DENVER – The US Small Business Administration announcement this week it had doubled the local multiplier used to calculate how much money people who applied for a disaster loan after the Marshall fire could receive.
Francisco Sánchez, Jr., who works in the SBA’s Office of Disaster Assistance, said the change comes after the SBA further assessed construction costs in Boulder County — one of factors that the SBA uses to determine the amount of loan assistance to give recipients.
“By adjusting our loan calculations to meet local reconstruction costs and increase loan eligibility, we hope to ensure that disaster-affected residents receive the financial assistance and appropriate resources they need,” said the lender. SBA Administrator Isabella Casillas Guzman.
American senses Michael Bennet and John Hickenlooper of Colorado, as well as Representative Joe Neguse, congressman from the region, welcomed the administration’s decision on Tuesday. At the beginning of March, they asked the SBA increase both loan amounts and raise limits on maximum loan amounts under the SBA’s Disaster Loan Assistance Home and Personal Loan Program.
In the letter of March 10, the group of lawmakers said the SBA at the time projected only a 3% increase in local housing costs over the national average and that the SBA could potentially severely underestimate the cost to victims of the December 30 forest fire to rebuild their homes.
They said local estimates put construction costs between $295 and $335 per square foot, while the national average was between $100 and $200 per square foot.
The lawmakers also said some of their constituents who were going through the SBA process had experienced “inconsistent communications regarding loan decisions” and asked the SBA to better clarify their decisions — especially for denials.
The SBA did not increase the maximum loan amount – $200,000 for reconstruction and $40,000 for personal effects – however, which lawmakers had requested. These lending thresholds were set in 1994.
Lawmakers had claimed that, adjusting for inflation, $200,000 in 1994 dollars would rise to more than $350,000 today and noted that the median price of a single-family home in the mid-1990s 1990 had since increased by more than 300%.
The group of three said on Tuesday they were happy with the increase in the multiplier but continued to push for higher borrowing limits.
“Initial damage estimates did not accurately reflect the true costs of reconstruction, nor did they take into account the duration of these efforts,” Neguse said. “We will continue to press for appropriate support from all Coloradans impacted by this unprecedented disaster until all of our communities can fully recover.”
SBA disaster loans can be used for losses not covered by insurance or the Federal Emergency Management Agency. According to the statepeople sent in 2,315 SBA applications in total.
So far, 526 home loans worth $81.4 million have been approved, along with 30 business loans worth about $5.5 million.
The SBA announcement also came the same day the private property debris removal program was launched in Boulder County.