Gov. Edwards’ on recent announcement regarding fix to SBA loan duplication of benefits issue

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BATON ROUGE (Office of Gov.)— Today, Gov. John Bel Edwards released a statement on the recent announcement regarding the federal Duplication of Benefits (DOB) penalty that has previously kept homeowners who applied for Small Business Administration (SBA) loans following the 2016 floods from receiving full assistance through the Restore Louisiana Homeowner Assistance Program:

“I am pleased to hear that we expect the U.S. Department of Housing and Urban Development (HUD) to finally provide updated guidance stating that SBA loans will no longer be considered a DOB for federal grant funds. This is a momentous announcement for thousands of Restore Louisiana applicants who have been waiting since the aftermath of the 2016 floods for a fix to the previous federal policy. I must caution that this is still not official but as soon as we receive this guidance from HUD, we will provide homeowners access to the grant funds they deserve.

Upon receiving the official guidance from HUD, Restore Louisiana will immediately begin the process of updating grant awards, contacting homeowners and distributing funds in accordance with this new guidance.

Over the past two years, I have worked closely with our congressional delegation to fight for this change which has been the single biggest issue preventing homeowners from getting full assistance through Restore. Within an hour of Pres. Donald Trump signing legislation into law to address this issue, I submitted a waiver request as prescribed in the law. Since then, my administration has continued advocating on behalf of homeowners for official HUD guidance that would provide the full fix we have all been hoping for and working toward.

I want to sincerely thank Pres. Trump, his administration, and our congressional delegation for their partnership and hard-fought efforts to enable the release of these funds and bring about real, positive results for homeowners working to recover from the 2016 floods.” 

Background:
Under previous federal regulations before HUD issued this new guidance, flood survivors who applied for SBA loans immediately following the March and August 2016 floods were not able to fully access grant funding available through the Program. In the immediate aftermath of the floods, FEMA insisted that survivors apply for SBA loans without fully disclosing that homeowners could be penalized later. For example, a homeowner who was approved for a $90,000 SBA disaster loan, but perhaps only borrowed $30,000 immediately following the disaster, was penalized in the grant program for the full approved amount of the loan as this was considered a Duplication of Benefits. This was also the case if a homeowner borrowed $0. That homeowner was still penalized for the full $90,000. 

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