser, said 100,000 homes were destroyed or damaged by Harvey, and CoreLogic, an analytics firm, said total residential damages from flooding are between $25 billion and $37 billion.

If homeowners want to completely repair their houses from flood damage, they will likely need to take on debt, an option many have already resorted to. As of Thursday, more than 11,000 people had applied for disaster loans from the U.S. Small Business Administration, the federal agency that provides low-interest loans to victims of natural disasters. Since the start of the storm, the administration has handed out more than $49 million in loans, according to spokeswoman Carol Chastang, and $450 million of the $15 billion appropriated to Harvey relief in a bill passed by the U.S. Senate on Friday will go to the Small Business Administration’s disaster program.

As of Monday morning, SBA has approved 1,141 disaster loans for nearly $104 million). There are currently 9,935 disaster loans being processed.

“This is really big that we’ve provided this many disaster loans in this short period of time,” Chastang said.

The administration is known for handling business loans, but homeowners seeking relief can also borrow up to $200,000 for repairs to real estate, and renters can receive up to $40,000. Rates on these loans can be as low as 1.75 percent – college and mortgage loans are typically more than double that – and last from three to 30 years, depending on the borrower’s ability to repay the loan.

Of course, paying a bill for repairs later down the line is not ideal for many families.

“All the sudden you’re paying a loan on your house along with your mortgage,” said Bob Hunter, the director of insurance for the Consumer Federation of America and the former commissioner of insurance for the state of Texas.

Much of the blame for Houston’s low flood insurance rate has been placed on the National Flood Insurance Program, which requires residents in 100-year floodplains to buy the insurance but uses outdated maps to determine where people are at risk. In Harris County, 25,000 fewer people have flood insurance now than in 2012, according to data analyzed by the Associated Press. Neighborhoods like Meyerland, Briar Hills and Fleetwood experienced a 500-year flood during Harvey.

Consumers across the country, though, typically don’t opt into low-probability, high-cost insurance policies because they make two mistakes, said Hunter, the insurance expert. The first is the fallacy of invincibility – that my house is positioned higher than my neighbor's and will be okay compared to everybody else's. The second is the misconception that disaster relief will cover any and all damages. Nationally, only about 12 percent of homeowners have flood insurance, according to the Insurance Information Institute.

“People don’t have earthquake insurance with houses on fault lines,” he said.

The result of this insurance gap is people scrambling for help. Chastang from the Small Business Administration said the agency has approved 541 disaster loans and is processing about 6,800 at the moment. She said the discrepancy between applications and approvals is due to the sheer volume of requests as well as the number of people who apply for a loan and ultimately decline to pursue it further.

Congress appropriated $3.3 billion to the Small Business Administration for the 2017 fiscal year and Chastang said the agency will be fine as more and more applications stream into the agency.

“We are prepared for this,” Chastang said. “[We are] prepared for the long-term recovery of areas affected by Harvey.”

