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So if you got SBA loan for flood recovery, you are screwed?
Posted on 4/9/17 at 11:53 am
Posted on 4/9/17 at 11:53 am
Saw this in the Advocate today:
LINK
So suppose you were flooded back in August and lost everything. You can either get an SBA loan and start rebuilding immediately OR wait until Congress gets its thumb out nine months later, get the grant, and then rebuild.
But you can't get the grant to repay the SBA loan. The federal government is not out of money twice.
quote:
Despite Gov. John Bel Edwards' desire and his requests to Congress, his administration is saying federal policy won't allow what Coston and many other SBA loan recipients have asked of the state: to provide them with grants to at least partially repay loans.
It's considered a duplication of benefits. The policy is intended to prevent people from collecting more money through insurance payments, the federal government's post-disaster aid and other sources than their damage requires.
LINK
So suppose you were flooded back in August and lost everything. You can either get an SBA loan and start rebuilding immediately OR wait until Congress gets its thumb out nine months later, get the grant, and then rebuild.
But you can't get the grant to repay the SBA loan. The federal government is not out of money twice.
3
Posted on 4/9/17 at 11:56 am to prplhze2000
quote:
The federal government is not out of money twice.
I laughed very hard after reading that.
Posted on 4/9/17 at 11:56 am to CajunSoldier225
it was meant as a joke. ;-)
Posted on 4/9/17 at 12:00 pm to prplhze2000
Just being devils advocate, I would think majority of people that were able to take out an SBA loan most likely took some responsibility for not having the proper amount of flood coverage, didn't want to be out of their house for a better part of a year before starting the rebuild, and took the loan not expecting anyone else to pick up the tab. Am I wrong? I don't think I'd ever sign for a loan without being fully prepared to honor it.
Posted on 4/9/17 at 12:23 pm to SuperSaint
Yes, prepared to honor it. But why do some get FEMA aid and others get a loan to repay I think is the question.
Posted on 4/9/17 at 12:27 pm to jwall3
quote:I have no dog in this fight, but I would think the individuals lucky enough to be able to secure an SBA loan and be able to get their house in order 10 months before waiting on anyone else, don't have near the need for a grant handout from the tax payers.
But why do some get FEMA aid and others get a loan to repay I think is the question.
I would think most people wouldn't trade spots with someone without those means.
Posted on 4/9/17 at 12:55 pm to prplhze2000
Yup, you got it right. Same thing happened with Road Home. Can't duplicate benefits.
The idea is that a disaster shouldn't destroy your life. So, if you can borrow money to pay it back, you should. Only those who have exhausted insurance and loan capacity should get grants.
The problem is in the real world, it results in moral hazard. The middle class get loans, the poor get grants, so it seems like the middle class are being punished for being successful.
The best tact for the middle class, of course, is just get insurance, and then you don't have to worry about any of these things.
The idea is that a disaster shouldn't destroy your life. So, if you can borrow money to pay it back, you should. Only those who have exhausted insurance and loan capacity should get grants.
The problem is in the real world, it results in moral hazard. The middle class get loans, the poor get grants, so it seems like the middle class are being punished for being successful.
The best tact for the middle class, of course, is just get insurance, and then you don't have to worry about any of these things.
Posted on 4/9/17 at 1:15 pm to SuperSaint
quote:
I have no dog in this fight, but I would think the individuals lucky enough to be able to secure an SBA loan and be able to get their house in order 10 months before waiting on anyone else, don't have near the need for a grant handout from the tax payers.
While you're mostly right, the issue is the seemingly random nature of FEMA payouts. I'm talking four houses, right next to each other, same damage, vastly different amounts of money received.
Posted on 4/9/17 at 2:01 pm to elprez00
quote:
While you're mostly right, the issue is the seemingly random nature of FEMA payouts. I'm talking four houses, right next to each other, same damage, vastly different amounts of money received.
If all four had the same financial resources (insurance, savings, loan capacity, etc) then they would all get the same grant (or none at all).
Odds are, though, they have varying financial resources.
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