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From: Aaron []
Sent: Tuesday, August 21, 2018 12:16 PM
To: Johnny Bradberry

Subject: SBA Declined

Good afternoon,
My name is Aaron. I am writing you today in support of Mr. Murray Wennerlund's public input sent to you Thursday the 16th of August. I encourage you to place the solution for the SBA Declined loan issue on the Task Force agenda and to vote in favor of the policy to follow public law 115-123 as official state guidance for the estimated 3,800 Louisiana citizens that declined the SBA loan.
Thank you for your time.

Baton Rouge La, 70816

From: Johnny Bradberry
Sent: Tuesday, August 21, 2018 2:00 PM
To: Lori Dupont

Subject: FW: SBA Declined

FYI---Got this today----I have not received a communication on August 16th as indicated here. Please pass on to Pat for review.
Johnny B. Bradberry
Executive Assistant to the Governor for Coastal Activities
CPRA, Chairman
225-342-7669 phone

From: Adam Knapp
Sent: Wednesday, August 22, 2018 5:17 AM
To: Pat Forbes; Dan Rees
Subject: Fwd: SBA Declined

Another one of these

Begin forwarded message:
- - -
(225) 278-3708

From: Jimmy Durbin
Sent: Thursday, August 23, 2018 7:19 AM
To: Lori Dupont

Subject: Fwd: SBA Declined



Sent from my iPhone
Begin forwarded message:

From: Lori Dupont
Sent: Thursday, August 23, 2018 7:23 AM
To: 'Jimmy Durbin'

Subject: RE: SBA Declined

Thanks for forwarding to me, Mr. Durbin. We are currently working on a response and will include the TF members when we do.
Also, the next task force meeting is tentatively scheduled for Tuesday, September 25, in Ouachita Parish (this hasn't been announced and the actual location has not been decided on) – would you be able to travel to Ouachita on that day and chair the meeting?

Kindest Regards,
Lori Dupont
Executive Assistant to the Executive Director
Office of Community Development-Disaster Recovery Unit
State of Louisiana

From: Jimmy Durbin
Sent: Thursday, August 23, 2018 5:16 PM
To: Lori Dupont

Subject: Re: SBA Declined

Yes, I am happy to do so. Please update me on the location.

Sent from my iPhone

From: Jimmy Durbin
Sent: Thursday, August 23, 2018 5:17 PM
To: Lori Dupont

Subject: Fwd: SBA Decline


Sent from my iPhone
Begin forwarded message:

From: Wallace Aultman
Date: August 23, 2018 at 1:37:18 PM CDT
To: "" , "" , "" , "" , "" , "" , "" , "" , "" , ""

Subject: SBA Decline

I am writing to you today in support of Mr. Murray Wennerlund's public input sent to you Thursday the 16th of August. I encourage you to place the solution for the SBA Decline loan issue on the Task Force agenda and to vote in favor of the policy to follow public law 115-123 as official state guidance for the estimated 3,800 Louisiana citizens that Declined the SBA loan because it would have been a hardship on them financially.

Thank you for your time and consideration in this matter.
Wallace Aultman
Prairieville, LA 70769

Sent from Mail for Windows 10

States Response and Wennerlunds Proposal:

From: Lori Dupont on behalf of Pat Forbes
Sent: Thursday, August 30, 2018 11:19 AM
To: 'M W'
Cc: Adam Knapp; Commissioner Mike Strain; Darryl Gissel; Don Pierson; Dr. James Richardson; Shawn Wilson; Jacqui Vines Wyatt; Jimmy Durbin; John Gallagher; Johnny Bradberry; Mayor Dave Norris; Mayor Ollie Tyler; Mayor-President Joel Robideaux; Michael Faulk; Michael Olivier; Randy Clouatre; Representative Edward "Ted" James (2); Representative J. Rogers Pope; Representative Robert Shadoin; Roland Dartez; Sean Reilly; Senator Dan "Blade" Morrish; Aimee Richard; Arlene Adger; Barbara Marrable; Becky Perret; Cami Barlow; Enger Kinchen; Jane Lambert; 'Jayne Norton'; Julie Simms (; Karen Brown; Karen White; Kimberly LaMotte; Michel Zambo; N Jarreau; Nancy Collie; Paine Gowen; Rhea Victorian; Rhonda Byrd; Sabrina Sentino; Susan Wassan

