Whoa, Nellie!!!

I had already called Mom to ask if she could watch the girls for a couple hours on Friday while we closed on our SBA loan...

And we were feeling pretty chipper knowing that at least we would have some money to work with from SBA if the grant thing turned out to be an enormous disappointment. Things really seemed to be falling into place when we checked the mail and found the 'Information Packet' that Lucretia from the SBA had promised was on its way.

It wasn't until after dinner that Dave sat down to read through the thick stack of documents. "We are pleased to inform you that your loan request has been approved in the amount of $47,500.00, subject to the terms and conditions of the enclosed Loan Authorization and Agreement (LA&A)."

Okay.. so $47,500 is not the $90,000 we actually need to repair the house -- but it seemed like a decent start -- even if it is a 30 year loan and we would end up paying over $70,000 after interest when it is paid off. Well - wait - that didn't sound so good either -- but the plan was to pay it down much earlier than 30 years from now...

That was the plan until we read 'Section 4: Use of Loan Proceeds"

"Borrower will apply all Loan proceeds to the following specific uses:

A. Approximately $6,100 to repair/replace disaster damaged motor vehicle"

Er... Okay.. we could conceivably use this portion to almost pay off the loan for the stupid mini-van.

B. $9,100.00 to repay the Assistance to Individuals and Households Program at Federal Emergency Management Agency.

And that was the first Whoa, Nellie!!!! We have to take out a 30 year loan to pay FEMA back? A loan that doesn't actually cover our expenses and we have to take out almost a quarter of it to pay FEMA back? Does anyone mention on the news that this happens? Because I haven't run across it yet. What I do read is figures for assistance from FEMA -- and figures for loan assistance from SBA... As if both agencies are helping disaster victims. No one ever seems to mention that they're handing out (and taking back) the same money repeatedly. It's like the dollar-on-a-string trick!

And let's remember.. that if we did get that Grant -- the same FEMA money that we just paid back with our SBA loan would be deducted from the Grant amount before it was awarded... And then that Grant amount would have to be used to pay SBA back... Are you scratching your head with me now? Ah.. but there's more.

C. Approximately $10,400.00 to repair/replace disaster damaged personal property (excluding motor vehicles) in similar kind and quantity.

That's great - but we sort of needed the money to repair the house before we move on to contents again....

D. Approximately $21,900.00 to repair/replace disaster damaged real estate...

So the cover letter states we are approved for a loan in the amount of $47,500 -- but when it's all said and done we actually would only receive $21,900 for what we needed the loan for in the first place: to repair our home. How many of you would take out a 30 year loan and a second mortgage on your home for $22K? Uhm.. We wouldn't.

But wait! There's more....

Remember - this is no ordinary loan! This is the Federal Government!

Let's sum up a few of the terms and conditions we could find in our Information Packet:

Funds will be released much like a construction loan -- with no more than $10,000 released at a time. Receipts must be submitted to the SBA for review before any further disbursement. We must make the damaged property available to SBA for inspection and verification of the use of proceeds when so requested. We must return any funds not used for repairs within 1 year of disbursement. We must agree to purchase only American-made equipment and products with the proceeds of this Loan. (!!) We must assign any and all future proceeds whether from insurance, grants, loans, claims for civil liability suits, or salvage directly to the SBA (meaning there is no more assistance once we accept their $21,900 for $47,500.. er make that $70,000).

"Borrower will execute an assignment to SBA of the proceeds of any insurance settlement or recovery for disaster damages in excess of $20,890 for real estate."

Our building must conform to the 'National Earthquake Hazards Reduction Program Recommended Provisions for the Development of Seismic Regulations for New Buildings." And... we must purchase and maintain coverage under the National Flood Insurance Program... which is dandy... but we must also name SBA as loss payee. Yeah.. I don't think so.

I probably don't have to mention at this point that we won't be attending that closing this Friday, do I? We are aware that there will be plenty of consequences for such a decision... It is possible that being approved for an SBA loan would further still reduce any state grant amount -- whether we ever actually accepted the money from the SBA or not. We are willing to take that chance rather than entangle ourselves in such Big Brother mumbo-jumbo.