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Miami Republican Rep. Maria Elvira Salazar introduced a bipartisan bill to double the limits on Small Business Administration loans that are doled out to homeowners after major storms.
Salazar authored the Rebuilding Communities After Disasters Act and introduced it on Tuesday, as Florida prepares for the possibility of Hurricane Elsa making landfall in the state. The bill has 35 co-sponsors from both parties, including Miami Republican Rep. Carlos Gimenez, Treasure Coast Republican Rep. Brian Mast, and St. Petersburg Democratic Rep. Charlie Crist.
The bill increases the maximum loan amount a homeowner can apply for through the Small Business Administration from $200,000 to $400,000 for home repairs, and from $40,000 to $75,000 to replace household and personal belongings.
Salazar’s office said the current limits have been in place since 1994, and the increase better reflects current home prices and damage needs after major storms.
“We are in the midst of hurricane season, and in South Florida, we know all too well how these storms can absolutely devastate our homes,” Salazar said in a statement. “We must do everything possible so that our coastal communities have access to all the resources provided by the SBA to safely rebuild their homes in the event of a disaster. The Disaster Assistance Loans must be modernized to reflect the rising costs of homes across our communities.”
SBA Disaster Assistance Loans are open to everyone in a declared disaster area, not just small business owners. SBA loans are designed to supplement other forms of assistance, such as FEMA aid or flood insurance, and are intended to help make homeowners whole after other forms of relief and credit are exhausted.
The disaster loans, which are capped at a 4% interest rate, cannot be used for vacation properties or second homes or for home additions. It’s possible for a homeowner to get up to a 20% increase on current loan amounts to pay for improvements that prevent the risk of property loss in a future disaster, such as hurricane-resistant windows or a sump pump.
Salazar’s office said 80% of the SBA’s Office of Disaster assistance loans are doled out to individuals and households, instead of businesses, to help them recover from disasters.
In Florida, the SBA provided over $300 million in disaster assistance loans after Hurricane Irma caused damage throughout the state in 2017.