Subject: Murray Wennerlund, Task Force Public Input: Citizens Proposed SBA Disaster Federal Assistance Declined Solution

Attachments: CDBG-DR-Duplication-of-Benefit-Requirements-and-Provision-ofAssistance-with-SBA-Funds - Copy.pdf

Mr. Wennerlund,

Thank you for reaching out to the Restore Louisiana Task Force with both information and recommendations. As you know, the Governor and the Congressional delegation agree with your interpretation and have been working to correct this consideration of the SBA loans as a duplication of benefits. Unfortunately, we have, as yet, not received what we are looking for. Namely, either guidance from HUD clarifying that funds not drawn by an applicant do not count as DOB, or passage of federal legislation prohibiting federal agencies from counting loans as DOB. Until we get either of those, we are compelled by our obligation to spend the funds in compliance with HUD and other federal guidance. To not do so would put all the funds spent non-compliantly at risk of federal recapture.

The important distinction in this debate between the state and HUD is about the word "declined." HUD has so far insisted that “declined” means the homeowner never closed on the loan. We contend, like you, that "declined" means the funds were never drawn, regardless of whether the loan closed or not. Unfortunately, we must follow HUD's directions until they either change their interpretation, as requested by the Governor in April (, or Congress passes the necessary legislation and the President signs it into law.

I mentioned above a letter from the Governor to the HUD Secretary about this matter. HUD's response to this letter references HUD's guidance of July 25, 2013 guidance. At this time, this guidance represents the rules we must follow. We are eager to assist those who have been approved for SBA loans and, as you've pointed out, have the funds available to do so. We are in complete agreement about the need to correct this issue, but it is not accurate to say that it is within our authority, under the current guidance, to provide funds to those who have been approved for an SBA loan and closed on that loan, regardless of whether they have drawn the funds or not. In short, changing our policy on SBA DOB requires a definitive change in directions from our funders in Washington, D.C.

We'd be glad to sit down with you and go over all these documents and correspondence if you like. And again, I thank you for your advocacy on this matter and look forward to being able to tell you soon that we've received the guidance we seek and are able to proceed with program policy changes.

Pat Forbes

Research Resource:

Letter to Task Force Members: Task Force Public Input: Citizens Proposed
SBA Disaster Federal Assistance Declined Solution

EMail from Lori Dupont on behalf of Patrick Forbes.

NOTE: HUD's guidance of July 25, 2013 guidance

Editors Note: In most of the 1,158 discovered homeowners that could have had their SBA grants waived because they were declined by agency it is estimated that only a small number may not have qualified. It is not based on income as many would think but it is based on if the SBA funds are available to you. If the SBA declines you and you are listed as an agency decline you will not qualify for any funds even if you were approved in the beginning. The SBA can decline you at anytime in the process even after the loan amount is approved.

Research Resource:
Email: 2018.
Email: 2018.
Email: 2018.
Email: 2018.
Email: 2018.

Guidance on Duplication of Benefit Requirements and Provision of CDBG-DR Assistance:

Editors Note: Discovery via FOIA identified 1,158 of Agency Declined SBA loans. All or a major number of these homeowners would have been within the states Nov. 16, 2011 and July 25, 2013 Guidance if the state would have actually researched the claims made by Murray Wennerlund. The state published estimated number totally 109 homeowners that would qualify under the Guidance listed. Research found the 109 was not accurate and possibly as much as 1,158 homeowners incorrectly classified as having access to the SBA federal loan assistance but according to the SBA data they have been declined and are not able to receive SBA Loans as federal assistance.

Post Reference: Task Force Public Input: Citizens Proposed SBA Disaster Federal Assistance Declined Solution


FAQ No. 118    

Date: 4-8-2019 Updated: 4-8-2019 Subject:

HUD will also coordinate with FEMA on reports required by section 1210(a)(5) of Public Law 115–254, which will report on efforts to improve coordination between Federal agencies and clarify the sequence of delivery of disaster assistance to individuals.

Research Resource

FAQ No. 173    

Date: 10-8-2019 Updated: 10-8-2019 Subject: HUDGuidance

Do you have a Wells Fargo Home Mortgage?

