U.S. House passes bill to help Harvey federal loan recipients

Washington, D.C. (KTRK) -- When the government offered low interest loans to Hurricane Harvey victims more than two years ago, it looked like a good deal. But, as 13 Investigates uncovered in October, those same homeowners were denied additional aid due to "duplication of benefits."

Now, U.S. Congressman Dan Crenshaw, R-Texas, and U.S. Congresswoman Rep. Lizzie Fletcher, D-Texas, are pushing for a $45 million bipartisan effort that would help those federal loan recipients denied additional aid.

RELATED: State denies Harvey aid to hundreds of federal loan recipients

The measure, which was included as an amendment to the Puerto Rico and disaster relief bill, passed the U.S. House on Friday.

"My constituents never thought that taking out an SBA loan, a loan that they would be paying back, would prevent them from also receiving other federal aid," Crenshaw said Friday on the House floor. "This problem of dual benefits was addressed in law recently by my friend, Rep. Garret Graves from Louisiana, but the fix came too late for some. ... This amendment will not be able to provide the estimated nearly $3 billion that the Texas General Land Office believes would be needed to help all those affected, but my amendment will solve this problem for some of the most vulnerable people who unfairly fell through the bureaucratic cracks."

13 Investigates spoke with several victims denied aid after taking tens of thousands of dollars in loans.

As of October 2019, Rebecca Loofboro, of League City, was one of 430 people who the Texas General Land Office said were ineligible for help from the state's Homeowner Reimbursement Program due to "duplication of benefits." About 75 percent of those denied applicants received an SBA loan.

If Loofboro spent personal savings, or even borrowed money from a bank instead of the government, she would have been eligible for a grant up to $50,000. And that grant could have gone toward paying back the private loan. But because she borrowed money from the government at a lower interest rate, she was denied aid.

The GLO previously told 13 Investigates a homeowner who receives an SBA loan can still receive reimbursement from the program, but only if it is deemed "out of pocket expenses." For example, if a homeowner completed $15,000 in repairs and took out a $10,000 SBA loan, they would have to pay that loan back but could receive reimbursement for the remaining $5,000 if they can prove it was an out-of-pocket expense toward repairing their flood-damaged home.

"Many are still working to recover from Harvey's devastating impact. I am always looking for ways to help with our recovery. When I saw the opportunity to correct to the denial of benefits to Harvey survivors who were denied federal assistance because they took out SBA loans, I was glad to partner with Congressman Crenshaw to deliver these funds for our community," Fletcher said in a news release. "During Harvey, our community demonstrated that we are at our best when we are working together to solve problems - and this bipartisan amendment reflects that very Houston spirit."

The bill is awaiting a vote by the U.S. Senate.

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