Governor Edwards seeks disaster loan change in Harvey bill
BATON ROUGE- Gov. John Bel Edwards is asking Congress to tweak federal law governing disaster loans as part of the Hurricane Harvey aid legislation being rushed to passage.
The governor sent a letter Wednesday to U.S. House and Senate leaders seeking an adjustment to language governing Small Business Administration disaster loans that Edwards says harmed victims of Louisiana's 2016 flooding and can harm Harvey survivors.
Under federal rules, those who were approved for SBA loans, whether they used the loans or not, can't receive additional federal aid such as through the state's federally financed homeowner grant program if it is deemed a "duplication of benefits."
Edwards says flood victims were encouraged to apply for the disaster loans at FEMA's urging and didn't realize it could harm their ability to receive grant aid.
Billie Jo Seguin applied for an SBA loan and qualified. She was approved for about $83,000.
"FEMA said you have to go apply for an SBA loan," said Seguin. "I took 60,000. I was approved for more, I didn't take it all."
She took out another mortgage on her house and she used the money to repair the damage created by the August 2016 flood. Each month, she makes payments on that SBA loan.
"You know, I had no choice," she said.
It all happened long before the Restore LA Program, which Seguin applied for in the spring. She found out soon after she wouldn't be getting the reimbursement from Restore she hoped for because of that SBA loan.
"Even SBA loans, which have to be paid back are considered that same duplication of benefits just as if they were a grant," said Pat Forbes of the Louisiana Office of Community Development.
Flood victims, like Seguin, are being penalized for doing something they were told they "had to do." Since Seguin qualified for a nearly $83,000 SBA loan, that full amount will count against her. The only way Restore LA could help, is if damages to her house are over that $83,000 amount plus any other assistance she received from FEMA.
"I'm not counting on anything more than $2500," she said.
Forbes says the number one comment people say about this around Louisiana is how heartbreaking it is.
"We know that it is a total breach of fairness and we would like to see it fixed and the Governor has made that clear for months and months now," said Forbes.
Restore LA says it's important to note there are homeowners who have received SBA loans and who have also received grant awards through the program. Having an SBA loan does not disqualify anyone from participating in the program.