Rep. Grimm Calls on SBA to Forgive Disaster Loans to Sandy Victims

Jul 22, 2013 Issues: Superstorm Sandy

STATEN ISLAND, NY - Today, Rep. Michael Grimm (R,C-SI/Brooklyn) sent a letter to the Small Business Administration (SBA) asking that disaster recovery loans awarded to Sandy victims be forgiven, for those who would have otherwise been eligible for Community Development Block Grant (CDBG) grants distributed through NYC’s ‘Build it Back’ Program.

“After Sandy hit, victims were told to apply for SBA loans. Seniors had to choose between draining their retirement or taking on more debt; and working families on whether to dip into their child’s college fund.  For some, taking the loan seemed like the only option at the time. Now as other victims are lining up for CDBG recovery grants, those who took the loans are falling into debt.  It’s simply not fair to punish those who played by the rules. That is why I am calling on SBA to level the playing field and forgive the loans for those eligible for ‘Build it Back’ recovery grants,” said Rep. Grimm.

“Finally, there appears to be a clear message to Sandy victims who have been again victimized by the financial restraints placed on them by the government programs made available to assist them.  Congressman Grimm recognizes that the only recourse is to give financial relief from the SBA loans, which, until the Built It Back Program was introduced, was the only real source of funding for rebuilding.  I believe we should give full support to Congressman Grimm's proposal so that we start to make meaningful strides toward rebuilding the Staten Island community. I will be circulating petitions to our community to gather support for the Congressman in this effort,” said Derek Tabacco, Guyon Rescue Group.

Under federal guidelines, a duplication of benefits is prohibited, meaning that those eligible for CDBG recovery grants many not receive them if they have also received an SBA loan. Up until last week, those who were approved for a loan, but turned it down, were also ineligible for CDBG grants. After a hard push from Rep. Grimm and the NYC Congressional delegation, HUD issued guidance last week allowing them to receive the loan. 

Those who accepted the SBA loans still remain at a disadvantage in regards to taking on debt.  Rep. Grimm is calling on SBA to forgive the loans in order to provide relief to this group and level the playing field for all homeowners impacted by Superstorm Sandy.

As of July 19, 2013, SBA reports that in Richmond County: 4,582 home loan applications were received and 2,395 were approved, totaling $140,364,900.  In NYC: 43,199 were received and 20,700 were approved, totaling $1,271,324,600. The SBA does not have data on loans approved, but declined by the homeowner.


A copy of Rep. Grimm’s letter to the Small Business Administration is as follows and attached:

July 22, 2013

The Honorable Karen Mills
U.S. Small Business Administration
409 3rd St, SW
Washington DC 20416

Dear Administrator Mills:

My purpose in writing is to urge debt forgiveness for victims of Superstorm Sandy who accepted SBA disaster loans, but would have otherwise been eligible for Community Development Block Grant (CDBG) recovery grant funds.

As you certainly know, Superstorm Sandy had a devastating impact on many living in the affected areas, knocking them out of their homes for many months and creating massive, unexpected financial needs that have yet to be resolved.  For months after the storm, residents who went to FEMA for assistance were referred to the SBA to address needs that could not be met by FEMA’s individual assistance program.

Some who were offered SBA disaster loans declined them owing to concerns about taking on additional debt during a time of great financial distress. A recent decision by the Department of Housing and Urban Development (HUD) ensures these individuals are now eligible for assistance under New York City’s “Build it Back” program, which administers CDBG funding provided by HUD. This is a critical development which, if implemented properly, will enable thousands of victims of Superstorm Sandy to receive additional assistance without taking on additional debt load.

It is critical, however, that we not overlook individuals who qualified for and accepted SBA loans because they felt they had no other options in their quest to recover. Current policies have created a circumstance in which individuals who acted precisely as the government suggested – use SBA loans to cover unmet disaster-related needs – are the ones who being punished with additional debt. This policy must be corrected. I strongly urge the Administration to remove this burden off the backs of Sandy victims who are already carrying so much by forgiving all disaster loans issued pursuant to Superstorm Sandy, for those who would otherwise be eligible for CDBG funds. Your prompt attention to this matter is greatly appreciated.


Michael Grimm
Member of Congress