Community Disaster Loans

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Department Of Homeland Security
CFDA #: 97.030

Purpose of this program:

To provide loans subject to Congressional loan authority, to any local government that has suffered substantial loss of tax and other revenue in an area in which the President designates a major disaster exists. The funds can only be used to maintain existing functions of a municipal operating character and the local government must demonstrate a need for financial assistance.

Possible uses and use restrictions...

Loans are made only to local governments or other political subdivisions of the State, and are based on need, not to exceed 25 percent of the annual operating budget of the local government for the fiscal year in which the disaster occurs up to a maximum of $5 million. The funds cannot be used to meet the non federal share of any Federal program, finance capital improvements, or repair or restore public facilities. FEMA may cancel repayment of all or part of the loan. Cancellation depends on the extent that revenues in the 3 full fiscal years following fiscal year of the major disaster are insufficient to meet the operating budget of the local government, as a result of the disaster, including additional disaster-related operating expenses.

Who is eligible to apply...

Applicants must be in a designated major disaster area and must demonstrate that they meet the specific conditions of FEMA Disaster Assistance Regulations 44 CFR Part 206, Subpart K, Community Disaster Loans. To be eligible the applicant must demonstrate: 1) a substantial loss of tax and other revenues, as a result of a major disaster; 2) a need for financial assistance to perform its governmental functions; and 3) not be in arrears on a previous loan.

Eligible Applicant Categories:
Eligible Functional Categories:

The loan application is developed from financial information contained in the local government's published financial reports and current annual operating budget. Loan awards will be determined in accordance with OMB Circulars No. A-102 and No. A-87 for State and local governments. Awards made to Institutions of Higher Education, Hospitals and Other Non-Profit Organizations will be required to follow the requirements of OMB Circulars No. A-110 and No. A-21.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.

How to apply...

Application Procedure:

Upon declaration of a major disaster, application for a Community Disaster Loan is made through the Governor's Authorized Representative to the Regional Director of FEMA. The Associate Director of the Response and Recovery Directorate approves or disapproves the loan. The Designated Loan Officer will execute a Promissory Note with the applicant. The promissory note must be co-signed by the State, or if the State cannot legally co-sign the note, the local government must pledge collateral security.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

Funds are disbursed to the local government when requested in accordance with the Schedule of Loan Increments in the Promissory Note. Funds awarded to Institutions of Education, Hospitals and Other Non-Profit Organizations will follow requirements of OMB Circulars No. A-110, No. A-21 and No. A-133.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.

Deadlines and process...


The loan must be approved in the fiscal year of the disaster or the fiscal year immediately following.

Note: When available, this section indicates the deadlines for applications to the funding agency which will be stated in terms of the date(s) or between what dates the application should be received. When not available, applicants should contact the funding agency for deadline information.

Range of Approval/Disapproval Time

From 1 to 6 months.

Preapplication Coordination

The State Governor makes a request for a Presidential declaration of a major disaster through the FEMA Regional Director. Requests for assistance must be made by the Governor in accordance with FEMA Disaster Assistance Regulations, 44 CFR 206.36. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or officials designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.

Note: This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units prior to the submission of a formal application to the federal funding agency.


Any disapproval of a loan cancellation can be appealed to the Associate Director with additional information within 60 days of the date of disapproval. Requests to reconsider disapproved loans will be considered by the Associate Director only when additional or new information is provided.

Note: In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).


Not applicable.

Note: In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.

Who can benefit...

Local governments in a designated disaster area.

About this section:

This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.

What types of assistance...

Direct Loans

Financial assistance provided through the lending of Federal monies for a specific period of time, with a reasonable expectation of repayment. Such loans may or may not require the payment of interest.

How much financial aid...

Range and Average of Financial Assistance

Not applicable.

Note: This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.


(Loans) FY 03 est $34,759; FY 04 est $129,008; and FY 05 est to be determined.