Did Wells Fargo Home Mortgage apply your NFIP Flood Insurance or Disaster Insurance toward your mortgages unpaid balance?

Did Wells Fargo Home Mortgage forget to email you or mail to you the letter stating their intentions of not giving your NFIP back and applying it to pay the unpaid balance of your mortgage?

If so, you need to write to the following address and ask them to provide you a copy of the letter that goes like this.

Dear Borrower:

This letter is in reference to the flood loss (the &ldquoLoss&rdquo) to your property located at 123 Maple Ave. Good Town USA (the &ldquoProperty&rdquo) upon which Wells Fargo Bank, N.A. (&ldquoWells Fargo&rdquo) holds or services a loan secured by a deed of trust (the &ldquoDeed of Trust&rdquo).

As the mortgage servicer, Wells Fargo Bank, N.A. has a secured investment in the property. In order to fulfill your obligations of the mortgage contract, it is your responsibility to work with Wells Fargo to restore the property to its original value prior to the loss.

In lieu of restoring the value of the property it is your obligation to pay the mortgage in full. The total amount due on your loan is $123,456.78. This payoff figure is good through May 14, 2023.

If you have additional questions, please contact us at 1-866-826-4902 Monday-Friday, 9 am-5 pm Eastern Standard Time.

Mail your demand letter to:
Wells Fargo Home Mortgage
Property Loss Department
PO Box 100522
Florence, SC 29502-0522


For Disaster Victims using HUD CDBG-DR programs you will need to ask for an Exceptions Panel Review. Once you get this letter back or a refusal to provide this letter send your Exceptions Panel Review request to your state.

TO: Your Case Worker / Case Manager / CTA
SUBJECT: Acct# 123456 Forced Mortgage Payoff Exceptions Panel Review Request

RE: Exceptions Panel Review

To Whom It May Concern:

My mortgage servicer Wells Fargo Home Mortgage did not offer any option but to apply my NFIP Flood insurance to the unpaid balance of my home mortgage.

Attached is a copy of the letter from Wells Fargo Home Mortgage.




Research Resources

With the two provided links you will find all of the "BEST CASE" scenarios. You will not find an example as provided above. Be sure you get this letter when your bank tells you over the phone they would like for you to apply your insurance money to the unpaid balance of your home. This is the wrong method and hundreds suffer losses even greater than the disaster itself from this practice. Be sure you get an email and a letter on Wells Fargo letterhead before you agree to any payment method they suggest.

FAQ No. 172    

Date: 10-3-2019 Updated: 10-4-2019 Subject: ForcedMortgagePayoff

Any resident of the state of Louisiana that would like to file a formal complaint about the Restore Louisiana Homeowners Program should do so and use the following physical address to mail your compliant(s) and the email address to email your compliant(s).

Office of Community Development – Disaster Recovery Unit
Email Address: (OCD-DRU)

Send by Postal Mail:

Office of Community Development – Disaster Recovery Unit
P.O. Box 94095 Baton Rouge, LA 70804-9095
ATTN: Executive Director

The OCD-DRU should response within 15 working days of the receipt of your complaint.

The OCD-DRU is required to follow the Citizen Complaint Procedure that is detailed in Section 2 of the states Administrative Manual.

Resource Link Section_2_v3.8.pdf.

If you have any questions about Section 2 of the Administrators manual or any part of the 200+ page manual please email the administrative team of the OCD-DRU for clarification.

Administrative Manual Questions:

FAQ No. 171    

Date: 10-2-2019 Updated: 10-2-2019 Subject: OCDDRU

  • How To Calculate your Households AMI percentage.
  • What steps do you take if you are in Louisiana on how to correct your AMI percentage that is listed in your grant award.
  • What factors change AMI percentages.
AMI percentages are calculated using total household income from all members of the household that are working and over the age of 15.

(Please check if you are required to file taxes. This link may be helpful Table 1. 2018 Filing Requirements Chart for Most Taxpayers
Your AMI percentage uses your Federal Tax Returns Adjusted Gross Income (AGI).
Using the AGI from your tax returns calculate the combined income of all persons working that are required to file taxes living with you at the time of the disaster. If you have had changes to your household that increased directly impact your AMI for 2 or more years use the updated information for your calculation.
  • Person One Adjusted Gross Income: $105,000
  • Person Two Adjusted Gross Income: $20,000
  • Total household income: $125,000

You should be able to contact your states HUD office or the state agency of Community Development and request the most up to date data sheets for AMI. Below you'll find links to 2019 AMI for over 120 percent and 2017 80 percent AMI.

