- Sept. 21, 2016
The Small Business Administration (SBA) and FEMA team up and offer Federal Money in the form of a low interest rate Federally Secured Loan. SBA Manages the process while FEMA funds the money. This is good for many groups of homeowners but can cost you tens of thousands of dollars later if you are not careful.
- SEC. 609.DUPLICATION OF BENEFITSSBA Disaster Loan "Fix" that seems to be broken before it's ever read.
Defaulting on a loan is very serious for our US Military personnel. We can not sit back and allow the SBA to give loans impossible to repay by our military service men and women.
- OIG Report (2017): "SBA determined that the most prevalent root cause for improper payments in FY 2017 was due to lack of documentation to support the repayment analysis and eligibility.
- OIG Report (Apr. 2018): "A review of early defaulted Hurricane Sandy disaster loans found that despite the relatively low early default rate of Hurricane Sandy loans compared to other disasters, 17 of the 21 loans reviewed were approved without verifying borrowers' eligibility or were made to borrowers that lacked creditworthiness or repayment ability. OIG considers loans that default within 18 months of initial disbursement as defaulting early.
Early-Defaulted Hurricane Sandy Disaster Loans (Early Default is 18 months or less to default on the loan)
August 15, 2016 Audit Report No. 16-18 "As a result, we estimated that at least 361 of the 501 early - defaulted loans, totaling $4.3 million were not approved in accordance with SBA and/or Federal requirements."
- Private Loans before Federal Loans. You will not have Duplication of Benefits when it's time for HUD CDBG-DR to offer reimbursements. You should be returned 70% to 100% of your total out of pocket recovery costs if you use NFIP and Private lenders for your loans or your own cash. You will need to follow your states recovery office for details but here in Louisiana going on 20 years those that didn't take the SBA Disaster Loans fared far better than those that did.
- Solutions to fix the system have all be focused on using HUD CDBG-DR grants to repay federally secured SBA Disaster Loans. Every state that has had a declared disaster since 2010 has attempted to have rules change and with no success. Do not fall for the "Delay tactic" known as the "SBA Congressional Fix" or simply the "SBA Fix". It's a way your state delays your recovery by holding funds that would be used to pay off the SBA loans for a length of time they determine and once that time limit has been reached they create a new program and transfer the money out. Watch Louisiana OCD-DRU Restore LA group July 13, 2018 task force meeting to understand that the SBA issue is not an issue but politicians make it an issue to take homeowners assistance funds and place the money in state infrastructure and economic development. The homeowners victims of the disaster are once again victims of not having state officials work in their best interests and to use the HUD money awarded to homeowners for homeowners.