SBA Disaster Loans for Homeowners After Water Damage: A Complete Guide

Frequently Asked Questions

What is the interest rate on an SBA disaster loan for homeowners?

For homeowners who cannot get credit elsewhere, the SBA charges 1.75% interest on real estate loans. For homeowners who do have access to credit, the rate is around 3.245% for real estate. The SBA determines your rate based on your credit history and whether private lenders would be willing to make you a comparable loan.

What is the maximum SBA disaster loan amount for homeowners?

Homeowners can borrow up to $500,000 to repair or replace damaged real estate (the physical structure). An additional $100,000 is available for personal property (furniture, appliances, clothing, vehicles). The maximum total for a homeowner is $600,000. Renters can apply for personal property loans up to $100,000.

Do I have to accept the SBA loan if I apply?

No. Applying for an SBA loan does not obligate you to accept it. In fact, FEMA often requires you to apply for an SBA loan before it will consider you for certain types of other-needs assistance — so apply even if you plan to use your insurance settlement instead. You can decline the loan after receiving the offer.

How long do I have to pay back an SBA disaster loan?

Repayment terms can extend up to 30 years, depending on your financial situation. Monthly payments are typically lower than a home equity loan because of the long repayment schedule and low interest rate. The SBA may also defer payments for up to 11 months while you complete repairs.

Can I get both FEMA assistance and an SBA disaster loan?

Yes — they serve different purposes. FEMA grants cover immediate essential needs for uninsured losses and have a relatively low maximum award. SBA loans cover larger repair costs and can be used alongside insurance proceeds and FEMA grants. Most homeowners with significant structural damage benefit from all three sources. Apply for FEMA first, then SBA.