First and foremost, request an advance
from your insurance adjuster (this requires signing a form). You can read about the claim filing process by clicking "How to File a FEMA Flood Loss Insurance Claim." You can
expect to receive an advance of no more than 10% of what the adjuster
thinks is going to be your damage. Yet, I have seen advances of
$5000-10000 being made on the spot during the loss scoping. Unfortunately, those who are filing repeat flood loss claims cannot get an advance, as noted in "Getting
Paid for a Repeat FEMA Flood Loss Insurance Claim Is Going to be Tougher".
Besides this, there are the three
choices of financing post hurricane construction.
Special Assessment to supplement
General Reserve funds
Most condominium associations have a
general reserve fund that can take on small repairs or unexpected
costs. Of course, Hurricane Sandy's losses exceeded most reserves. A
special assessment generally requires a majority vote, as explained
in each condominium association's by-laws. A special assessment is
the path of the lowest resistance, although it is most onerous to
owners.
A bridge loan for construction from a
bank
For Hoboken residents, a bridge loan can be a viable alternative since banks in town can help. Other than Hudson City Savings bank,
which declined to provide a business loan for reconstruction, many
local banks do provide loans to condominium associations, with
monthly or quarterly maintenance as collateral. Loans are given for a
period of six months to 5 years, plenty of time to recoup losses from
flood insurance. A friend has had success with First RepublicNational Bank. BCB Community Bank's Bayonne office also underwrites
these types of loans. Rates are a few basis points over prime, and
collateral requirements vary, so contact the banks directly.
A SBA Disaster Loan for HOAs
If all else fails, you can contact the
Small Business Administration for a disaster loan. Rates are much
higher if you do qualify for other loans, so understand that this
federally backed agency is the lender of last resort. You need all
estimates for repairs, as well as some sort of documentation from
your adjuster. You can read more here:
http://www.sba.gov/content/fact-sheet-associations
According to their website:
Before SBA will disburse any loan funds, we must have
confirmation that all the money necessary to complete the repairs is
available. Therefore, we must have documentation supporting the total
project cost of the repairs and the amount of anticipated insurance
recoveries. The damages to the common areas must be clearly separated
from the damage to the individual units to establish eligibility.
For
additional information, please contact our Customer Service Center.
Call 1-800-659-2955
(TTY: 1-800-877-8339)
or e-maildisastercustomerservice@sba.gov
For additional tips please read: "5 Money Saving Tips for Hurricane Sandy Victims"
