FEMA Housing Assistance Not Contingent on SBA Loan Application

December 16, 2005

Hurricane Katrina victims seeking federal temporary housing assistance reportedly do not need to complete a U.S. Small Business Administration (SBA) loan application to be considered for such assistance.

Temporary housing assistance from the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) does not require that an applicant file for an SBA loan. FEMA’s temporary housing assistance is available to applicants displaced from their pre-disaster primary residence or whose residence has been rendered uninhabitable as a direct result of Hurricane Katrina.

Assistance is also contingent on an applicant’s insurance coverage and whether it provides for housing needs. But in no case will an SBA loan application be required for temporary housing assistance.

Eligibility determinations for applicants requesting FEMA’s temporary housing assistance will not be held up because the applicant has or has not filled out an SBA loan application, or has filled out such an application incorrectly, unnecessarily or superfluously. FEMA will process applications for housing assistance regardless of whether the applicant has applied for an SBA loan.

The only FEMA assistance program that requires an applicant to complete an SBA loan application is FEMA’s Other Needs Assistance program. This program covers disaster-related costs such as furniture, medical and dental expenses, funeral and burial expenses, and transportation expenses. An applicant will not be considered for other needs assistance until they have applied and been denied by SBA.

The SBA provides low-interest disaster loans to qualified homeowners, renters, landlords, certain private non-profit organizations and businesses of any size that sustained losses due to the disaster. These loans are designed for disaster victims who are either uninsured or not fully covered by insurance.

SBA loans are the primary source of long-term recovery assistance. Actual loan amounts and terms are determined by the SBA and based on each applicant’s financial condition.

“Taking on a loan probably isn’t the first thing that folks think of when they’re recovering from a disaster,” FEMA Acting Director R. David Paulison said. “But there are strong advantages to an SBA loan. First, it is tied to the lowest possible interest rate to make recovery as affordable as possible. Second, an SBA loan lets you decide what to do with your money; you set the priorities for how it will be spent.”

The SBA also makes mitigation funds available to many disaster victims who have already been approved for low-interest disaster loans. SBA funds are intended to help borrowers by offering an increase up to 20 percent of their approved physical loan amount to help pay for mitigation measures.

For more information about how to complete the loan application, or for more information on SBA assistance, call the SBA Helpline at 800-659-2955, or visit www.sba.gov/disaster.

For more information on FEMA assistance programs, or to register for FEMA assistance, visit www.fema.gov or call 1-800-621-FEMA (3362) or TTY 1-800- 462-7585 for the speech and hearing impaired.

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