Program Description
The U.S. Small Business Administration (SBA) is responsible for providing affordable, timely and accessible financial assistance to homeowners and renters located in a declared disaster area. Financial assistance is available in the form of low-interest, long-term loans for losses that are not fully covered by insurance or other recoveries.
SBA's disaster loans are the primary form of federal assistance for the repair and rebuilding of non-farm, private sector disaster losses. The disaster loan program is the only form of SBA assistance not limited to small businesses.
Homeowners can apply for a real property loan for up to $200,000 to repair or replace their primary residence to its pre-disaster condition. The loan may not be used to upgrade the home or make additions to it. If, however, building codes require structural improvements to repair the disaster damage, the loan may be used to meet these requirements. Loans may be increased by as much as 20 percent of the verified losses (not to exceed $200,000) to protect the damaged real property from possible future disasters of the same kind.
Homeowners or renters can apply for a personal property loan for up to $40,000 to help repair or replace personal property, such as clothing, furniture, automobiles, etc., lost in the disaster. As a rule of thumb, personal property is anything that is not considered real estate or a part of the actual structure. This loan may not be used to replace extraordinarily expensive or irreplaceable items, such as antiques, collections, pleasure boats, recreational vehicles, fur coats, etc.
Loan Terms
Disaster survivors must repay SBA disaster loans. SBA can only approve loans to applicants with a reasonable ability to repay the loan and other obligations from earnings. The terms of each loan are established in accordance with each borrower's ability to repay. The law gives SBA several powerful tools to make disaster loans affordable: low fixed interest rates, long-terms (up to 30 years), and refinancing of prior real estate liens (in some cases). As required by law, the interest rate for each loan is based on SBA's determination of whether an applicant has the ability to borrow or use their own resources to overcome the disaster.
The SBA can provide up to $200,000 to homeowners to repair or replace their primary residence. Homeowners and renters are eligible for up to $40,000 to help repair or replace personal property. There are no upfront fees or early payment penalties charged by SBA.
