Home & Personal Property Disaster Loans FAQs


Q. How much can I borrow? 
A. The amount of money that the SBA will lend you will be based upon the actual cost of repairing or replacing your home and/or personal property, minus any insurance settlements or other reimbursements or grants. The total loan amount is subject to the limits set out above.
Q. Must I use my own money or try to borrow from a bank before coming to the SBA?
A. No.  
Q. I already have a mortgage on my home. I can't afford a disaster loan plus my current mortgage payment. Can the SBA refinance my mortgage? 
A. In certain cases, yes. The SBA can refinance all or part of prior mortgages, evidenced by a recorded lien, when the applicant: 1) does not have credit available elsewhere; 2) has suffered substantial uncompensated disaster damage (40 percent or more of the value of the property); and 3) intends to repair the damage. An SBA disaster loan officer can provide more detailed information on your specific situation.  
Q. What information do I need to submit for a home and/or personal property loan?
A. The necessary information is specified in the loan application. In all cases, it includes an itemized list of personal property losses with the repair or replacement cost of each item. It also includes permission for the IRS to give the SBA information from your last two federal income tax returns. If you have pictures of the damaged property, you can include them as well.  
Q. Will the SBA check the losses I claim? 
A. Yes. Once you have returned your loan application, an SBA loss verifier will visit you to determine the extent of the damage and the reasonableness of the loan request.  
Q. How soon will I know if I qualify for a loan?
 A. That depends on how soon you file a complete SBA loan application. The SBA disaster relief program is not an immediate emergency relief program such as Red Cross assistance, temporary housing assistance, etc. It is a loan program to help you in your long-term rebuilding and repairing. To make a loan, we have to know the cost of repairing the damage, be satisfied that you can repay the loan, and take reasonable safeguards to help make sure the loan is repaid. The SBA loan application asks for the information we need. The faster you return it with all the needed information, the faster we can work on it. We try to make a decision on each complete application within seven to 21 days. Applications filed early can be completed in a much shorter 
time.  We process applications in the order received, so file early. Be sure your application is complete; missing information is the biggest cause of delay. 
Q. How soon can I expect the money? 
A. Loans over $10,000 have to be secured. We won't decline a loan just because you do not have enough collateral, but we do ask for whatever collateral is available. This means that after a loan is approved there are other steps you must take. Usually, the security consists of a first or second 
mortgage on the damaged real estate. After we approve the loan, we will tell you what documents are needed to close the loan.  You return the loan-closing documents to us, we can order the checks. You will receive the money in installments as you need it to repair or replace the damage. 
Q. Should I wait for my insurance settlement before I apply to the SBA?
 A. No. If you do not know how much of your loss will be covered by insurance or other sources, the SBA will consider making a loan for the full amount of the loss, up to our loan limits, provided that you assign the insurance check to the SBA to reduce the amount of the loan.
Q. I would like to get a contractor's estimate for the cost of repairing damage to my home, but I'm having trouble finding one. Should I hold up my application until I get the estimate?
 A. No. You might miss the deadline for filing your application while waiting for a contractor's estimate. If you have an estimate, include it. The SBA will verify any damage estimates listed on your loan application. Also, the sooner you file a completed application, the sooner the SBA can process it.  
Q. If I receive a disaster loan, may I spend the money any way I want?
A. No. The disaster loan is intended to help you return your property to the same condition it was in before the disaster. Your loan will be made for specific and designated purposes. Remember that the penalty for misusing disaster funds is immediate repayment of one-and-a-half times the original amount of the loan. The SBA requires that you obtain receipts and maintain good records of all loan expenditures as you restore your damaged property and that you keep these receipts and records for three years.
Q. If my home is completely destroyed, can the SBA lend me money to relocate my home somewhere else?
A. If you are unable to obtain a building permit to rebuild or replace your home at its original site, the cost of relocating your home might be included in the loan amount. If, however, you decide to relocate your home without being required to, an SBA loan can be obtained only for the exact amount of the damage. SBA can not make loans involving some relocations. An SBA disaster loan officer can provide more detailed information on your specific situation.  
Q. I am a farmer. My home was damaged, and so were my barns, fences, and some of my crops. Am I eligible to apply for SBA assistance?
A. You may apply to the SBA for a loan to cover the damage to your home and its contents only. But it may be in your interest to seek assistance first 
from the U.S. Department of Agriculture for all your damage. 
Q. Are secondary homes or vacation homes eligible for loans?
A. No, not as homes. They may be eligible for business disaster loans under certain conditions.  SBA will also consider situations where a family member may occupy a property owned by someone else in the family, i.e. , extended family.
Q. Are there any other limitations?
A. Yes. Generally, loans will not be made for damage to personal pleasure boats, planes, recreational vehicles, antiques, collections, etc. Also, amounts for landscaping, family swimming pools, etc., are limited.
Q. Is there a minimum monthly payment, and when would the first payment be due?
A. The SBA does not have a minimum monthly payment. Payments vary depending upon income and expenses, size of family and other circumstances that may affect your repayment ability. Generally, the first payment is not due until five months after the date of the loan.  
Q. I had to remove debris from my property after the disaster. Can this expense be included in my loan application?
A. Yes, but your own labor and that of family members cannot be included. Amounts paid to others and any equipment rental can be listed as part of repairs to real estate. Remember that the maximum loan limit on real estate damage is $200,000, and debris removal is 
included in the limit. 
Q. May people over the age of 65 apply for help from the SBA? 
A. Yes. Loans are made without regard to age. 
Q. I've heard that SBA loan applications are complicated and hard to complete. Is this true?
A. No. The application form asks you the same information that any bank would request before lending you money. If you need help, SBA disaster personnel are available to explain the forms and give you assistance at no charge. You may use the services of accountants or attorneys if you 
wish, but be sure they are reliable and that their fees are reasonable. If you choose to use an attorney or an accountant, you must report those fees on your SBA loan application form.  
Q. Are damages to cars and mobile homes eligible?
A. Generally, yes. The loan would be only for uninsured losses.  
Q. Do I need flood insurance to get a loan?
 A. If you are in a special flood hazard area, you must have flood insurance before we can disburse a loan. The amount of insurance required is the insurable value of the property in the special flood hazard area but not to exceed the maximum flood insurance available under the National Flood Insurance Act.