SBA Home and Property Disaster Loans

The U.S. Small Business Administration (SBA) offers low interest loans not only to businesses but also to homeowners, renters, and/or personal property owners impacted by declared disasters. A home and property disaster loan can help to cover losses not covered by insurance or other disaster-related funding from FEMA. Interest rates on home and property disaster loans range from 4%-8% depending on if the applicant is able to obtain credit elsewhere. Loans can have terms of up to 30 years.

Homeowners may apply for up to $200,000 to replace or repair their primary residence. Secondary homes are not eligible; however, rental properties may be eligible for a business disaster loan. Homeowners and renters can borrow up to $40,000 to replace or repair personal property (such as clothing, furniture, cars, and appliances) damaged or destroyed by the disaster.

Eligible borrowers may choose to receive expanded funding (of up to 20%) to help mitigate their home or business against future disasters through building improvements.

Next Steps:

1. Confirm SBA has issued a disaster declaration in your area.
2. Apply online for an SBA disaster assistance loan. There is no-cost to apply and you are under no obligation to accept a loan if approved.
3. Submit a signed and dated IRS Form 4506-C giving permission for the IRS to provide SBA your tax return information.
4. Prepare for a site visit from an SBA inspector to assess the cost of your damage once you have returned your completed loan application.

Special Considerations:

• Collateral is typically required for loans of over $25,000 but, depending on your circumstances, SBA will not decline a loan for lack of collateral.
• In some cases, SBA can refinance all or part of a previous mortgage when the applicant does not have credit available elsewhere and has suffered substantial disaster damage not covered by insurance.
• Proceeds from insurance coverage on your home or property will be deducted from the total damage estimate to determine the eligible loan amount.
• For applicants unable to obtain credit elsewhere, the interest rate will not exceed 4%. For those who can obtain credit elsewhere, the interest rate will not exceed 8%.
• Repayment terms will depend upon your ability to repay the loan.
• The loans may not be used to upgrade homes or make additions, unless required by local building code.
• In addition to flood mitigation projects, the SBA also suggests mitigation projects for preventing/minimizing wind, wildfire, earthquake, and hail damage on its website.
• SBA must approve your proposed mitigation measures before any loan increase is granted.