Using the columns select the number of persons living in your home.

"Family sizes in excess of 8 persons are calculated by adding 8% of the four-person income limit for each additional family member. That is, a 9-person limit should be 140% of the 4-person limit, the 10-person limit should be 148%."

Once you have your family income limit, match that number with your total households tax returns.

If your calculated AMI is different from your grant award AMI send an email to your assigned case worker or case manager.

SUBJECT: Account ID: 123456, Last Name AMI Percentage Correction.

Message Body:

I have calculated my AMI percentage using data provided by our state and found the AMI percentage listed in my grant award is not correct. My grant shows 150 percent and my calculation shows 79 percent. I would like to request that you forward my grant to Quality Assurance (QA) and Quality Control (QC) for AMI percentage corrections. Attached you will find the tax returns used to calculate my correct AMI percentage. I have also uploaded the attached documents to my eGrants file folder.

Thank you,
[First Name, Last Name]
[Full Address]
[Grant Account Number]

Depending if you are in Louisiana, Texas, North Carolina Puerto Rico or Florida just to mention a few that will be using this same email your contact will be different except for the IEM Project Manager which most of you have the same person to report to.

You will need to be persistent with your request. You are going to be told to wait, then you will be told that everyone is going to be calculated at the same time. This is an issue the state needs to address and it needs not to provide excuses to why your AMI percentage changes when your records and their records are identical. Many errors are manual input errors and we have seen months even years pass before they are corrected. Allow the state directors to explain why you can not have an accurate grant award with correct information.

If your Case Worker or Case Manager refuses to submit your request to have your grant award information corrected you'll need to go to the project managers level. Most of the disasters in 2016 and 2017 in the southeastern US are managed by IEM Inc. so your contact would be or if in the state of Louisiana it would be Ted.Lemcke@Restore-LA.Org . You will need to look up your specific program manager to be sure. Most times it will be the Homeowners Manager or Director from your states Community Development department (HUD).

Case Workers and Case Manager are not overwhelmed with work so allow one full business day for them to reply. If it takes longer than one full day skip them and go to the program manager.

The program manager will take about 3 business days or less. Once you get word back from the program manager you will either be in the system to correct the issue or you will be escalating the AMI percentage calculation to your states legal department and your project managers legal department. For Louisiana this is for the project manager and for the state.

If legal departments after 3 days do not have the issue corrected or refuse to correct your federal grant award AMI percentage you will then need to forward all emails to your states housing manager. For Louisiana this is Spring.Garcia@LA.Gov .

It takes time to process this information and AMI percentage seems to be a manual calculation based on the number of reported areas in what should be a scripted formula.

The QA/QC process typically takes 30 days. You'll know it's being processed when you see your grant page locked. Check it daily after you start.

FAQ No. 159    

Date: 8-22-2019 Updated: 10-1-2019 Subject: AMI

Understanding Phases for SBA Loan Repayments.

According to the Action Plan Amendment we have 2 phases.

Phase I

  • Declined and Undisbursed SBA Disaster Loans.
    • SBA Zero Draw Population totaling 1,168 households
    • SBA Partial Draw Population (Award Increase) totaling 11 households
  • Total Combined Amount: $38,881,580.00

Phase II

  • Disbursed SBA Loan Adjustments (LMI).
    • LMI Phase II Adjustments (LMI)
    • SBA Partial Draw Population
    • SBA 100% Draw Population
  • LMI Phase II Adjustments (80%-120% AMI)
    • SBA Partial Draw Population
    • SBA 100% Draw Population
  • LMI Phase II Adjustments (>120% AMI)
    • SBA Partial Draw Population
    • SBA 100% Draw Population
  • Total Combined Amount: $198,945,412.00

