After a natural disaster like the Mississippi River floods or tornadoes in the Midwest, who qualifies for SBA disaster loan assistance? Does the SBA make these loans only to small businesses? Or can homeowners and renters qualify for disaster loans too?
SBA makes disaster loans to homeowners and renters, as well as businesses. You do not have to own a business to get a disaster loan from the SBA.
Renters and homeowners alike may borrow up to $40,000 to repair or replace clothing, furniture, cars, appliances, etc. damaged or destroyed in the disaster.
And homeowners may also apply for up to $200,000 to repair or replace their primary residence to its pre-disaster condition, advises the SBA on its website.
These loan programs for individuals exist in addition to SBA's programs for lending to small businesses.
Some limitations on these loans to individuals, according to SBA rules:
- The loans may not be used to upgrade homes or make additions, unless as required by local building authority/code.
- Loans may be increased up to 20 percent of the total amount of disaster damage to real estate, as verified by SBA, to make improvements that lessen the risk of property damage by future disasters of the same kind.
- Secondary homes or vacation properties are not eligible for these loans.
- Qualified rental properties may be eligible for assistance under SBA's business loan program.
SBA offers loans with long-term repayments in many cases up to 30 years. Terms are determined on a case-by-case basis, based upon each borrower's ability to repay. Interest rates by law cannot exceed four percent. SBA may require that loans over $10,000 be secured by liens on the damaged property.
And believe it or not, IRS says disaster victims might qualify for tax relief also. But that's a subject for another blog.
Meanwhile, anybody who lives in a flood, tornado or hurricane zone should make sure they explore SBA disaster loan relief. Fourteen Mississippi counties have already been declared disaster zones eligible for federal assistance, reports CNN. You can apply for SBA disaster loans online or in person to an SBA office.
- SBA: The Application Process (U.S. Government/SBA)
- How to Report SBA Fraud, Waste and Abuse (U.S. Government/SBA)
- SBA Disaster Loans: Who is Eligible and What Types Are There? (FindLaw's Free Enterprise Blog)
- How to Apply for SBA Disaster Loans (FindLaw's Free Enterprise Blog)