Resident Nick Margetts says he would have lost everything if his house had been flooded. (CBC)Hundreds of people forced from their south Vancouver Island homes by flooding have been allowed to return, but most won't be able to stay because of damage to their houses.

The local regional district declared a state of emergency on Friday and initially placed about 300 houses under an evacuation order as water streamed around a network of dikes that were built in the 1960s.

The number of evacuees had since dropped to about 100 homes in Duncan, about an hour's drive north of Victoria, and the North Cowichan district to the west.

However, people still under the order have been told they can return if they feel it's safe and the district planned to reassess later in the day on Sunday.

'A lot of these people don't have any money. How the hell are they gonna pay up front?'—Bob Bell, resident

Joe Barry of the Cowichan Valley Regional District said even after everyone receives the all-clear, some residents will have to wait longer to live in their homes again.

"If you come back to your house and you're one of the unfortunate ones that the water did get into your house — if it got as high as your bed, you won't be staying there," he said.

Don Kirkpatrick told CBC News his parent's home was flooded and officials refused to let him into the home to survey the damage.

"Why not salvage what you can today, instead of writing it all off?" he wondered.

Resident Nick Margetts stayed behind to put up sandbags in his neighbourhood when the evacuation order was issued.

He said the water came within a few centimetres of flooding his home.

"We slept on the couch in our living room, and every hour or so on the hour I would get up and come out and walk around and check and see if we had water rising again," he said.

"It's been scary, you know, this is everything we have right here and if it goes, I have no idea what we would do."

'It's a living nightmare,' says resident

Debris littered the streets on south Vancouver Island after flood water receded. (CBC)Bob Bell spent much of the day Saturday surveying the water damage in his home after the evacuation order was lifted.

"You gotta get your house dry or you won't have one, and if you don't get the carpets out, nothing's going to dry."

Bell lived through the last major flood in the area in the 1970s, and said the community is in for a long haul.

"It's a living nightmare because the government won't give any of these people any money, including myself, and we have to pay up front," he said.

"A lot of these people don't have any money. How the hell are they gonna pay up front?"

The provincial government has approved disaster funding to help homeowners pay for expensive repairs linked to the flooding.

The program covers up to 80 per cent of the portion of a claim that exceeds $1,000 up to a maximum of $300,000.

With files from The Canadian Press