SBA Loans: Disaster Relief Home and Personal Property Loans

SBA Loans

Established in 1953 by the 83rd United States Congress with the passage of the Small Business Act, the Small Business Administration is a government agency that guarantees loans made to small businesses in order to help them get a foothold in the market, with the intention of promoting healthy competition and job creation to stimulate economic development. Some of the programs the SBA offers are through its Office of Disaster Assistance, which are specifically designed to aid small businesses in disaster relief.

Victims of damage residing in declared disaster areas can receive assistance. Anyone who owns or rents a home or personal property in a disaster area can be eligible for a loan for recovery–even those who are not business owners. Qualified applicants can receive loans of up to $40,000 to replace or repair personal property such as vehicles, household appliances, furniture, clothing, or other personal property that was damaged or destroyed due to the disaster. Homeowners specifically can receive up to $200,000 to restore or replace their primary residence if it was damaged by the disaster. In the event that the home was worth a considerable amount and the damage was extensive, a homeowner can have the impact of the damage assessed and confirmed by the SBA, and the loan amount can be raised to as much as 20% of the value of the damage. Any revenue received from home insurance will be deducted from the total amount of the assessed damage if the homeowner elects this option.

Naturally, the intention of this program is to aid in recovery from a disaster. It is not permitted that home owners use the revenue for renovations or improvements that would cause the home to be in a superior condition to its pre-disaster value. After all, the program is designated for disaster relief, not personal luxury. One notable exception is that the funds may be used to make a residence more disaster-proof and likely to withstand a subsequent disaster, provided such upgrades are in compliance with local building authorities.

These loans cannot be used for vacation properties or time share properties–the purpose of this program is to aid people whose primary residence has been damaged and who require assistance in order to live in their home. Interest rates will not exceed 8% for those able to receive credit elsewhere, or 4% for those who are otherwise unable to receive credit. The repayment period can last up to 30 years, depending on the recipient’s ability to pay back the loan.

For more information, go to sba at>

SBA Loans: Disaster Relief Home and Personal Property Loans was last modified: November 8th, 2011 by Amit Kraidman
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