Home and Property Disaster Loans

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The U.S Small Business Administration (SBA) offers financial assistance in the form of disaster relief loans to those who own homes or have rented homes or run a business or a small agricultural cooperative in a locality declared as a disaster area and have been the victim of a disaster. Such home and property disaster loans are made available at affordable low interest rates and such government loans are usually for a long period to take care of losses not covered under general insurance.

The various types of disaster loans are:

Home Disaster Loans

These are loans to repair and restore lost real estate or personal property owned by the victim which has been damaged due to a disaster. Similarly, renters can claim their personal property losses.

Business Physical Disaster Loans

These are loans to businessmen to restore and repair business property damaged in a disaster. This includes machinery, inventories, real estate etc. Private organizations and charitable and religious institutions running for non profit are also covered under such government loans.

Economy Injury Disaster Loans

To meet the cost of a disaster, small businesses, agricultural cooperatives and private and non profit institutions are offered financial aid irrespective of their size of operations.

EIDL Loans

EIDL loans are financial assistance to only those entities that are unable to afford the recovery costs from non-government supplies.

On approval of the loan application, the amount of disaster relief loans that you are eligible for is $200,000. Apart from this, you may also be covered for the cost of improvements in the form of mitigation loans to safeguard your property against future damage. However, this may not be more than 20% of total amount of damage caused due to disaster to real estate or leasehold improvements as validated by the SBA, or the maximum amount stipulated. Renters and home owners are also eligible for personal property loans up to a maximum of $40,000 to restore and replace personal property in the nature of automobiles, clothing and even furniture. Other real estate or that which does not form part of the building structure are considered personal property. However, such home and property disaster loans cannot be used to repair items such as antiques, fur coats, vehicles used for recreation etc.

Only applicants who show reasonable ability to repay the loan are granted such government loans. The interest rates are low, which are determined by SBA depending on each individual’s capacity and ability to borrow and repay. The maximum term of such disaster relief loans is 30 years and there are no upfront fees or penalties for early payment. In some cases, refinancing of prior real estate liens is also available. More information about the application process and other details of home and property disaster loans can be obtained from the SBA website.