Low and Moderate income households should never sign for any SBA Disaster Loan without consulting CDBG-DR
Homeowners often sign for SBA loans because it sounds like the best offer. For personal property replacement loans, yes, for home repair loans no. No if your household is 80% AMI or below which is low to moderate income. HUD CDBG-DR for home repair.

By Murray Wennerlund published 5-18-2022 updated 5-26-2022

Community Development Block Grant Disaster Recovery grants are to help prevent you from being homeless. They are grants, not loans that will assist you with repairs of your home after a disaster and only if you were declared to have major to severe damage to your home. 

IV.A.1.b. Declined or cancelled subsidized loans.

The amount of a subsidized loan that is declined or cancelled is not a DOB. To exclude declined or cancelled loan amounts from the DOB calculation, the grantee must document that all or a portion of the subsidized loan is cancelled or declined.

(i) Declined SBA Loans: Declined loan amounts are loan amounts that were approved or offered by a lender in response to a loan application, but were turned down by the applicant, meaning the applicant never signed loan documents to receive the loan proceeds.

CDBG-DR grantees shall not treat declined subsidized loans, including declined SBA loans, as a DOB (but are not prohibited from considering declined subsidized loans for other reasons, such as underwriting). A grantee is only required to document declined loans if information available to the grantee ( e.g., the data the grantee receives from FEMA, SBA, or other sources) indicates that the applicant received an offer for subsidized loan assistance, and the grantee is unable to determine from that available information that the applicant declined the loan. If the grantee is aware that the applicant received an offer of loan assistance and cannot ascertain from available data that the applicant declined the loan, the grantee must obtain a written certification from the applicant that the applicant did not accept the subsidized loan by signing loan documents and did not receive the loan.

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