Hundreds of thousands of Gulf Coast families, hoping to rebuild their homes after the hurricanes using low-interest government loans, are facing high rejection rates and widespread delays at the federal agency that administers the disaster loan program.Albertha Hastens of White Castle, La., was turned down for a loan by the Small Business Administration, which cited her low income. The Small Business Administration, which runs the federal government's main disaster recovery program for both businesses and homeowners, has processed only a third of the 276,000 home loan applications it has received.
And it has
rejected 82 percent of those it has reviewed, a higher percentage than in most previous disasters, saying that many would-be borrowers did not have incomes high enough, or credit ratings good enough, to qualify. The rejections came even though the Federal Emergency Management Agency has referred more than two million people, many of them with low incomes, to the S.B.A. to get the loans.
To a large degree, that
high rejection rate appears to reflect a mismatch between existing government aid programs and the large number of low-income people affected by this year's hurricanes. Despite the widespread poverty in the most damaged regions, the Small Business Administration has not adjusted its creditworthiness standards, which are roughly comparable to a bank's.http://www.nytimes.com/2005/12/15/national/nationalspecial/15loans.html?hp&ex=1134622800&en=6f6c44069f820dda&ei=5094&partner=homepage