Just 8 days before Maui fires, federal disaster assistance dollar limits raised significantly

Just eight days before the wildfires on Maui burned to the ground more than 2,200 homes, businesses and other structures, the dollar limits on federal disaster assistance through low-interest loans was dramatically increased.

“This is nationwide, everywhere,” said Cynthia Cowell, public information officer with the U.S. Small Business Administration that administers the programs. “There have been some multiple disasters in some places with very high property values and [the previous limits] weren’t enough to help those people. It’s been voted in Congress and actually here we are now, and just in time for this disaster.”

Disaster victims now can apply for low-interest loans of up to $500,000 for repair and replacement of primary residences. The previous limit was $200,000.

The low-interest loan limit for repair and replacement of household contents, personal effects and cars now is $100,000. It previously was $40,000.

The changes to the federal programs align with inflation, construction costs and home prices, according to the information published in the Federal Register. The changes only went into effect on July 31, 2023.

But even the new limits aren’t likely to cover the costs of many of the more than 2,000 homes burned to the ground on Maui — where prices are among the highest in the nation. The median price of a home on Maui in June 2023 was $1,007,000 for single family homes and $984,450 for condos, according to the Realtors Association of Maui.

Other changes in the program:

• There now is no limit on landscaping and other improvements to grounds, which previously was capped at $5,000,.

• The deferment period for the first payment due has increased from 5 months to 12 months from the date of the initial disbursement to reduce the financial burden for disaster survivors. (Loan interest rates are at 4% or less).

But to be eligible for these loans, Maui County survivors must register with FEMA first to begin the process.

The survivors can do so in several ways: by visiting FEMA’s Disaster Survivor Assistance staff who are visiting American Red Cross shelters, by visiting disasterassistance.gov, calling the disaster assistance helpline at 800-621-3362 or using the FEMA mobile app. If you use a relay service, such as video relay (VRS), captioned telephone or other service, give FEMA the number for that service. 

Jeremy Greenberg, FEMA Director of Operations for Response and Recovery, said in a news conference on Monday that 3,200 people so far have registered for the assistance. He expects many more people will.

The Small Business Administration also provides low-interest loans of up to $2 million to qualified businesses or most private nonprofit organizations to cover disaster losses not fully covered by insurance.

Other more immediate federal assistance includes one-time payments of $700 for critical needs and a transitional shelter assistance program.

People, businesses and nonprofits applying for assistance, including loans, are under no obligation to take the assistance or the loans. But it is best to start the process.

Greenberg said FEMA teams have been surveying hotels and motels for the transitional shelter program, and beginning on Monday eligible survivors of the fires can move into them. But to do so, again, people must register with FEMA first.