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State of Louisiana OCD-DRU Action Plan Amendment 12 asks HUD for approval to change SBA Loan repayment multiplier based on hardship matches.
APA 12, Page 19 the State of Louisiana Office of Community Development spells out hardships only after it spells out the option to change the repayment multiplier from 0.50 to anything between 0.0 and 100.
"Dependent on the proportion of applicants with incomes in excess of 120% AMI who also meet one or more of the approved hardship criteria, the state reserves the right to adjust this multiplier accordingly if it can do so and remain within required overall LMI benefit parameters."
Hardship Criteria for Homeowner Populations with Incomes Exceeding 120% AMI.
- Hardship due to housing cost burden. Individuals who spend more than 30% of their monthly gross income on housing costs are expected to experience hardship in recovery due to having limited financial resources
- Hardship due to SBA loan repayment. Individuals who spend more than 15% of their monthly discretionary income on SBA loan repayment are expected to experience hardship in recovery due to having limited financial resources
- Hardship due to advanced age. Individuals who are of an advanced age and are retired or for whom retirement is expected during the repayment period of the SBA loan. The reduced income or anticipated reduction of income that comes with retirement is likely to cause a hardship during the loan repayment period
- Hardship due to cost of caring for dependents. Homeowners responsible for providing care to parents, children, grandchildren, and other dependents have long-term financial commitments to consider when contemplating incurring additional debt. Additional debt would be a burden and limit available resources needed to provide for dependents
- Hardship due to major illness and/or death of wage earner. Households that have experienced a major illness or death of a household wage earner are anticipated to experience hardship in repaying SBA loans and completing recovery
- Hardship due to costs associated with higher education for self or dependents. Tuition and living expenses for dependents in higher education present significant financial needs to homeowners. Household resources are strained to accommodate education-related expenses and homeowners may not have adequate monthly cash flow to support an additional note
- Hardship due to loss of employment or reduction in income. A loss of income or job following the qualifying disaster event can impact the ability to repay a loan
- Hardship due to costs associated with disability and/or special needs. Additional costs related to evacuation, relocation, and rebuilding for a disabled/special needs household puts an increased burden on financial resources that might otherwise be contributed to recovery
- Hardship due to depletion of retirement account. Households who withdraw funds from their retirement account(s) after the qualifying disaster are anticipated to experience hardship during the repayment period of their SBA loan due to the loss of future retirement income.
The information provided on page 19 of the Restore Louisiana Homeowners Program Action Plan Amendment 12 appears to not include young, healthy singles, couples in the >120% AMI income bracket. This could be offset by repealing some programs for Economic Development and Infrastructure not targeted to the below 80% AMI Community.