Federal Mortgage Assistance for Disaster Victims
Are you a homeowner or renter that lives in a declared disaster area? If so, you may be eligible for a low-interest, long-term loan for losses you’ve sustained that are not covered entirely by your insurance.
The United States Small Business Administration (SBA) provides affordable financial assistance for eligible homeowners and renters who live in declared disaster areas. Home and Property Disaster SBA loans provide federal assistance to repair and rebuild non-farm disaster loss in the private sector. The loans provided by this program are the only assistance the SBA does not limit to small business.
Up to $200,000 may be loaned to repair or replace your primary residence to the condition it was in prior to the disaster. You may not use the loan to upgrade your home or build onto it. Structural improvements may be required by building codes in order to repair the damage, and the loan may be used for this.
In order to protect the property from future disaster damage, you may increase your loan up to 20 percent more than the verified loses. Your loan may not exceed a total of $200,000, however.
For the replacement or repair of personal property, like automobiles, furniture, clothing or other items, homeowners or renters may apply for up to $40,000 for a personal property loan. Personal property, as a rule, is considered anything that is not real estate or part of the home structure. The loan may not be used to replace collections, recreational vehicles, pleasure boats, fur coats or other such irreplaceable or extraordinarily expensive items.
To be considered for the program, you must be a homeowner or renter who is located in a county declared as a disaster area. You must also be able to verify that you have sustained physical damage to your property due to the disaster.
Terms of the loan require you to repay the SBA disaster loan. You must also show reasonable financial ability and capacity to repay the SBA loan obligations from current earnings. Each loan will have terms specific to the borrower’s ability to repay the loan. Federal law provides the SBA many effective avenues to ensure disaster loans are affordable. Advantages such as a long term up to 30 years, low fixed-mortgage rates and, in some cases, refinancing of real estate liens are built into the program.
It is determined by the SBA whether an applicant is able to borrow or has personal resources available for use in overcoming the disaster. The SBA bases the mortgage rate for the loan on this determination. Up to $200,000 may be approved by the SBA for a loan to homeowners for the repair or replacement of their primary residence. Up to $40,000 is available for homeowners or renters who are eligible to assist in the replacement or repair of personal property. The SBA charges no upfront fees nor are there any penalties for early payment.
To apply for the program, see the following:
* Call the SBA about the program
* Visit the website – go to govloans, select “Housing” under the Loan Quick Search heading, then select “Home and Property Disaster Loans”
* Contact the SBA via email – DisasterCustomerService@sba.gov
* Apply for a disaster loan online on the sba.gov website
You can visit the Federal Emergency Management Agency (FEMA) website for more information or to see if you live in a region that is listed as a declared disaster area.
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