Home and Property Disaster Loans

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Home and property disaster loans are a form of federal assistance or government loans that are given out to homeowners and tenants in disaster hit areas to repair and rebuild their property. The amounts of these loans, which fall under the category of housing loans, help to cover losses that individuals are not able to recover through insurance or any other sources. The losses can be recovered both with regard to damages to their homes and loss of personal property, which justifies the name given to this government loan.

These government loans are actually disbursed by the US Small Business Administration (SBA). However, it is not restricted to small business owners. Any homeowner who has suffered damages to his or her property in a declared disaster area is eligible for these housing loans. Renters and tenants are not eligible to apply for property damages. However, they can recover losses on personal property. Homeowners can get up to $200,000 for repairing or rebuilding their residence as long as the amount is not used for any modification or up gradation unless it is required to prevent further damage in the event of future disasters of a similar nature.

Besides this, tenants and homeowners are also eligible to get home and property disaster loans to replace their personal property lost due to the disaster. These could include clothing, cars, furniture and other basic items that are not part of the actual structure of the home. The housing loans given out for this purpose cannot exceed $40,000.

The amount of loan that can be accessed is determined after the individual contacts his insurance company to verify the amount he can claim from them. Any amount in excess of the amount payable by the insurer can be accessed from the SBA government loans. In instances where there is a delay in processing of payments by the insurance company, the borrower has the option of applying to the SBA for the complete amount of damages and then instructing the insurance company to pay the insured amount directly to the SBA once it is processed.

The process of applying for these housing loans from the SBA involves making a detailed item wise list of the various losses suffered due to the disaster. The expense likely to be incurred to repair or replace each item should also be listed. Once the application is submitted, a verifier from the SBA will visit your home, assess the damages, and verify if your claims are reasonable. After he reports back to the SBA, if there are no irregularities in your claims, home and property disaster loans can be given out within 14 days.