Family denied loan to rebuild after Marshall fire

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The Wyss family said they took out an SBA loan in January, then months later the agency told them they were no longer eligible.

BOULDER, Colo. – Many families who lost homes in the Marshall fire have applied for loans to help them rebuild. The Small Business Administration (SBA) has approved over $90 million for homeowners. Months after the fire, some of these survivors are surprised to learn that they cannot get this money yet, even after these loans are closed.

In January, Wendy Wyss said she and her husband felt some hope after the federal government approved a $200,000 loan in January to help her family rebuild. That sense of hope disappeared last week.

“I don’t know when this is going to end,” she said. “We have those times where it feels like it could be okay and then something like Friday happens when we have that and it feels like all is lost.”

Wyss said the SBA told her in April that she was no longer eligible for the loan because, for now, the agency believes her insurance will pay for everything.

That’s not what manufacturers tell Wyss. She thinks her family is several thousand dollars short – the insurance will only cover a fraction of the cost of rebuilding their home.

“I don’t know where the numbers come from, where they got this,” Wyss said. “It’s far from reality.”

According to an official with the SBA’s Disaster Assistance Office, this type of situation can sometimes occur if the SBA approves the loan before the insurance claim is settled. The loan amount can be reduced later if the insurance company’s payment is more than what the SBA estimates it will cost to rebuild a home.

The official said a homeowner can provide documentation from a contractor to prove that the cost of a rebuild will be higher than the SBA’s estimate. Then the agency will reinstate the loan amount above the insurance proceeds.

“There is a way for disaster survivors to get these disaster loans,” the SBA official said. “We want them to know that these funds are available to them.”

The agency official could not say why their estimates for the cost of rebuilding in Boulder County were so much lower than the quotes families receive. He said the agency won’t know that answer until it has enough cases to review where people have requested an increase in their loan amount.

The SBA asks people, like Wyss, to get an estimate from a contractor and let the agency know the loan amount is expected to increase.

It’s an option Wyss is considering so his family can get enough money to return to their property.

“We’re going to find out,” she said. “We will stay here.”

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