Small Business Act of 1953, Section 7(b)(1), as amended,
Public Law 85-536, 15 U.S.C. 636(B)(1); Disaster Relief Act of 1970, Sections
231, 234, 235 and 237, Public Law 91-606, 42 U.S.C. 4401; Public Laws 93-24,
94-305, 95-89, 96-302, 97-35, 98-166, 98-270, 99-272, 99-349, 100-590, 102-27,
102-395, and 103-75.
To provide loans to the victims of declared physical-
type disasters for uninsured losses.
TYPES OF ASSISTANCE:
Direct Loans. Place Cursor Here for Definition
Guaranteed/Insured Loans. Place Cursor Here for Definition
USES AND USE RESTRICTIONS:
Loans made to homeowners, renters businesses of all
sizes and nonprofit organizations to repair and/or replace damaged and/or
destroyed real property and/or personal property to its pre-disaster
conditions. Credit elsewhere test required for all applicants to determine
interest rates. Loans to homeowners/tenants are made for up to 30 years. Limit
of $200,000 for repair/replacement of real property; $40,000 for
repair/replacement of personal property. The loan limit may be increased by 20
percent to provide protective measures from damages caused by physical
disasters. The interest rate for homeowners/tenants who have credit available
elsewhere is determined by a formula based on the cost of money to the U.S.
Government, but not to exceed 8 percent. The interest rate for
homeowners/tenants who do not have credit available elsewhere is one-half of
the formula rate, but not to exceed 4 percent. Loans to business may not
exceed $1,500,000. For businesses determined to be able to obtain credit
elsewhere, the interest rate is based on a statutory formula, but not to
exceed 8 percent, with maturities not to exceed 3 years. For nonprofit
organizations determined to be able to obtain credit elsewhere, the interest
rate is based on a statutory formula, with maturities not to exceed 30 years.
For businesses and nonprofit organizations determined to be unable to obtain
credit elsewhere, the interest rate may not exceed 4 percent, with maturities
up to 30 years. Under certain circumstances, homeowners and businesses may be
eligible for refinancing of existing liens. There are statutory restrictions
on the use of funds for voluntary relocation. In the case of a Major Source of
Employment, the $1,500,000 limitation on disaster loans may be waived.
Provisions of Flood Disaster Protection Act of 1973 and the National Flood
Insurance Reform Act of 1994 apply.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility:
Eligible applicants must have suffered physical property loss as a result of a
disaster which occurred in an area declared as eligible for assistance by the
President or SBA. They must also demonstrate an ability to repay the loan.
Individuals, business concerns, charitable and nonprofit organizations are
eligible to apply for assistance.
Beneficiary Eligibility:
Individuals, business concerns, charitable and nonprofit organizations.
Agricultural enterprises are ineligible.
Credentials/Documentation:
List of realty and personal property to be repaired or replaced, financial
statements, and a signed IRS Form 8821 to enable SBA to obtain tax return
information from IRS for the 3 years prior to the disaster (only 2 years for
homeowners and renters) and complete copies of Federal Tax returns for the
past 3 years for business applicants.
Pre-application Coordination:
This program is excluded from coverage under E.O. 12372. Whenever feasible,
interviews are held with disaster victims and the program is explained.
Assistance on filing of application is provided.
Application Procedure:
Application is made on a standard form for either a home or business type loan
and filed in a single copy with the nearest available SBA Disaster Area office
or special disaster office. Only one copy required.
Award Procedure: Applicant
is notified of approval by authorization letter from SBA Disaster Area or
Special Disaster Branch.
Deadlines: Eligibility to
file terminates 60 days from the date of the disaster declaration, or on other
deadlines if extended.
Range of Approval/Disapproval Time:
From 7 to 21 days depending on complexity of case and availability of
resources.
Appeals: Reconsideration
can be requested of a declined application at any time within 6 months of the
decline, and appeals within 30 days from the reconsideration decline action.
Renewals: Not applicable.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements:
Not applicable.
Length and Time Phasing of Assistance:
Funds must be used within 6 months of authorization of the loan, unless
extended.
POST ASSISTANCE REQUIREMENTS:
Reports: All borrowers must
maintain records on how loan proceeds are used for 3 years after last
disbursement.
Audits: Not applicable.
Records: Complete financial
records must be maintained by business borrower.
FINANCIAL INFORMATION:
Account Identification:
73-1152-0-1-453.
Obligations: (Loans) FY 01
$936,642,900; FY 02 est $1,007,000,000; and FY 03 est $814,000,000 (Note:
Obligations include funds for 59.002 and 59.008.)
Range and Average of Financial Assistance:
Direct home loans up to a $240,000 limit plus $200,000 additional in some
special cases to refinance existing liens and $48,000 additional for
protective measures. Direct business loans up to $1,500,000 with additional
amounts available for major employment. In fiscal year 2001, average loans
were: $17,740 (Home); $51,160 (Business).
During fiscal year 2001, 23,541 loans were made for
$859,890,100.
REGULATIONS, GUIDELINES, AND LITERATURE:
13 CFR Part 123; "Physical Disaster Business
Loans," DA-2; "Disaster Loans for Homes and Personal Property,"
DA-1.
INFORMATION CONTACTS:
Regional or Local Office: For
reference to the Disaster Area Office, see Appendix IV of the Catalog under
the Small Business Administration.
Headquarters Office: Office
of Disaster Assistance, Small Business Administration, 409 3rd Street, SW.,
Washington, DC 20416. Program Contact: Herbert Mitchell. Telephone: (202)
205-6734. E-Mail address: disaster.assistance@sba.gov.
