Today, Governor Edwards sent a letter to congress asking for them to consider changing the Duplication of Benefits (DOB) law that is harming rebuilders.
He mentions in the letter sent to Speaker Paul Ryan, Leader Chuck Schumer, Leader Mitch McConnell and Leader Nancy Pelosi that homeowners affected by the 2016 floods and now Hurricane Harvey are placed in a difficult position at the outset of the rebuilding process.
"Immediately following a disaster, SBA loans are often the only source of funds readily available to survivors," Edwards writes. "In fact, FEMA insists that all individuals seeking Individual Assistance (IA) first apply for a SBA loan."
If you have been affected by this, then you know exactly what he is talking about. If not, basically the SBA awards the loan, up to $90,000. But this has to be repaid by the homeowner. In some instances, the homeowner may decide to take $30,000 or less from the SBA loan but are still penalized for the full $90,000.
When the Community Block Development Grant (CBDG) funds are awarded, (in the case of the 2016 floods over a year later), they are considered a Duplication of Benefit and do not go to the homeowner that took the SBA loan to begin rebuilding as soon as possible.
"For example, a homeowner who was eligible 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 amount of the loan," Edwards writes.
This issue needs to be addressed in Congress, especially with the massive rebuilding process underway following Harvey. People are just getting back into their homes here in Louisiana. Those who are proactive to rebuild, in some cases, at least need better guidance if the process is not going to change.
"As you consider legislation to fund the federal government and disaster assistance, I would request that you include language that clarifies the DOB provision of the Stafford Act so that victims of a disaster will not be penalized for making use of SBA disaster loans," Edwards writes.