Questions Regarding NYC CBDG and SBA Loans....

We have received several questions from neighbors regarding the NYC Community Block Development Grant program (CBDG) and the Small Business Administration (SBA).

All of the information posted at this site regarding these issues are based solely on the verbal presentation provided by Mr. Brad Gair, the Director of N.Y.C. Housing Recovery Operations (HRO), at last Thursday's Civic Association meeting.  Mr. Gair did not provide any written materials in this regard for distribution to those in attendance.

Thus, our responses to the following question are based on our understanding of Mr. Gair's information verbally provided at that meeting.  We are certainly not offering ourselves as "experts" in this complex and convoluted governmental process and one of the reasons we are posting this information here is to allow a discussion of these issues and in those cases, where our understanding of the facts may be wrong,  to provide a corrected response immediately.

Neighbor's Question:

"I thought you could still qualify for the grant even though you received an SBA loan providing the monies you received through your flood insurance, FEMA, and the SBA loan still fell short of the expense of repairing your structure?"

Response:

Prior to last Thursday's Civic Association that was my impression also, however, after listening to Mr. Gaird's overview of the CBDG-DR program, I came away with the distinct impression that if you applied for and received (or were offered but declined) an SBA loan, you were then ineligible  for the grant monies.

At one point in the presentation Mr. Gaird even stated that, even if this restriction was lifted, the Small Business Administration would retain a "right of first refusal" regarding additional monies for an individual homeowner.

What this means is that if you received an SBA loan and were then eligible for inclusion in the CBDG-DR grant program, the SBA could review your application and possibly make a determination that regarding your financial situation and force you to take an additional (or increased) loan instead of being allocated the grant funds.  

Neighbor's Question:

"People who received a payment from FEMA after Hurricane Irene who failed to get flood insurance as stipulated in their agreement upon receiving FEMA assistance are precluded from receiving FEMA assistance for Hurricane Sandy. Does that preclusion also extend to these grants?"

Response:

Individuals who received FEMA financial assistance after Irene were obligated to obtain flood insurance in an amount equal to but not less than that of the financial aid they received from FEMA.  

 Thus, if you received $10,000 in FEMA finacial aid, you were obligated to obtain flood insurance for at least that amount ($10,000) in order to retain eligibility for future FEMA assistance. 

Because the funding for the NYC CDGB-DR grant program is federally based, a failure to obtain the required flood insurance after Irene related FEMA aid  would not only preclude additional FEMA assistance for SANDY but, more than likely, for involvement in the federally funded NYC CDGB-DR grant program as well.

Dan Mundy Sr., speaking "outside of the box",  spoke to this issue at last Thursday's Civic meeting by suggesting that perhaps the NYC CDGB-DR grant program could be revised to allow for a CDGB-DR grant that would be "reduced" by the total amount of the required flood insurance.  

In other words, if CDGB determined that you were eligible for a $35,000 grant, the grant would be reduced by $10,000 to reflect the flood insurance that you did not obtain and your total grant would then be $25,000.


Neighbor's Question:

"I still have financial issues relating to Hurricane Irene will this grant program recognize me for some assistance?"

Response:

To the best of our understanding, the federal assistance funds allocated to New York City by Congress under the Disaster Relief Appropriation Act of 2013 (Public Law 113-2 dated January 29, 2013) is to be used to assist victims of Hurricane Irene, Sandy as well as any other natural disaster occurring between now and 2014.