The Small Business Administration is urging residents who experienced flood damage to keep their options open by applying for federal loan assistance before the deadline on Aug. 23.
Mark Randle, public information officer with SBA in Minot, said it is important for residents to apply so they have access to loan money should they ever want the assistance.
"The key is to keep their options open," Randle said. "We don't want somebody to say, 'We wish we would have...'"
Applications nationwide are processed in the order received so the sooner residents respond, the quicker they may see a response.
There is no cost to apply. People can apply online at (disasterloan.sba.gov/ela). However, if they stop by the Disaster Recovery Center in Minot Municipal Auditorium Monday through Saturday between 9 a.m. and 7 p.m., they can receive assistance to make the process go more smoothly and quickly, Randle said.
Residents will be asked about income, mortgage, debts and assets. It isn't necessary to have exact figures in hand. Estimates often are acceptable. The line item on repair costs can be filled in with a question mark.
National budget woes won't deter flood relief
The national government's budget troubles shouldn't stand in the way of providing flood relief, according to information from federal disaster response agencies.
The government reached its borrowing limit May 16, and failure to raise the debt ceiling could force the country into default. Estimates from the bipartisan Policy Center indicate the government would not be able to pay nearly half of its $80 million in monthly payments.
FEMA reports that disaster services aren't at risk because of the $1.3 billion in the Disaster Relief Fund, from which emergency response efforts and disaster assistance are paid. Disaster relief also is a joint effort of FEMA and other public and private agencies that can bring additional resources to bear.
The U.S. Small Business Administration, which provides disaster loans, is counting on a resolution in Washington, D.C., before Aug. 2.
"Both the president and congressional leaders have said there is no alternative to not raising the debt limit. With that in mind, the SBA will stay on the ground in Minot, and the 34 other field office locations in the 11 states where we have staff working to support the long-term recovery efforts of local residents and business owners," said Carol Chastang, spokeswoman for the SBA.
Mark Randle, public information officer with SBA in Minot, added that there's not been a time when Congress has not funded loans that it has made. The SBA has approved $11.3 million in low-interest loans in North Dakota's disaster-impacted areas this year.
As of Saturday, FEMA had received 8,593 registrations and completed 2,414 site inspections in North Dakota's eight eligible counties and Spirit Lake Nation. Minot's Disaster Recovery Center had logged 5,951 visits.
Applicants receive letters that explain the steps in the process, but this particular disaster is being handled somewhat differently from the generic outline in the letters, Randle said. One difference is that residents will need to contact the SBA to request an inspection as soon as they are back in their homes, he said. After the inspection, applicants will be notified by letter of their eligibility for loans and the loan limits.
"The best thing is to apply for a loan and get the loan document," Randle said. "Then they know what the specifics are about their loan. Then they can use that in their planning."
Only by going through the SBA process and being found ineligible for a loan can people become eligible for additional assistance through FEMA.
If eligible for an SBA loan, borrowers can use the money to cover home or business reconstruction, relocation, flood mitigation or expenses that any insurance doesn't cover. SBA will work with residents on refinancing a mortgage. Residents who can't rebuild can get up to 30-year mortgage assistance to acquire a different home.
SBA also offers working capital loans to small businesses and most private, nonprofit organizations. The North Dakota Small Business Development Centers offer services to companies looking for guidance on flood recovery.
If a borrower feels the approved loan limit is too low, the borrower can have the limit reconsidered by offering documentation of need. The maximum loan amount is $200,000 for a primary residence, $40,000 for homeowners and renters for personal property and $2 million for businesses suffering property or economic damages.
The interest rate can be as low as 2.56 percent for a homeowner, 3 percent for a nonprofit or 4 percent for a business. A higher rate kicks in if a borrower can obtain credit elsewhere, but Randle explained that this doesn't mean that those who are credit-worthy get a higher rate. The higher rate only applies if borrowers have sufficient resources to recover without a government loan, such as might be the case when damage is minimal, he said. About 80 percent of applicants are getting approved for the lowest rate.
People shouldn't make their own determination of eligibility and disqualify themselves before they ever apply, Randle said.
Once approved for a loan, applicants have 60 days to sign the loan document, unless they request an extension. Randle encourages people to go over the paperwork with an SBA representative so they fully understand the loan documents. They should consider signing even if they aren't sure if or when they will need the money, he said. After signing, they will have at least a year or as long as needed before they must decide whether to draw on the loan.
There is no obligation to draw on the loan, and no interest accrues until loan money is disbursed. Money is disbursed within a few days of a borrower's request to access the loan, Randle said. The SBA only disburses money gradually to cover needs as they arise. Borrowers will need to file receipts and other documents to verify proper use of the loan money. There is no penalty for paying off any portion of the loan early.