FEMA aid can help, but won't be a cure-all

By Naomi Snyder • THE TENNESSEAN • May 5, 2010 Middle Tennessee residents and businesses devastated by the floods will get access to a host of resources now that President Barack Obama declared a major disaster for the region, including rental assistance, help with hotel bills, repair grants and low-interest loans. Many homeowners and businesses recently found out their insurance policies didn't pay for flooding. Unfortunately, they may find federal aid is limited, too, as discovered in previous disasters. "Our role is to fill in the gaps,'' said Kurt Pickering, a spokesman with the Federal Emergency Management Agency. "It is not intended to make you whole." Registering is the first step The first step for those seeking aid is to register, either by calling on the phone at 1-800-621-FEMA or registering online at www.DisasterAssistance.gov FEMA coordinates the aid, even though the majority of the federal help in dollar terms is in the form of low-interest loans from the U.S. Small Business Administration. Those loans are available to businesses and to homeowners needing to repair or replace damaged homes. FEMA may hand out checks within days of a disaster declaration to homeowners and businesses for temporary help, such as to pay hotel bills or for rental housing. But most needing long-term help with damaged and uninsured buildings will have to apply for a SBA loan. Application process isn't easy Others who have gone through the process haven't always found it easy. "If folks want to rebuild, it's not enough,'' said Terry Gillim, a minister who coordinated local rebuilding efforts as president of Long Term Recovery of Macon County after the tornadoes there two years ago. "FEMA is there as a stop-gap for people who are not insured at all." Gillim said residents in Lafayette after the tornadoes often were confused or discouraged by the paperwork to get long-term aid. When the SBA rejected people for loans, they sometimes didn't follow through and apply a second time for a grant through FEMA, he said. "It was just a hassle with all the paperwork,'' said Tim Hood, the owner of Rock and Roll Auto Sales, a used car dealership in Lafayette. Hood said he threw his SBA rejection letter in the trash after his dealership was destroyed in the tornadoes. He ended up getting a private loan to rebuild through a bank instead. "It wasn't very much help,'' he said. "In this area, I don't know anyone they helped. The Red Cross and the Salvation Army were about the best thing here (after the tornadoes)." Loans, grants are capped An SBA spokesman, Michael Lampton, said the SBA has to review the assets, debt and creditworthiness of applicants for long-term aid. Borrowers must be able to repay their loans. SBA disaster loans are capped at $200,000 to rebuild a home and up to $ million for businesses. If homeowners or businesses aren't eligible for a loan, they can apply for a grant, Lampton said. But less grant money is available for individuals. If homeowners lost a $150,000 house, for example, FEMA's grant is capped at roughly $30,000, no matter what the total loss. Given the potential extent of the damage, Middle Tennessee could need a lot of help, especially because many homeowners and businesses did not have flood insurance. "You'll find agents getting sued because they wouldn't sell (flood insurance) to people,'' said Rene Shoptaw, a commercial insurance broker. "There will be a lot of fallout from this months from now. Not everyone will be made whole. It's very sad."