SBA loans cover only uninsured physical damage. If a clients’ property was insured and they are required to apply insurance proceeds to an outstanding mortgage on the damaged property, the client can include the amount applied in the disaster loan application.
The client should carefully document how proceeds are spent in case of audit.
Mitigation Improvements If a loan application is approved, clients may be eligible for additional funds to
cover the cost of improvements that will protect property against future damage. Examples of improvements include retaining walls, seawalls, sump pumps, etc. Mitigation loan money is in addition to the amount of the approved loan, but may not exceed 20% of total amount of disaster damage to real estate and/or leasehold improvements, as verified by SBA, to a maximum of $200,000 for home loans. It is not necessary for the description of improvements and cost estimates to be submitted with the application. SBA approval of the mitigating measures will be required before any loan increase.
Relocation Clients may use their SBA disaster loan to relocate. The amount of the relocation
loan depends on whether you relocate voluntarily or involuntarily. If a client is interested in relocation, an SBA representative can provide more details on specific situations.
Refinancing with an SBA Loan SBA can refinance all or part of prior mortgages that are 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.
Homeowners may be eligible for the refinancing of existing liens or mortgages on
homes, in some cases up to the amount of the loan for real estate repair or replacement. How to Appeal an SBA Loan Decision SBA Appeals go to the Office of Hearings and Appeals:
http://www.sba.gov/oha.
1. What must be included in an appeal petition? An appeal petition should argue why the SBA’s decision is incorrect and should
include any evidence that supports your argument. Note that any document already submitted to the program or Area Office does not need to be re-submitted on appeal. Use the SBA’s regulations governing the client’s type of appeal (see the FAQs for that type of appeal) and OHA’s past decisions to help formulate the legal argument. Cite particular
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