A lawsuit settlement signed Wednesday between Prince William County and the owner of a Woodbridge mobile home park paves the way for a rebuilding effort after a 2011 storm swept away many of the homes.

Dozens of residents of Holly Acres Mobile Home Park were left homeless in September 2011 following Tropical Storm Lee. The storm caused the nearby Marumsco Creek to rise rapidly, inundating the area with water and destroying many of the homes.

In the aftermath of the storm, Prince William officials barred the homes from being rebuilt, saying that doing so could result in the county could be kicked out of the FEMA flood insurance program, county homeowners would be hit with an increase in premiums, and residents across the county would have trouble getting homeowners insurance.

However, the move inflamed racial tensions between the county and the mobile home park’s owner, Hank Ridge, who alleged that he would have been allowed to rebuild if the low-income, largely Latino community’s demographics were different.

County officials denied those accusations. In the end, both sides settled Ridge’s $8 million lawsuit against the county, allowing FEMA to referee how many homes could safely be rebuilt. There are currently around 40 mobile homes in the park and, if FEMA agrees, the total could increase to 106, the number of units in the park before the storm hit.

Further, nine units that were the subject of dispute last summer — residents had moved back in but were threatened with arrest because the homes violated county codes — are able to be legally occupied.

The county also admitted in the settlement that five units were bulldozed prematurely and should be replaced. Up to 70 recreational vehicles will be allowed as new units are built.

Prince William agreed to pay up to $75,000 for a study that is required to be submitted to FEMA to rule on how many mobile home units can be safely rebuilt, according to the settlement and Prince William County Board Chairman Corey A. Stewart (R-At Large).

“It’s always better to settle differences amicably. . . rather than battle things out in court,” Stewart said. “It’s a win-win.”

FEMA’s stamp of approval ensures that county residents won’t see issues with their insurance, Stewart said, addressing the county’s chief concern.

Ridge’s attorney, Mark Moorstein, complimented the county’s attorneys for avoiding a court battle. “This is the right way to do it,” he said.