Mr Arnold, 82, swam down through the water to wrench open his front door and swim towards the early morning light. He came up for air by the roof of his home to see his neighbour, Colin "Spider" Webb, 79, lying dead on the footpath, drowned.

 "Three died and the fourth could have been me," Mr Arnold says.

Three months later, he is still without a home and living in the Tall Timbers motel in Dungog. His remaining belongings now fit into two plastic containers.

"None of these clothes are mine", he says, gesturing to his faded black T-shirt, track pants and shoes. "They were all donated to me".

Mr Arnold is one of eight elderly residents of the council-owned Alison Court assisted living facility who are yet to be informed of when – or even if – they will be able to return.

"I've lived in log shacks and tents and caravans, but I've never ever been homeless," said Jean Robertson, 83, another former Alison Court resident who has been living in Dungog's only motel since her unit was damaged by floodwaters.

Eighty-three households were displaced when the floodwaters hit Dungog on April 21. 

Sixty households are still in limbo, staying in temporary accommodation, the pub, the Tall Timbers motel or with friends or family.

Some continue to live in damaged homes that are missing windows, walls and doors. 

"People are still living borrowed lives, it's exhausting for them,” manager of Dungog Shire Community Centre, Sarah U'Brien said.

Delayed and disputed insurance claims have meant that repair work has still not begun on many homes, and families are left in the lurch, without an expected date to return home. 

The Dungog Shire Local Flood Plan, obtained by the Newcastle Herald, identifies four of the aged-care units at Alison Court as under high risk of flooding, yet Dungog Council had not insured the units for flood damage, only storm damage.

The council is currently in a dispute with Statewide Mutual insurance company and awaiting the verdict of their claim.

"We're bloody frustrated, to be honest. The council holds no joy in keeping people from their homes," mayor Harold Johnston said.

Council workers have been gutting the Alison Court units but when or whether they will be rebuilt remains uncertain.

Jane and Karl Winiarczyk have been living in small quarters behind the beer garden at Dungog's Bank Hotel for 15 weeks. They were lucky to escape their home as it filled with 2.7 metres of floodwater in the early hours of April 21. 

Angie Taylor and John Edwards and their four children have been homeless since the flood and are staying at Dungog's Royal Hotel.

Their family has been forced apart with their children living across town at Ms Taylor's mother's house.

"The housing delays have caused a domino effect of stress and strain throughout our community", Ms U'Brien said.

 "The lack of certainty surrounding housing is causing people to live in extended periods of vulnerability."

Dungog mayor estimated  it may take up to two years for Dungog to get back to where it was before the floods.

"Disaster recovery is a marathon, not a sprint. We're just as disappointed as the residents are," Cr Johnston said. 

Dot Handley, 75, Lynette Dickson, 79 and Mary Margaret Moule, 90, are sharing a house on Dungog's main street.

Both Dot and Lyn are experiencing anxiety and attribute some negative turns in their health to the stress of being displaced. 

"We just want to be home, we want our own space," Ms Dickson said in tears.

"There's been a real lack of communication with the displaced people that are among the most fragile and vulnerable in our community," Ms U'Brien said. 

"They were vulnerable anyway because of their age, and now they're homeless."