FEMA’s Route to SBA – No Government Assistance in Repayment

Where Will The $1.3 Billion Go?

Those of us who had to borrow money from the U.S. Small Business Administration (SBA) to rebuild our homes after the catastrophic August flood as of now,  are  not getting government funds to help pay off that debt.  flood

As we stood in the stifling heat, under the Federal Emergency Management Agency (FEMA) tents, we wanted advice. Good advice.  We did what FEMA said to do.  FEMA adjusters came out, some FEMA money was paid out, then we were advised to go the SBA route to borrow the money to complete the repairs on our homes.  Thirty year loans now attached to our already first mortgages, and no help in sight.

That was the word Monday, February 6th, 2017, during a public  hearing at the Baton Rouge Community College’s Mid-City campus.

Low-Moderate Income, and Disabled will Receive Aide

As of now, the plan prioritizes low- to moderate-income households that are outside the 100-year floodplain, and did not have flood insurance.  These include households that have disabled family members and got at least a foot of water. The funding will help an estimated 36,000 households statewide for the floods in March, and the most recent catastrophic flooding in August, 2016.

Overlooking the Middle Class?

lafloodThose who live in the 100-year-flood plain, many in the Sherwood Forest area, are now staring at 30-year loans. People in their mid 50’s & 60’s are not going to be financially able to absorb this additional payments, and plan to retire.  These are part of the middle class that government aid programs often overlook.

The federal government considers the loans a “grant” and a benefit that cannot be duplicated under the law. Though Gov. John Bel Edwards is seeking changes to that, and other limitations imposed on the plan, by the U.S. Department of Housing and Development and the federal law.

Grant Vs. Loan

The SBA piece continues to cause frustration to us since it IS a loan,  it is not a grant. The governor is asking for a reversal of that. The governor said Congress allowed repayment of SBA loans after Hurricane Katrina, through special programs, but that is the only example officials know of.

Coming Up Short

The state plan sets aside $1.3 billion for homeowner programs, that is still $2 billion less than what Edwards had asked Congress for last year.  The result, the program has had to narrow who is eligible.

The initial plan in December had even tighter restrictions. State officials heard from residents during an earlier round of public comments that the state needs to provide more funds to the people.  This plan will offer some reimbursement of out-of-pocket flood recovery expenses.

With the funds available, and the plans to distribute these funds, the middle class will be out of luck-again.  Nobody is going to deny that funds to the elderly, disabled and low income need to be a priority, but we can’t help but feel penalized for following the instructions of FEMA early on.

It is a wait and see now.  President Trump toured our area and gave out supplies during his visit.  Hopefully, we are still at the forefront of a very busy President’s mind in his first 100 days in office.

Housing Shortage

With all of the homes that have flooded, we have seen many previous homeowners scramble to find a suitable place to live while they rebuild.  Many people are being forced to commute back to their jobs in the area from hours away.  One of the places that has seen an influx of renters and home buyers due to the flood is Picayune MS.  With the inexpensive home prices and the relative proximity to the flooded area, Picayune homes have seen a spike in home sales.  Other areas that have seen a spike in home sales due to flooded homeowners needing to temporarily relocate is Slidell LA and some other smaller towns around the area.



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