House Approves Reallocation of FEMA Funds to SBA Disaster Loan Program
Hurricane Recovery
Memo to Members: Vol 11, No. 7, February 17, 2006
On February 15, the House passed H.R. 4745, reallocating $721 million in previously appropriated Federal Emergency Management Agency (FEMA) funds to the Small Business Administration’s (SBA) disaster loan program. House Appropriations Committee Chair Representative Jerry Lewis (R-CA) introduced the bill on February 14.
The SBA last received supplemental funding in December, when the FY06 Department of Defense appropriations bill (P.L. 109-148) included a $29 billion hurricane relief package (see Memo, 12/23), and included $441 million for the SBA disaster loan program. According to testimony given by Herbert Mitchell, Associate Administrator for SBA Office of Disaster Assistance, on February 15 before the Senate Banking, Housing and Urban Affairs Committee (see related article), the SBA has so far received 375,000 loan applications. He expects the number to increase above 400,000 before the March 1 application deadline. This is twice the number of combined applications received after four hurricanes in 2004.
Mr. Mitchell said that 90% of the loan applications received are from homeowners. The remaining applications are from businesses. Of the 375,000 applications received, approximately 57,000 loans, at a combined total of $4.3 billion, have been approved. Mr. Mitchell said that 75% of denied applications were due to poor credit scores.
H.R. 4745 has been sent to the Senate.
