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Monday, November 5, 2012

Low-Interest Government Loans to Help With Storm Home Damage

Homes in Bayhead, N.J., after Hurricane Sandy.ReutersHomes in Bay Head, N.J., after Hurricane Sandy.

Even if you don't own a business, you may be eligible for a disaster loan from the federal Small Business Administration to help repair damage to your home from Hurricane Sandy.

Odd as it may sound, the S.B.A. administers low-interest loans to homeowners (as well as to businesses and non-profits) in disaster areas. The loans are meant to finance repairs not covered by insurance. Loans of up to $200,000 are available to replace or repair your main home. And both homeowners and renters may be eligible for loans of up to $40,000 for damage or destroyed personal property.

The property must be located in declared disaster county. Vacat ion properties or second homes aren't eligible (but qualified rental properties may be eligible for business-assistance loans).

Interest rates on the loans are as low as 1.688 percent, and the payback period can be as long as 30 years, depending on the borrower's ability to repay, said Jose Vejarano, a spokesman for the S.B.A. Applicants undergo a credit check, and collateral may be required. “We look at the overall picture of each applicant's financial condition,” he said.

Funds received from insurance claims are generally deducted from the loan total, or are used to help repay the disaster loan. But storm victims shouldn't wait for insurance settlements to apply, he said.

Applications can be made in person at a FEMA disaster office, or they can be made online; the Web application process has been revamped to be easier to use, he said.

Applicants must first register with FEMA You can do so online, or by calling FEMA's toll-free Helpline at 800-621-3362.

Tips for applying are available at the S.B.A.'s Web Site. Web site. The agency also provides a list of frequently asked questions.

The deadline for applications is Dec. 31, according to the S.B.A. Web site. After the application is received, a representative of the S.B.A. will inspect the property. The agency aims to process applications within two weeks.