Hurricane Katrina Flood Victims - Mandatory Relocation & SBA

By
Real Estate Agent with RE/MAX Alliance

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.

SOLD BY Anthony Rael

 



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

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Rainer
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Danny Smith
DISCOVER TEXAS HOMES - Round Rock, TX

Don't you feel good that you were able to help these people? I get the most satisfaction when I'm able to help a family that has their backs against the wall find a new home. Most think it's not possible and are very appreciative when you prove to them it is.

Congradulations! You did a good job and a good thing!

Jan 30, 2007 07:11 PM #1
Rainer
13,932
Anthony Rael
RE/MAX Alliance - Arvada, CO
RE/MAX Alliance

I can't begin to explain how much satisfaction helping these people brings me.  This solidifies the very reason I am in the real estate profession.  To learn about people who worked so hard their whole lives creating the the american dream and have it vanish off the face of the earth - along with every personal possession (see Google maps for the Lakeview area around Lake Pontchartrain), it breaks your heart.  

I was raised by my grandmother (who passed away 28 years ago) so I have always been able to bond with older folks - I just love 'em.  These buyers are like family to me now & I'm on a mission to get them back on their feet.  They are not looking for any special favors or assistance - they simply need a low-interest loan to help them "start over".  Once again, if anyone out there has worked with Katrina Flood Victims & the SBA to secure a real estate loan, please share your experience and offer any advice. Thanks. -a

SOLD BY Anthony Rael
 

 

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

Jan 31, 2007 12:22 AM #2
Rainmaker
902,005
Debbie Walsh
Shahar Management - Middletown, NY
Hudson Valley NY Real Estate 845.283-3036

Good for you taking the step and helping these people out.  My mother lives just outside New Orleans, LA and was very lucky that her home only sustained minimal damage compared to most.  Even though it is years later it is still like a war zone down there.   They don't have nearly the help they should down there so every little bit helps.   Kudos to you!

 

Feb 24, 2009 10:22 AM #3
Rainer
13,932
Anthony Rael
RE/MAX Alliance - Arvada, CO
RE/MAX Alliance

Thank you Debra.

I just spoke with my clients over the holidays and told tell me that they are still fighting with the insurance company as well as having lingering issues with the SBA in funding the loan (the home closed in Mar07).   I asked them if they've had a chance to go back to the old neighborhood and they said that the entire area was still a complete loss and very much like a war zone.  Hard to believe in America eh?

Feb 24, 2009 11:33 AM #4
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Rainer
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Anthony Rael

RE/MAX Alliance
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