After many disasters in the U.S. there’s mention of FEMA offering low interest loans, I’ve read the maximum loan is $200K for homeowners. As an example if in fact if true, 2,000 homes were burned down in Hawaii, many of the homes lost had values in excess of $1M, do homeowners need to locate an additional loan of $800K?
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Yes – the loans exist to help repair damages on your primary residence up to $200k. They are designed to primarily benefit lower-income people who did not have other forms of disaster insurance so that they are not left completely destitute.
If the repair of your property is going to be above $200k, you’ll need to secure other funds to help with those repairs. Ideally, you would have had homeowners insurance to help cover those costs – if you don’t, you’ll have to come up with additional loans yourself or simply not repair to the previous value.
Government loans like this are not meant to replace private insurance – they are meant to be a safety net for poorer people to prevent them from losing everything.
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