In this paper earthquake damage scenarios for residential buildings (about 4200 units) in Potenza (Southern Italy) have been estimated adopting a novel probabilistic approach that involves complex source models, site effects, building vulnerability assessment and damage estimation through Damage Probability Matrices. Several causative faults of single seismic events, with magnitude up to 7, are known to be close to the town. A seismic hazard approach based on finite faults ground motion simulation techniques has been used to identify the sources producing the maximum expected ground motion at Potenza and to generate a set of ground motion time histories to be adopted for building damage scenarios. Additionally, site effects, evaluated in a previouswork through amplification factors of Housner intensity, have been combined with the bedrock values provided by hazard assessment. Furthermore, a new relationship between Housner and EMS-98 macroseismic intensity has been developed. This relationship has been used to convert the probability mass functions of Housner intensity obtained from synthetic seismograms amplified by the site effects coefficients into probability mass function of EMS-98 intensity. Finally, the Damage Probability Matrices have been applied to estimate the damage levels of the residential buildings located in the urban area of Potenza. The proposed methodology returns the full probabilistic distribution of expected damage, thus avoiding average damage index or uncertainties expressed in term of dispersion indexes

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