Total needed based on Action Plan 12 is $237,826,992.00.
Using the phase process order from APA 12 HUD Grant money to repay SBA Loans will be spent in the order listed above.
Adjustments in amounts that will be paid will be made as the program progresses.
The design of APA 12 is to follow HUD National Objectives in order of HUD Guidance June 20, 2019.
The Stafford Act Amendment which was passed in Public Law 115-254 and signed by president Trump and sponsored by Congressman Graves did not include limited assistance based on income class. With that said, HUD Guidance (2019) only required the state to balance the books with a simple percentage 55% and 45% which when put into numbers the state announced would be;

  • Total Allocation: $1,708,407,000
  • Total to assist LMI: $939,623,850
  • Total to assist urgent needs: $768,783,150

The state of Louisiana was told under public law 114-223 (11/21/16), 114-254 (01/18/17) and 115-31 (08/07/17) how much money and what it was to be spent on.
Research State Spending.

Since Dec. 2017 the SBA DOB battle began in our state and the state was given the totals of everyone's loan directly from the SBA.

Questions you may want to ask:

  1. Did the Restore Louisiana Homeowners Assistance Program properly manage the SBA reimbursement promise that was made by the State OCD-DRU and authorized by HUD Guidance June 20, 2019?
  2. Was $683 million available in July 2018 when task force members were updated on totals available to repay SBA loans?
  3. Was $245.5 reserved as the required amount in Oct. 2018 as congressional leaders told the state to "Cut the Checks?

According to Action Plan 12, the sequence of delivery is designed to blame HUD's National Objectives for the reason not all households will receive grants to repay SBA loans.

Note: If I can research state policy and it's numbers as published by the state and cross reference the same numbers with the numbers in the states HUD system and find issues imagine what a state house oversight committee could find. If they need help I'll point them in the direction they need to go to find every dime promised to the people of Louisiana.

FAQ No. 170    

Date: 9-30-2019 Updated: 9-30-2019 Subject: SBALoans

State of Louisiana is first state to be allowed by HUD to use HUD grant money to pay off SBA Disaster Loans for disasters between 2015 and 2017. (Other options are valid until 2021 and 2023)

The state of Louisiana has setup a 3 phase disbursement program.

Phase I: Declined and Undisbursed SBA Disaster Loans.

HUD Guidance June 20, 2019 updates HUD Guidance November 16, 2011 and clarifies that any person that applied for an SBA disaster loan but declined the loan or only took part of the loan will not be penalized by the duplication of benefits calculation for loan money not drawn or received.

The state of Louisiana references the Disaster Recovery Relief Act but HUD's Guidance on Declined SBA Loans comes from H.R.1892 - Bipartisan Budget Act of 2018 Senate Bill 2226 Sponsored by Senator Marco Rubio read into the H.R. 1892 by Senator John Kennedy, co-sponsored by Senator Bill Nelson, Senator Cornyn John and Senator Ted Cruz on S. 2226.

The state of Louisiana immediately adjusted the award calculations for over 1,168 households that were reported to have been penalized by declining the SBA Disaster Loan.

See reference materials:

Public Law 115-123 which now allows Americans in Disaster areas to refuse the SBA Disaster Loan application process as well as refusing the SBA Disaster loan itself without states holding the approved loan amount against the disaster victim. (See why not to use SBA Disaster Loans.)

The law allows you to not sign the loan closing documents even if you are instructed by your state Grantee as some states have been reported as doing. It was reported that Alaska instructed people to take the SBA loans or no other federal assistance would be provided.

Louisiana held out as long as it could before revising the method the state calculates SBA loans as a duplication of federal benefits.

Under Phase 1 the state addressed only those homeowners that did not require the state to submit an action plan for change. HUD simply instructed the state of Louisiana grantee under the control of the Governor of Louisiana to follow the Feb. 9, 2018 law signed by President Trump.

Our research found that the state penalized 1,158 homeowners and refused to correct the issue until HUD ordered the state to do so. The state was willing to allow 1,168 homeowners to be penalized and not receive federal disaster relief funds to rebuild after the floods because the households refused to take the SBA disaster loan. Even with risk of default the state leaders refused to allow any waivers to those that declined or had their SBA loans canceled by the SBA.

The final numbers provided by the state were, 1,168, which 863 declined the loans and 305 that signed the closing documents but didn't draw on the funds.

