The Substantial Damage Estimator (SDE) 2.0 tool was developed by the Federal Emergency Management Agency (FEMA) to assist state and local officials in determining "substantial damage" for residential and non-residential structures in accordance with a local floodplain management ordinance meeting the requirements of the National Flood Insurance Program (NFIP). The tool can be used to assess flood, wind, wildfire, seismic, and other forms of damage. It helps communities provide timely substantial damage determinations so that reconstruction can begin following a disaster.

The SDE 2.0 tool is based on the concept of using damage estimates for individual building elements to determine whether the building as a whole is substantially damaged. Depending on the type of structure and specific attributes, the tool calculates the value of each building element as a percentage of the total building. Using the SDE-calculated element percentages, the user can apply a “Percent Damaged” or “Percent Improved” value to each element to establish a substantial damage/improvement determination for each building.