DENVER – The U.S. Small Business Administration announced this week it had doubled the local multiplier used to calculate how much money people who applied for disaster loan assistance after the Marshall Fire might receive.
Francisco Sánchez, Jr., who works in the SBA Office of Disaster Assistance, said the change comes after the SBA further evaluated building costs in Boulder County – one of the factors the SBA uses in determining how much loan help to give to recipients.
“By adjusting our lending calculations to meet local rebuilding costs and increase loan eligibility, we hope to ensure disaster-impacted residents are getting the appropriate financial assistance and resources they need,” said SBA Administrator Isabella Casillas Guzman.
Colorado’s U.S. Sens. Michael Bennet and John Hickenlooper, as well as Rep. Joe Neguse, the congressman for the area, praised the move by the administration Tuesday. In early March, they had asked the SBA to increase both the loan amounts and to raise the limits on the maximum loan amounts under the SBA’s Disaster Loan Assistance Home and Personal Property Loans Program.
In the March 10 letter, the group of lawmakers said the SBA was projecting at the time only a 3% increase in local housing costs over the national average and that the SBA could potentially be severely underestimate the cost for victims of the Dec. 30 wildfire to rebuild their homes.
They said local estimates were quoting construction costs between $295-$335 per square foot, compared to the national average being between $100-$200 per square foot.
The lawmakers also said some of their constituents going through the SBA process have 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 amounts -- $200,000 for rebuilding and $40,000 for personal effects – however, which is something the lawmakers had asked for. Those loan thresholds were set in 1994.
The lawmakers had claimed that adjusted for inflation, the $200,000 in 1994 dollars would amount to more than $350,000 today and noted how the median price of a single-family home in the mid-1990s had since increased by more than 300%.
The group of three said Tuesday they were pleased with the increase in the multiplier but continued to push for increased borrowing limits.
“The initial estimates of the damage caused did not accurately reflect the actual costs of rebuilding nor did they take into account the length of time such efforts will take,” Neguse said. “We will keep pushing for proper support of 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 state, people sent in 2,315 SBA applications overall.
So far, 526 home loans worth $81.4 million have been approved, along with 30 business loans worth approximately $5.5 million.
The announcement from SBA also came on the same day that the private property debris removal program got underway in Boulder County.