Community Disaster Loans (97.030)

Program

97.030 Community Disaster Loans

Federal Agency

Agency: Department of Homeland Security

Authorization

Robert T. Stafford Disaster Relief and Emergency Assistance Act, Section 417, 42 U.S.C 5184.

Program Number

97.030

Last Known 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. 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. 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 Assistance Administrator of the Disaster Assistance Directorate may approve a rate equal to the 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 Assistance 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 financial year of the disaster are insufficient to meet the operating budget because of disaster related revenue losses and un-reimbursed disaster related operating expenses.

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. OMB Circular No. A-87 applies to this program.

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. Environmental impact information is not required for this program. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official 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

OMB Circular No. A-102 applies to this program. OMB Circular No. A-110 applies to this program. 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

Contact the headquarters or regional office, as appropriate, for application deadlines.

Range of Approval/Disapproval Time

From 1 to 6 months. The loan must be approved in the fiscal year of the disaster or the financial year immediately following.

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

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula.
Matching requirements are not applicable to this program.
MOE requirements are not applicable to this program.

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. See the following for information on how assistance is awarded/released: Payment based on Project need.

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. Refer to program guidance. Refer to program guidance. Refer to program guidance. Refer to program guidance.

Audits

In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards 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 No. 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.

Program Accomplishments

Not Applicable.

Financial Information

Account Identification

70-0703-0-1-453.

Obligations

(Direct Loans) FY 08 $4,400,000; FY 09 est $32,000,000; FY 10 est not reported. - FY 2010 Budget Estimate: Not Available.

Range and Average of Financial Assistance

None.

Regulations, Guidelines and Literature

Federal Disaster Assistance Regulations, 44 CFR Part 206, Subpart K.

Related Programs

Not Applicable.

Information Contacts

Regional or Local Office

See Regional Agency Offices. See Appendix IV of the Catalog for a listing of addresses for FEMA's Regional Offices.

Headquarters Office

Department of Homeland Security 245 Murray Lane, Washington, District of Columbia 20528 Email: john.wilmot@dhs.gov Phone: (202) 447-4000

Web Site Address

http://www.dhs.gov.

Examples of Funded Projects

Not Applicable.

Criteria for Selecting Proposals

Not Applicable.