Our research article was published shortly after we discovered the state was unwilling to address the issue and restricted it's estimates to less than 105 total households with SBA hardships. Today we know differently what the state truly was planning, and that was not to award 1,168 families disaster recovery grants because they refused to add to their household debt burden by accepting an SBA disaster loan.

The State of Louisiana Office of the Governor and it's executive branch agency funded by federal tax dollars the Office of Community Development Disaster Recovery Unit was willing to allow

  • 172 Homeowners and families living at below 80% AMI to lose access to $5,744,232 in grants
  • 198 Homeowners and families making 80% to 120% AMI to lose $6,413,567 in grants
  • 798 Homeowners and families living in upper income limits of greater than 120% AMI to lose access to $26,502,908 of HUD Grant funds.

Will your state act as the state of Louisiana and look to penalize 1,168 homeowners for over $38,660,707.00 in grant funds?

The $38,660,707.00 may have had someone's fingers on it if HUD didn't provide this historical first in HUD Guidance instructing the state Grantees to follow a law signed by President Trump. We might have never seen these families recover from their disaster if it wasn't for HUD and the new Public Law 115-123.

Research Resource:

  1. HUD Guidance June 20, 2019
  2. HUD Guidance letter June 12, 2019
  3. State of Louisiana emails related to HUD Guidance
  4. State of Louisiana SBA DOB calculations
  5. Citizens proposal to correct the SBA DOB issue under public law 115-123
  6. Public Law 115-123

FAQ No. 169    

Date: 9-30-2019 Updated: 9-30-2019 Subject: SBALoans

V.D. Multiple Disasters

When multiple disasters occur in the same location, and the applicant has not recovered from the first disaster at the time of a second disaster, the assistance provided in response to the second disaster may duplicate assistance for the same purpose and need as assistance provided after the first disaster.

HUD recognizes that in this scenario, DOB calculations can be complicated. Damage from a second disaster, for example, may destroy work funded and completed in response to the first disaster. The second disaster may also damage or destroy receipts and other documentation of how applicants expended assistance provided after the first disaster.

Therefore, HUD is adopting the following policy that is applicable to circumstances when two disasters occur in the same area, and the applicant has not fully recovered from the first disaster before the second disaster occurs: Applicants are not required to maintain documentation related to the use of public disaster assistance (Federal, State, and local) beyond the period required by the agency that provided the assistance. If documentation cannot be provided, the grantee may accept a self-certification regarding how the applicant used the other agency's assistance, provided that the applicant is advised of the criminal and civil penalties that apply in cases of false claims and fraud, and the grantee determines that the applicant's total need is consistent with data the grantee has about the nature of damage caused by the disasters (e.g., flood inundation levels). For example, a second disaster strikes three years after an agency provided assistance in response to the first disaster, and that agency required applicants to maintain documentation for two years, the grantee may accept a self-certification regarding how the applicant used the other agency's assistance.

Applicants must continue to follow all requirements to obtain and maintain flood insurance as a condition of receiving Federal flood disaster assistance. No Federal disaster relief assistance made available in a flood disaster area may be used to make a payment to a person for repair, replacement, or restoration for damage to any personal, residential, or commercial property if that person at any time has received flood disaster assistance that was conditional on the person first having obtained flood insurance under applicable Federal law and subsequently having failed to obtain and maintain flood insurance as required under applicable Federal law on such property. See 42 U.S.C. 5154a.

Research Resources:


  • Grantee = State Managing HUD CDBG-DR funds
  • Aggregate amount = Total Dollar Amount
  • Subsidized loans = SBA loans

FAQ No. 168    

Date: 9-24-2019 Updated: 9-24-2019 Subject: HUDGuidance

V.C. Order of Assistance

CDBG–DR appropriations acts generally include a statutory order of assistance for Federal agencies. Although the language may vary among appropriations, the statutory order of assistance typically provides that CDBG–DR funds may not be used for activities reimbursable by or for which funds are made available by FEMA or the Army Corps. This means that grantees must verify whether FEMA or Army Corps funds are available for an activity (i.e. the application period is open) or the costs are reimbursable by FEMA or Army Corps (i.e., the grantee will receive FEMA or Army Corps assistance to reimburse the costs of the activity) before awarding CDBG–DR assistance for costs of carrying out the same activity. If FEMA or Army Corps are accepting applications for the activity, the applicant must seek assistance from those sources before receiving CDBG–DR assistance. If the applicant's costs for the activity will be reimbursed by FEMA or the Army Corps, the grantee cannot provide the CDBG–DR assistance for those costs. In the event that FEMA or Army Corps assistance is awarded after the CDBG–DR to pay the same costs, it is the CDBG–DR grantee's responsibility to recapture CDBG–DR assistance that duplicates assistance from FEMA or the Army Corps.