Note: The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.

Account Identification


Note: Note: This 11-digit budget account identification code represents the account which funds a particular program. This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.

Examples of funded projects...

Not applicable.

About this section

This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.

Program accomplishments...


Criteria for selecting proposals...

Not applicable.

Assistance considerations...

Length and Time Phasing of Assistance

The length of the loan is generally 5 years, but may be extended. Funds are disbursed per the Schedule of Payments in the Promissory Note.

Formula and Matching Requirements

The amount of the loan is based on the demonstrated need, and may not exceed 25 percent of the applicant's operating budget for the fiscal year in which the disaster occurs. The interest rate is the U.S. Treasury rate for 5-year maturities on the date the Promissory Note is executed. The term of the loan is usually 5 years, but may be extended. Interest accrues on the funds as they are disbursed. The Associate Director may cancel repayment of all or part of the loan if the revenues of the applicant in the 3 fiscal years following the fiscal year of the disaster are insufficient to meet the operating budget because of disaster related revenue losses and unreimbursed disaster related operating expenses.

A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.

Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.

In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.

Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.

Post assistance requirements...


Reports as required in the "Community Disaster Loan Handbook," DAP-5. The applicant must demonstrate a financial need prior to any incremental disbursement.

Note: This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.


In accordance with the provisions of OMB Circular No. A- 133, "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have an audit made for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards is exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.

Note: This section discusses audits required by the Federal agency. The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133. These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year, as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period, rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).


Annual Operating Budgets including revenue and expense and balance sheets must be retained for the duration of the loan. Additional record requirements are detailed in the Federal Disaster Assistance Regulations, 44 CFR 206, Subpart K.

Note: This section indicates the record retention requirements and the type of records the Federal agency may require. Not included are the normally imposed requirements of the General Accounting Office. For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C. For other programs, record retention is governed by the funding agency's requirements.



Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq.; Executive Order 12148; Reorganization Plan No. 3, 1978.

Note: This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).

Regulations, Guidelines, And Literature

"Community Disaster Loan Handbook," DAP-5; Federal Disaster Assistance Regulations, 44 CFR 205 for disaster declared prior to November 23, 1988; Federal Disaster Assistance Regulations, 44 CFR 206 for disasters declared on or after November 23, 1988; "Duplication of Benefits Handbook"; "Disaster Assistance: A Guide to Recovery Programs," FEMA 229(4); "A Guide to Federal Aid in Disasters," DAP-19.

Contact information...

Web Sites
Regional Or Local Office

See Additional Contact Information - FMR Help for a listing of addresses for FEMA's Regional Offices.

Note: This section lists the agency contact person, address and telephone number of the Federal Regional or Local Office(s) to be contacted for detailed information regarding a program such as: (1) current availability of funds and the likelihood of receiving assistance within a given period; (2) pre-application and application forms required; (3) whether a pre-application conference is recommended; (4) assistance available in preparation of applications; (5) whether funding decisions are made at the headquarters, regional or local level; (6) application renewal procedures (including continuations and supplementals) or appeal procedures for rejected applications; and (7) recently published program guidelines and material. However, for most federal programs, this section will instruct the reader to consult the so-called Appendix IV of the Catalog due to the large volume of Regional and Local Office Contacts for most agencies. This information is provided in Additional Contact Information (see below).

Headquarters Office

Department of Homeland Security 245 Murray Drive, SW., Washington, DC 20528. Telephone: (202) 282-8000.

Note: This section lists names and addresses of the office at the headquarters level with direct operational responsibility for managing a program. A telephone number is provided in cases where a Regional or Local Office is not normally able to answer detailed inquiries concerning a program. Also listed are the name(s) and telephone number(s) of the information contact person(s) who can provide additional program information to applicants.

Additional Contact Information (Appendix IV)

Due to the large volume of regional and local office contacts for most agencies, full contact information is also provided separately here in a PDF format: