RECOVERY ACCELERATION FUND

Only the most devastated communities will receive long-term recovery assistance from the Department Of Housing and Urban development. Those communities that do receive Community Development Block Grants for Recovery (CDBG-DR) often wait 2+ years for these funds to arrive and it takes state and local governments years more to serve eligible families. This delay prevents low-income families from returning safely to their homes. Families who cannot afford to rebuild on their own and do not qualify for SBA loans must make difficult choices: live in the unsafe conditions of their damaged homes, pay for temporary housing while their home sits in disrepair, or suffer the effects of long-term displacement and homelessness. Disasters destroy hard-won equity in homes and, without quick repairs, families lose the ability to transfer generational wealth to their children or provide basic stability for their families.

SBP’s Recovery Acceleration Fund (RAF) is a social impact investment fund that provides microloans for post-disaster rebuilding to low-income, HUD-qualified families who are not eligible for SBA loans. The RAF acts as a bridge loan that allows low to moderate income homeowners to make home repairs years faster than if they had to wait on traditional government programs (CDBG-DR). SBP will use the RAF to address the financial barriers that confront communities of color and other underserved communities by providing HUD-approved microloans.

The RAF allows the most vulnerable survivors to return home sooner, ensures financial stability by safely and quickly returning families to (and restoring equity in) the homes they own, and reduces the stress and trauma associated with displacement after a disaster. SBP has also confirmed that interest rates established through the RAF can be lower than the average market rate, and families can repay the RAF microloan as a balloon payment after they have received HUD reimbursement funds.

SBP's ultimate goal for the RAF is for this model to become the national structure for long-term disaster recovery for low-income homeowners.

FAQ's

Who does the Recovery Acceleration Fund help?

Disaster-impacted, low-income, HUD-qualified families who are not eligible for SBA loans whose home has sustained storm-related damage.

Where is the Recovery Acceleration Fund available?

Currently the Recovery Acceleration Fund is only available to qualified homeowners of Louisiana whose home has sustained storm-related damage from Hurricanes Laura and Delta.

How does the Recovery Acceleration Fund work?

Private, institutional, and charitable funds will be pooled to finance immediate home repairs for survivors who will qualify for federal assistance when it arrives, but are unable to finance repairs to their homes today. RAF allows low-income survivors to return home sooner (months vs 2+ years of uncertainty); preserves affordable housing by safely and quickly returning families to (and restoring equity in) the homes they own; and reduces average repair costs by repairing homes sooner, which helps avoid further damage from disrepair.

Is the Recovery Acceleration Fund permissible within existing regulation?

The RAF loans do not duplicate other disaster benefits. Section 1210 of Disaster Recovery Reform Act (DRRA) of 2018 ensures that recovery related debt (such as SBA Loans) will not be viewed as a duplication of benefit for survivors. This would also apply to the RAF loans

The RAF is possible using the same HUD-approved reimbursement pathways that have been used in Louisiana, Texas, North Carolina, and North Dakota.

SBP has piloted such an approach following disasters in Baton Rouge, LA and Houston, TX. In all cases, families were returned home dramatically faster and HUD funds were eventually used to reimburse initial funders.

Who has invested in the Recovery Acceleration Fund?

This program is made possible in part by the generous contributions of UPS.


APPLY FOR ASSISTANCE

To be eligible for assistance through the Recovery Acceleration Fund, clients must meet the following criteria:

  • Own the home in need of repairs at the time of the storm and maintain ownership to the present day.
  • Occupied the home as your primary residence at the time of the storm.
  • The home is located within one of the FEMA Individual Assistance declared parishes for Hurricane Ida.
  • Have a household income at or below 50% Area Median Income
  • Sustained at least $8k in FEMA inspected real property damage as a result of Hurricane Ida.
  • The home has not been declared substantially damaged by the local floodplain administrator
  • Have not received or expected to receive insurance payments for structural damage greater than $25k.

Eligible Louisiana homeowners can fill out a pre-application to receive a loan from the Recovery Acceleration Fund

BRING RAF TO YOUR COMMUNITY

SBP partners with corporate leaders, nonprofits and other stakeholders to develop and advocate for solutions that address the inherent inequities and inefficiencies of the nation’s disaster preparedness and recovery system. As an innovative solution that has the ability to quickly leverage funds, the Recovery Acceleration Fund serves as a replicable, scalable model that promotes more prompt and predictable recoveries and financial stability for low-income disaster survivors.

If you are an elected official or community or NGO leader that serves disaster impacted survivors and would like to discuss how to bring RAF to your community, or to quality your clients for the Recovery Acceleration Fund program where possible, please contact:

Reese May

Chief Strategy & Innovation Officer

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If you are interested in learning more about or investing in the Recovery Acceleration Fund, please contact:

Keith McCulloch

Chief Financial Officer

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