Homeowners, renters may be eligible for SBA disaster loans

Aug. 26--ASHLAND -- Northeast Kentucky homeowners and renters who suffered losses in July storms and floods may be eligible for low-interest loans and other assistance in rebuilding.

The U.S. Small Business Administration offers the loans to qualified people in declared disaster areas, SBA spokesman Richard C. Daigle said. That includes Johnson, Carter and Rowan counties in Northeast Kentucky, all of which were hit by crippling severe weather between July 11-20 and were subsequently declared disaster areas.

Eligible homeowners may borrow up to $200,000 to replace or repair homes damaged by the disaster, and both homeowners and renters may be eligible to borrow up to $40,000 to cover destroyed or damaged personal property, Daigle said.

Non-farm businesses and private non-profit organizations may be eligible for up to $2 million in loans for repair or replacement of physical damage.

SBA officials work in tandem with the Federal Emergency Management Agency when disaster strikes to help with recovery, Daigle said. FEMA offers grants that target initial cleanup expenses, but the grants seldom are sufficient for rebuilding and major repairs.

The SBA loans fill that gap. The low-interest loans -- rates can be lower than 2 percent -- are offered directly through the federal government, not banks.

Loans are limited to the amount necessary to restore the dwelling or contents to pre-disaster condition, minus any other insurance or grants.

Loans can help with relocation and in some cases with refinancing mortgages.

Loans are available to small businesses for economic injury in counties contiguous to the disaster area counties. That includes Boyd, Elliott, Greenup and Lawrence, among others.

Economic injury loans would cover losses such as sales lost during business closure.

Applicants can expect to hear within 21 days whether they qualify, Daigle said. Making the initial application in a timely fashion is important and doesn't obligate the applicant, he said.

For the July disasters the deadlines are Oct. 12 for physical damage and May 12, 2016 for economic injury.

Applicants don't need to wait for insurance determinations to apply, Daigle said. Any subsequent additional insurance settlement could be applied to the loan repayment.

The SBA uses similar criteria to qualify borrowers -- income, credit score and so on, Daigle said. Borrowers who are not approved are automatically referred back to FEMA, where they may be eligible for alternate aid.

Registering with FEMA is the first essential step and filing the SBA application is the next, he said. "If they don't apply to the SBA, they've stopped themselves in the recovery process."

Borrowers may apply online at sba.gov or by telephone at (800) 659-2955.

MIKE JAMES can be reached at [email protected] or (606) 326-2652.

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