Program Description

The U.S. Small Business Administration (SBA) is responsible for providing affordable, timely and accessible financial assistance to homeowners and renters located in a declared disaster area. Financial assistance is available in the form of low-interest, long-term loans for losses that are not fully covered by insurance or other recoveries.

Homeowners may be eligible for up to $200,000 to repair or replace their primary residence that was damaged or destroyed in a declared disaster event. In some cases, SBA may be able to refinance all or part of a previous mortgage (not to exceed $200,000) when the applicant does not have credit available elsewhere, has suffered substantial disaster damage not covered by insurance, and intends to repair the damage. SBA considers refinancing when processing each application. Loans may also be increased by as much as 20 percent of the verified losses (not to exceed $200,000) to mitigate damages from possible future disasters. Secondary homes or vacation properties are not eligible for home disaster loans; however, qualified rental properties may be eligible for assistance under the business disaster loan program.

Renters and homeowners may borrow up to $40,000 to replace damaged or destroyed personal property such as clothing, furniture, appliances, automobiles, etc. This loan may not be used to replace extraordinarily expensive or irreplaceable items, such as antiques, collections, pleasure boats, recreational vehicles, fur coats, etc.

Program Requirements

In order to qualify for this benefit program, homeowners and renters must have sustained physical damage and be located in a disaster declared area.

Credit Requirements: SBA's assistance is in the form of loans, as such SBA must have a reasonable assurance that such loans can and will be repaid based on satisfactory credit and repayment ability.

Collateral Requirements: Collateral is required for all home disaster loans over $25,000, to the extent it is available. Real estate is the preferred form of collateral. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral if it is available.

Loan Terms

Disaster survivors must repay SBA disaster loans. SBA can only approve loans to applicants with a reasonable ability to repay the loan and other obligations. The terms of each loan are established in accordance with each borrower's ability to repay. The law gives SBA several powerful tools to make disaster loans affordable: low fixed interest rates, long-terms (up to 30 years), and refinancing of prior real estate liens (in some cases). As required by law, the interest rate for each loan is based on SBA's determination of whether an applicant has credit available elsewhere and can fund their own recovery without incurring a financial hardship.

The SBA can provide up to $200,000 to homeowners to repair or replace their primary residence. Homeowners and renters are eligible for up to $40,000 to help repair or replace personal property. There are no upfront fees or early payment penalties charged by SBA.

Additional Information

Additional Information
Max Loan Length30 years
Interest RateCannot exceed 4% if no credit elsewhere. Cannot exceed 8% if credit available elsewhere
Max Loan Amount$200,000 for real estate, $40,000 for personal property
Payment FrequencyMonthly
Prepayment PenaltiesNo
Loan Categories
House loans
Housing Loans