So far in southeastern Minnesota over 4,800 people have received FEMA assistance. Only 29 percent of those homeowners have also applied for a loan from the Small Business Administration.
The SBA's Carl Sherrill says it works like a home improvement loan to get people back on their feet. He encourages people to apply whether or not they know how much they need or if they can afford the loan.
"I tell people this is not your tax return. It doesn't have to be that precise. And we are going to do a credit check," he says.
Sherrill acknowledges that not everyone wants a loan, but he says if a resident doesn't apply for an SBA loan that person can't get additional federal dollars, if any are available.
There's no guarantee that residents will qualify for the low-interest federal loan, either. Sherrill says a little over half of the homeowners who applied have been approved.
"We want to work and approve as many loans as we can, the second part of that though is that it doesn't make sense for us or for the applicant for us to make a loan to them, which is going to be a federal obligation, if they do not have the resources to repay that," Sherrill says.
The average SBA loan in this disaster is $46,000, with a monthly payment of about $200. The SBA can approve loans for up to $200,000.
Sherrill says residents don't have to accept the loan offer, but Minnesota Housing Finance Agency Commissioner Tim Marks says if people don't ask for the Small Business Administration's help, they can't ask for assistance from his agency either.
As a condition to our (Quick Start Loan)program we want folks to make sure that they take advantage of federal assistance.Minnesota Housing Finance Agency Commissioner Tim Marks
"As a condition to our program we want folks to make sure that they take advantage of federal assistance," he says.
Marks says if the SBA denies a loan, that automatically qualifies the person for the state's Quick Start loan program. Marks says those forgivable loans are up to $23,000.
"They would never have to make interest or principal payments on it and the condition of the loan would be that they live and use the home as their principle residence for 10 years. If they do that, then the loan is forgiven," Marks says.
The Minnesota Department of Employment and Economic Development is also providing some individual help in the form of unemployment assistance and temporary flood clean-up jobs.
While the help may be needed, Rushford Mayor Les Ladewig says people in his town are very hesitant to ask for a loan.
"There are some of those folks who are leveraged quite highly," Ladewig says. "Any additional debt would put them in a situation that is probably overwhelming."
Leaders in other towns say many people affected by the floods already had mortgages and other debt. Even if residents could afford it, some don't want to rebuild their lives on credit.
Mayor Ladewig says another hindrance may be the stack of applications themselves. There's the FEMA application, then the SBA's, the insurance claims, bank requests and new construction permits.
"I do know for some people the paperwork is overwhelming and stymying so maybe that is the issue," he says. The deadline for applications is the close of business, Monday. FEMA officials say applications are still trickling in. So far, FEMA has issued nearly $18,000,000 in individual assistance.