Under the Stafford Act, a federal agency that provides duplicative assistance must collect that assistance. For CDBG–DR grants, the CDBG–DR grantee must collect duplicative assistance it provides.

FEMA regulations at 44 CFR 206.191 set forth a delivery sequence that establishes which source of assistance is duplicative for certain programs. CDBG–DR assistance is not listed in FEMA's sequence, but as a practical matter, CDBG–DR assistance duplicates other sources received before the CDBG–DR for the same purpose and portion of need. Any amount received from other sources before the CDBG–DR assistance that is determined to be duplicative must be collected by the grantee. The mandatory agreement to repay (discussed in VII. below) can be used to prevent duplication by assistance that is available, but not yet received. If the duplicative assistance is received after CDBG–DR, the grantee must collect the DOB or contact HUD if it has questions about whether another Federal agency is responsible for collecting the duplication.

Research Resources:


  • Grantee = State Managing HUD CDBG-DR funds
  • Aggregate amount = Total Dollar Amount
  • Subsidized loans = SBA loans

FAQ No. 167    

Date: 9-24-2019 Updated: 9-24-2019 Subject: HUDGuidance

V.B.1. Subsidized Loans For this notice, subsidized loans (including forgivable loans) are loans other than private loans. Both SBA and FEMA provide subsidized loans for disaster recovery. Subsidized loans may also be available from other sources. Subsidized loans are assistance that must be included in the DOB analysis, unless an exception applies.

As a general rule, CDBG–DR grant funds are available only to pay for new activities. However, most Federal Register notices governing CDBG–DR grants permit payment of costs dating back to the date of the disaster that led to the CDBG–DR grant award. These Federal Register notices require grantees to adhere to reimbursement requirements previously established by HUD when reimbursing applicants' costs.(Resource #5) Reimbursement is not permitted if payment of the cost with CDBG–DR funds will cause a DOB because an exception does not apply or violate the requirement that CDBG–DR funds shall not be used for activities reimbursable by, or for which funds are made available by, FEMA or the Army Corps of Engineers.

Research Resources:

FAQ No. 166    

Date: 9-24-2019 Updated: 9-24-2019 Subject: HUDGuidance

Cancelled Loans: Cancelled loans are loans (or portions of loans) that were initially accepted, but for a variety of reasons, all or a portion of the loan amount was not disbursed and is no longer available to the applicant. The cancelled loan amount is the amount that is no longer available. The loan cancellation may be due to default of the borrower, agreement by both parties to cancel the undisbursed portion of the loan, or expiration of the term for which the loan was available for disbursement.

The following documentation is sufficient to demonstrate that any undisbursed portion of an accepted subsidized loan is cancelled and no longer available: (a) A written communication from the lender confirming that the loan has been cancelled and undisbursed amounts are no longer available to the applicant; or (b) a legally binding agreement between the CDBG–DR grantee (or local government or subrecipient administering the CDBG–DR assistance) and the applicant that indicates that the period of availability of the loan has passed and the applicant agrees not to take actions to reinstate the loan or draw any additional undisbursed loan amounts. The documentation described above must be maintained by the grantee. Without this documentation, any approved but undisbursed portion of a subsidized loan must be included in the grantee's calculation of the total assistance amount unless another exception applies.

For cancelled SBA loans, the grantee must notify the SBA that the applicant has agreed to not take any actions to reinstate the cancelled loan or draw any additional undisbursed loan amounts.

Research Resources:


  • Grantee = State Managing HUD CDBG-DR funds
  • Aggregate amount = Total Dollar Amount
  • Subsidized loans = SBA loans

FAQ No. 165    

Date: 9-24-2019 Updated: 9-24-2019 Subject: HUDGuidance

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