Today, Gov. John Bel Edwards released the following statement on the U.S. Senate’s potential resolution to the SBA loan duplication of benefits issue for homeowners hit by the 2016 floods:
“News that we are one step closer to providing relief to thousands of homeowners who are still rebuilding their lives after the damage caused by the 2016 floods is something we’ve been working on and waiting to hear for quite some time, ”said Gov. Edwards. “Thousands of hardworking families and individuals have been prevented from receiving assistance we feel they deserve from the Restore Homeowner Assistance Program because the federal government requires the Restore program to consider a loan from the Small Business Administration the same as a grant, therefore calling it a duplication. That has never been something I nor the members of our Congressional Delegation have agreed with and in fact, have been working for nearly two years to correct. I want to thank our delegation for their tireless work on this issue but especially Rep. Garret Graves, Rep. Cedric Richmond and Sen. Bill Cassidy. There is still work to be done, and we will continue working together to ensure our people get the help they need and deserve.”
Currently, flood survivors who applied for Small Business Administration loans immediately following the floods are not able to make full use of grant funding available through the RESTORE Louisiana Homeowner Assistance Program. The Federal Emergency Management Agency (FEMA), in the immediate aftermath of a disaster, insists that survivors apply for a SBA loan without fully disclosing that they could be penalized down the road. For example, a homeowner who was approved for a $90,000 SBA disaster loan, but perhaps only borrowed $30,000 immediately following the disaster, would be penalized in the grant program for the full approved amount of the loan. The federal government labels this scenario as a Duplication of Benefits (DOB). This is also the case if a homeowner borrowed $0. That homeowner is still penalized for the full $90,000.