FEMA – Who, What, When, and How of Filing Claims, Part 2
The Federal Emergency Management Agency (FEMA) is responsible for implementing the Robert T. Stafford Disaster Relief and Emergency Act, which authorizes federal assistance when the President issues a federal declaration for a Major Disaster or an Emergency. Hurricane Harvey was declared a Major Disaster on August 25, 2017. To apply for FEMA Assistance, individuals should register with FEMA within 60 days of the declaration of the disaster. You can apply online for Disaster Assistance.
FEMA, SBA, and Businesses
By now you may know that FEMA does not directly offer grant assistance to businesses and farmers. FEMA does, however, provide referrals for business owners and farmers, including to the Small Business Association (“SBA”). FEMA will refer an applicant’s registration to the SBA if the applicant’s income meets SBA minimum guidelines.
Only uninsured or otherwise uncompensated disaster losses are eligible for SBA loans. Further, unless used for business purposes, secondary homes, personal pleasure boats, airplanes, recreational vehicles, and similar property are not eligible for SBA loans. In addition to home loans for individuals and households, for businesses the SBA offers Business Physical Disaster Loans and Economic Injury Disaster Loans.
Business Physical Disaster Loans: These are loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Businesses of any size are eligible. Private, non-profit organizations such as charities, churches, private universities, etc., are eligible. Business loans may be up to $2,000,000 for the repair or replacement of real estate, inventories, machinery, equipment and all other physical losses.
Economic Injury Disaster Loans (EIDL): These loans are working capital loans to help small businesses (including agricultural cooperatives and those engaged in aquaculture) as well as most private non-profit organizations. These loans are intended to help businesses meet ordinary financial obligations that cannot otherwise be met as a direct result of the disaster.
Collateral is required for physical loss loans over $25,000 and all EIDL loans over $25,000. The SBA takes real estate as collateral when it is available. The SBA may authorize loan terms up to a maximum of 30 years, but businesses with credit available elsewhere will have a maximum 7-year term.
When submitting a loan application, you will need:
- A signed and dated IRS Form 4506-T; and
- Current financial information such as a personal financial statement, a current profit-and-loss statement, a balance sheet, and a list of debts;
FEMA’s Public Assistance Program
Certain private non-profit organizations are also potentially eligible for FEMA Public Assistance funds. Qualifying private non-profits are those that provide services “of a governmental nature,” including for example:
- Educational services
- Medical care facilities that provide direct patient care, including hospitals, clinics, outpatient services, hospices, and nursing homes
- Emergency services, such as fire and rescue
- Utility services
- Certain irrigation facilities
In addition, eligible entities providing “essential” services also often include:
- Museums and zoos
- Performing arts and community arts facilities
- Community centers and libraries
- Homeless shelters
- Rehabilitation facilities and senior citizen centers
- Low income housing facilities
Eligible organizations must have an effective ruling letter from the IRS at the time of the disaster granting tax exemption under Sections 501(c), (d), or (e) of the Internal Revenue Code, or evidence from the State that the organization is a non-revenue producing, nonprofit entity organized or doing business under State law.
Public Assistance Application Requirements: An applicant (sometimes also called a “subgrantee”) for Public Assistance must apply for assistance using a Request for Public Assistance form. This form is typically submitted at what is called an “Applicants’ Briefing.” The briefing, which is conducted by a representative of the State for potential Public Assistance applicants, will address application procedures for state and local governments as well as eligible private non-profits. FEMA and Texas officials will likely announce scheduled briefings shortly.
If an applicant is unable to submit the Request at the briefing, the applicant must submit the form within 30 days of the date of designation of the area for Public Assistance. Note that an applicant does not need to wait until all damage is identified before requesting assistance. Rather, an applicant has 60 days following its first substantive meeting with the State Public Assistance officials and FEMA (which is generally called a “Kickoff Meeting” and led by a “PAC Crew Leader”) to identify and report damaged facilities to FEMA.
Applicants for Public Assistance must also file an application for a disaster loan from the SBA. If an SBA loan is declined or does not fully cover the damage eligible under the PA Program, the private non-profit organization may be eligible for FEMA assistance.
Eligible Public Assistance entities will be responsible for a long list of obligations, including but not limited to:
- Providing documentation and personnel to work with FEMA and the State in the damage assessment and project application processes;
- Completing its recovery actions; and
- Documenting the use of all funds provided by FEMA in accordance with federal and state contracting requirements.
Additional FEMA disaster relief for individuals and households
FEMA provides financial Housing Assistance through funds paid directly to eligible individuals and households, including:
- Rental Assistance, which is financial assistance to rent alternate housing accommodations while an applicant is displaced from his or her primary residence;
- Repair assistance to repair an owner-occupied primary residence, utilities, and residential infrastructure, including privately-owned access routes (i.e., driveways, roads, or bridges) to a safe and sanitary living or functioning condition; and
- Replacement assistance to help replace an owner-occupied primary residence when the residence is destroyed.
Primary residence generally means the home where the FEMA applicant normally lives during most of the year. FEMA may also provide manufactured homes to use as temporary housing. Applicants (both owners and renters) must be able to prove they occupied the damaged dwelling,
pre-disaster, as their primary residence before receiving Assistance. Where applicable, FEMA will also verify ownership through inspection, public records search, or applicant-submitted documents.
Additional available Assistance under FEMA’s Federal Assistance to Individuals and Households Program (“IHP”) includes but is not limited to:
- Unemployment Assistance
- Benefits and Distribution
- Food Commodities
- Legal Services
- Crisis Counseling
- Transportation Assistance
IHP provides financial assistance and direct services to eligible individuals and households who have uninsured or underinsured necessary expenses and serious needs. If you have applied for Assistance, a FEMA inspector will typically contact you within 10 to 14 days from the date of your application to schedule an appointment to assess you disaster damages.
Transitional Sheltering Assistance (TSA) is also available for eligible disaster survivors who are unable to return to their homes for an extended period of time and who have a continuing need for short-term lodging. To be eligible for TSA individuals and households must:
- Register with FEMA for assistance;
- Pass identity and citizenship verification;
- Have a primary residence located in an area designated for TSA; and
- Be displaced from their pre-disaster primary residence and unable to obtain lodging through another source.
For eligible applicants, FEMA will authorize and fund TSA through direct payments to participating hotels/motels.
Medical or Dental Expenses: FEMA also provides financial assistance to individuals and households with medical or dental expenses caused by a disaster (unless covered by insurance). Applicants for such assistance must submit documentation to indicate the expense was caused by the disaster, is medically-required, and to demonstrate the amount of expense, including for example itemized bills, receipts, or estimates from a medical provider, dental provider, or pharmacy.
Eligible expenses include costs related to:
- Injury or illness caused by the disaster;
- Pre-existing injury, disability, or medical condition aggravated by the disaster;
- Loss of prescription medications; and
- Loss or damage of personal medical or dental equipment.
Child Care: FEMA may provide up to 8 weeks of financial assistance to address disaster-caused child care expenses for eligible households with children aged 13 and under; and/or children aged 14 up to 18 with a disability, as defined by federal law, who need assistance caring for themselves.