The Long Beach City Council is calling on the Department of Housing and Urban Development (HUD) to waive a policy that would negatively affect Sandy victims who rejected Small Business Administration (SBA) loans in the aftermath of the storm because they could not afford to take on more debt.
Community Development Block Grant (CDBG) funding, which comes in the form of a grant, not a loan, is intended to supplement other forms of available aid and cover only “unmet need.”
In determining that amount, HUD regulations provide that any SBA loans for which a homeowner is approved are counted against the amount of unmet need, even if the loan was not accepted by the homeowner.
These regulations do not take into account individual circumstances of cash-strapped homeowners who are in no position to take on more debt.
“Putting Sandy victims in a no-win situation by making them choose between losing access to the resources they need to rebuild their lives by taking on an unsustainable debt load is totally wrong and must be changed,” said City Council President Scott J. Mandel. “This is a grossly unfair policy and we will continue to fight to ensure Long Beach homeowners get the maximum amount of aid they rightfully deserve.”
“This information should have been disclosed when people applied for, or turned down, their loans,” said City Council Vice President Fran Adelson. “It’s a little late for people to be getting this information as many have turned down the loans, thinking they would be made whole by these grants. This comes as an unwelcomed and disappointing surprise.”
(Information included in this article was provided by the City of Long Beach.)
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