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Appalachian group announces plan to build homes for victims of devastating KY flood

Lexington Herald-Leader logo Lexington Herald-Leader 10/3/2022 Bill Estep, Lexington Herald-Leader
Buildings and roads are flooded near Lost Creek, Ky., Thursday, July 28, 2022. © Ryan C. Hermens/Lexington Herald-Leader/TNS Buildings and roads are flooded near Lost Creek, Ky., Thursday, July 28, 2022.

Grants totaling $1.8 million to non-profit agencies will allow the construction of 16 affordable houses for people whose homes were destroyed or badly damaged in recent catastrophic flooding in Eastern Kentucky.

The Foundation for Appalachian Kentucky announced the funding Saturday during its Appalachian Big Ideas Festival in Hazard.

The foundation is providing $1.23 million and the Federation of Appalachian Housing Enterprises, or FAHE, is providing $50,000 for the program, according to a release.

The floods in late July destroyed or caused major damage to hundreds of homes and resulted in 40 deaths. Two women from Breathitt County are still missing.

A total of 13 counties were designated disaster areas where people can apply for individual assistance from the federal government, but the damage to housing was worst in Breathitt, Knott, Perry and Letcher counties.

Housing advocates were disappointed when the state legislature approved $213 million in flood aid for the devastated area in August that didn’t set aside any of the money for housing, even as people whose homes were destroyed were living in tents and storage sheds.

The program announced Saturday will only begin to tackle the staggering need in the area.

“We’re going to build 16 homes. We need 1,600 homes,” said Gerry Roll, chief executive officer of the Foundation for Appalachian Kentucky, based in Hazard.

Roll said organizations working in Eastern Kentucky have the expertise to tackle the shortage of affordable, good-quality housing that had been described as a crisis even before the flood.

“We know how to do this. We’ve been implementing a smart affordable housing program across the region for decades,” Roll said. “Now, we are coming together as a community to build these next 16 homes and to challenge the governor and our legislature to step up and allocate the funding we need for the next 1,600, because housing can’t wait.”

Under the effort announced Saturday, HOMES, Inc., based in Whitesburg, will build four houses in Letcher County and the Housing Development Alliance, based in Hazard, will build four homes each in Perry, Knott and Breathitt counties.

The two non-profits already own or control the building sites, so construction can begin right away. The Housing Development Alliance has started work on two houses in Perry County.

The homes will be sold at the appraised value to flood survivors, but much of the financing will be through loans or grants that won’t have to be repaid if the buyer uses the house as a primary residence, said Scott McReynolds, executive director of HDA.

If buyers have received housing awards from the Federal Emergency Management Agency they will be expected to put that toward the purchase, according to the news release.

People who have been approved for a disaster recovery loan from the U.S. Small Business Administration can use that money as well.

Housing agencies will work with buyers to find other assistance help them afford the homes, McReynolds said.

“Of course, we’re trying to help people who have lost everything, so keeping these homes affordable is key,” McReynolds said. “We can get these down to pretty darn affordable house payments.”

The $1.8 million announced Saturday won’t cover the entire cost of land, site development and construction for the 16 houses, but the developers can combine it other resources to get the houses built.

The houses will probably appraise for about $150,000, McReynolds said.

The program also will use volunteer workers and donated materials as much as possible to keep down the prices of the houses.

McReynolds said that in addition to getting people into good homes, the program will benefit the economy through purchases of building materials and the use of local workers, and improve the local property-tax base.

The houses will be built outside the flood plain and flood-prone areas. They will be designed to be energy-efficient and require little maintenance, according to the release.

Flood survivors interested in buying one of the houses in Breathitt, Knott, and Perry counties can apply at For questions, call the HDA office at 606-436-0497 or email

People in Letcher County can contact HOMES, Inc. at 606-632-1717.

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