I have been pretty familar with the FEMA flood recovery efforts in ND for quite some time now. I am not aware of anyone ever needing to sell their land to FEMA in order to gain access to temporary housing. I'm not saying dealing with such a large loss is a pleasant experience, and navigating the paperwork and headaches of receiving federal assistance are fun either, just saying I don't know of anyone who had to sell their property to avoid living in a tent.
From the FWIW dept, FEMA doesn't actually buy out flooded property. Rather, the federal government through FEMA programs provides money to local governments to assist with the buying out of properties at high risk of flooding. Once bought using federal funds, it can never again be developed into housing.