Grimm news: Sandy victims falling deep into debt
The economy isn’t getting any better for victims of Superstorm Sandy, who now find themselves digging out of a deep financial hole.
And it’s the government that helped push them into financial hot water, US Rep. Michael Grimm (R-C-Bay Ridge-Dyker Heights-Staten Island) said.
Grimm sent a letter to the Small Business Administration (SBA), asking that disaster recovery loans previously awarded to Sandy victims be forgiven for those victims who would have otherwise been eligible for Community Development Block Grant (CDBG) grants distributed through New York City’s “Build it Back” program.
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.
“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,” Grimm said.
“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,” he said.
Until the “Build it Back” program was introduced, an SBA loan was the only real source of funding for rebuilding, Grimm said.
Up until last week, those who were approved for a loan, but turned it down, were also ineligible for CDBG grants. After a push from Grimm and the New York congressional delegation, the US Department of Housing and Urban Development issued a ruling allowing these residents to receive the CDBG funding.
The SBA reported that as of July 19, a total of 43,199 loan applications from New York City residents hit by Sandy had been received. Of those, 20,700 were approved, totaling $1,271,324,600 in funding distributed.
In Brooklyn, the most hard hit communities included Coney Island, Seagate, and Gerritsen Beach.
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