Hurricane Katrina Flood Victims - Mandatory Relocation & SBA

I am currently working with a elderly family (one is 90% disabled) who was relocated to Denver Colorado after Hurricane Katrina.  This couple used to reside in a wonderful 3 bedroom, 2 bath, 1700 square foot brick ranch style home in a neighborhood called Lakeview in New Orleans - very close to Lake Pontchartrain where the levies broke.  Their daughter also lived a half mile closer to the lake - lost everything too.  However, with the help and support from Village Homes & their in-house mortgage company, I helped the daughter of a family I am working with, relocate to Broomfield last April.

Anyway, their home of 45+ years was completely destroyed - including all personal belongings - there was literally nothing left.  The home has since been scraped and the lot sold to pay off the small mortgage balance.  18 months later, they have yet to receive any reimbursement from their insurance company (probably never will) and the only assistance they received from FEMA is rental assistance for a temporary 600 square foot, one-bedroom apartment.  

They are finally at a point where they have decided to permanently relocate to Colorado and live close to their two daughters (one I mentioned above). We have finally located a property - and God willing - we will close in mid-March.  But for any of you who have worked with SBA for a the Katrina Flood "low-interest loan programs", don't you find it strange that they can not or will not tell you in advance how much the family can qualify for?  When writing offers, the lender letter is always the second or third page right?  But how can you get a lender approval letter when the lender (SBA) requires you to submit a puchase contract FIRST!  It's kind of the cart-before-the-horse scenario.  If you are lucky enough to find a good agent and reasonable sellers, it is possible.

I'd like to pose a few questions for those of you who have worked with SBA before on a Katrina Mandatory Relocation project. What was the loan approval process like?  I understand that they have a $200k loan limit for residental real estate (which doesn't buy much in the Denver market), but I have also heard dozens of stories of people who somehow secured a lot more money than that when SBA factored in their personal losses.  What's the best approach to pushing the SBA loan officer along sooner?  The default SBA loan amount is simply not enough to pay for the same type of home in the Denver market.  Somehow/someway, my clients will have to come up with another $40-50k.  The good news in all of this is that the SBA low interest loans are fixed at ~2.6% for 30-years and they don't charge any closing costs (at least that's my understanding).

If you have any advice for working efficiently with SBA or securing additional funds to relocate in Colorado or other parts of the country, I'd love to hear your stories.

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Anthony M. Rael
http://anthonyrael.com/