Program Descriptions
Program Number
97.030
Title
Community Disaster Loans
Federal Agency
DEPARTMENT OF HOMELAND SECURITY
Authorization
Robert T. Stafford Disaster Relief and Emergency Assistance Act, Section 417, 42 U.S.C. 5184.
Status
Active
Objectives
To provide loans subject to Congressional loan authority, to any local government that has suffered substantial loss of revenues in an area in which the President designates a major disaster exists. The funds can only be used to maintain existing functions of a municipal operating character and the local government must demonstrate a need for financial assistance.
Types of Assistance
Direct Loans.
Uses and Use Restrictions
Loans are made only to local governments or other political subdivisions of the State, and are based on need. The funds cannot be used to meet the non federal share of any Federal program, finance capital improvements, or repair or restore public facilities.
Eligibility Requirements
Applicant Eligibility
Applicants must be in a designated major disaster area and must demonstrate that they meet the specific conditions of FEMA Disaster Assistance Regulations 44 CFR Part 206, Subpart K, Community Disaster Loans. To be eligible the applicant must demonstrate: 1) a substantial loss of revenues as a result of a major disaster; 2) a need for financial assistance to perform its governmental functions.
Beneficiary Eligibility
Local governments in a designated disaster area.
Credentials/Documentation
The loan application is developed from financial information contained in the local government's published financial reports and current annual operating budget. Loan awards will be determined in accordance with OMB Circulars No. A-102 and No. A-87 for State and local governments. Awards made to Institutions of Higher Education, Hospitals and Other Non-Profit Organizations will be required to follow the requirements of OMB Circulars No. A-110 and No. A-21.
Application and Award Process
Preapplication Coordination
The State Governor makes a request for a Presidential declaration of a major disaster through the FEMA Regional Director. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or officials designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.
Application Procedure
Upon declaration of a major disaster, application for a Community Disaster Loan is made through the Governor's Authorized Representative to the Regional Director of FEMA in accordance with FEMA Disaster Assistance Regulations, 44 CFR 206.364. The Assistant Administrator of the Disaster Assistance Directorate approves or disapproves the loan. The Designated Loan Officer will execute a Promissory Note with the applicant. The promissory note must be co-signed by the State, or if the State cannot legally co-sign the note, the local government must pledge collateral security.
Award Procedure
Funds are disbursed to the local government when requested in accordance with the Schedule of Loan Increments in the Promissory Note. Funds awarded to Institutions of Education, Hospitals and Other Non-Profit Organizations will follow requirements of OMB Circulars No. A-110, No. A-21 and No. A-133.
Deadlines
The loan must be approved in the fiscal year of the disaster or the fiscal year immediately following.
Range of Approval/Disapproval Time
From 1 to 6 months.
Appeals
If a loan application is disapproved, in whole or in part, a revised application may be resubmitted by the local government within 60 days of the date of the disapproval.
Renewals
Assistance Considerations
Formula and Matching Requirements
The amount of the loan is based on the demonstrated need. The interest rate is the U.S. Treasury rate for 5-year maturities on the date the Promissory Note is executed adjusted to the nearest 1/8th. When applicable, if an applicant can demonstrate unusual circumstances involving financial hardship, the Assistant Administrator of the Disaster Assistance Directorate may approve a rate equal to the five 5-year maturity rate plus 1 per centum, adjusted to the nearest 1/8th, and further reduced by one-half. The term of the loan is usually 5 years, but may be extended. Interest accrues on the funds as they are disbursed. When applicable, the Assistant Administrator of the Disaster Assistance Directorate may cancel repayment of all or part of the loan if the revenues of the applicant in the 3 fiscal years following the fiscal year of the disaster are insufficient to meet the operating budget because of disaster related revenue losses and un-reimbursed disaster related operating expenses.
Length and Time Phasing of Assistance
The length of the loan is generally 5 years, but may be extended. Funds are disbursed per the Schedule of Payments in the Promissory Note.
Post Assistance Requirements
Reports
The applicant must demonstrate a financial need prior to any incremental disbursement by submitting a copy of its most recent financial report as well as data on anticipated and actual revenues. The applicant annually must submit copies of its annual financial reports.
Audits
In accordance with the provisions of OMB Circular A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards (or receive property, or a combination of both, within the fiscal year) will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular A-133. These audits are due to the cognizant Federal agency, submitted through the Federal Audit Clearinghouse, not later than 9 months after the end of the grantees fiscal year.
Records
Annual Operating Budgets including revenue and expense and balance sheets must be retained for the duration of the loan. Additional record requirements are detailed in the Federal Disaster Assistance Regulations, 44 CFR 206, Subpart K.
Financial Information
Account Identification
70-0703-0-1-453.
Obligations
(Loans) FY 07 est not available; FY 08 est $4,000,400; and FY 09 est not available.
Range and Average of Financial Assistance
None.
Program Accomplishments
None.
Regulations, Guidelines and Literature
Federal Disaster Assistance Regulations, 44 CFR Part 206, Subpart K.
Information Contacts
Regional or Local Office
See Appendix IV of the Catalog for a listing of addresses for FEMA's Regional Offices.
Headquarters Office
U.S. Department of Homeland Security 245 Murray Lane, Washington, DC 20528.
Web Site Address
http://www.dhs.gov
Related Programs
None.
Examples of Funded Projects
None.
Criteria for Selecting Proposals
None.
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