SBA Disaster Loan Limits: Policy Options and Considerations

SBA Disaster Loan Limits: Policy Options and Considerations

SBA Disaster Loan Limits: Policy Options and
June 17, 2024
Considerations
Bruce R. Lindsay
The Small Business Administration (SBA) Disaster Loan Program provides disaster loans to
Specialist in American
eligible households and businesses to help them rebuild and recover after a disaster. SBA disaster
National Government
loans include (1) Personal Property Disaster Loans, (2) Real Property Disaster Loans, (3)

Business Physical Disaster Loans, and (4) Economic Injury Disaster Loans (EIDL). As described
R. Corinne Blackford
in this report, each type of loan has a maximum limit that has changed over time.
Analyst in Small Business
and Economic
• Personal Property Disaster Loans provide creditworthy homeowners or renters
Development Policy
located in a declared disaster area with up to $100,000 to repair or replace personal

property owned by the survivor;
Daniela E. Lacalle
• Real Property Disaster Loans provide creditworthy homeowners located in a declared
Research Assistant
disaster area with up to $500,000 to repair or restore the homeowner’s primary residence

to its pre-disaster condition;
•

Business Physical Disaster Loans provide businesses located in a declared disaster
area with up to $2 million to repair or replace damaged physical property, including
machinery, equipment, fixtures, inventory, and leasehold improvements; and
• EIDLs provide businesses located in a declared disaster area with up to $2 million to help meet financial
obligations and operating expenses that could have been met had the disaster not occurred. EIDL loan
proceeds can only be used for working capital necessary to enable the business or organization to alleviate
the specific economic injury and to resume normal operations. Loan amounts for EIDLs are based on actual
economic injury and financial needs, regardless of whether the business suffered any property damage.
The maximum amount that can be provided for a disaster loan, or disaster loan limit, was first established in SBA regulations
in 1968. In 1980, Congress began establishing disaster loan limits in statute, followed by SBA regulation updates.
Historically, limits for business disaster loans in SBA regulations have been for the same amount as set in statute, whereas
limits on home disaster loans in SBA regulations have been for a lesser amount than set in statute. SBA is authorized to
establish loan limits lower in regulation than in statute because the statute establishes a ceiling for disaster loans, but not a
floor. In 2008, Congress increased the disaster loan limit in statute to $2 million; SBA revised the business loan limits in
regulation to $2 million but not the home loan limit. Consequently, the limits on disaster home loans (previously $40,000 for
personal property disaster loans and $200,000 for real property disaster loans) remained the same in federal regulation for
two decades (from 1994 to 2023). In 2023, SBA revised the disaster loan limit for personal property disaster loans to
$100,000, and real property loans to $500,000. Further, SBA announced that the revision allowed the SBA Administrator “to
increase maximum loan amounts to homeowners and renters … based on appropriate economic indicators, [including]
current building costs, regional median home prices, the Consumer Price Index, and the Producer Price index” in a disaster
declared region (or regions).
This report provides an overview of the regulatory and statutory history of SBA disaster loan limits followed by policy
options that include information about inflation, construction costs, and median home values and home price trends. This
report also includes brief descriptions of SBA disaster loan categories.
Congressional Research Service

link to page 4 link to page 5 link to page 8 link to page 8 link to page 9 link to page 11 link to page 14 link to page 14 link to page 16 link to page 16 link to page 16 link to page 17 link to page 18 link to page 8 link to page 9 link to page 10 link to page 11 link to page 12 link to page 13 link to page 15 link to page 15 link to page 15 link to page 15 link to page 18 link to page 18 link to page 19 link to page 20 SBA Disaster Loan Limits: Policy Options and Considerations

Contents
Introduction ..................................................................................................................................... 1
Historical Developments ................................................................................................................. 2
Contextualizing SBA Disaster Loan Limits .................................................................................... 5
Inflation ............................................................................................................................... 5
Construction Costs .............................................................................................................. 6
Median Home Prices and Values ........................................................................................ 8
Variations in State and County Home Costs ...................................................................... 11
Personal Property, Home Furnishings, and Vehicles ................................................................ 11
Policy Options ............................................................................................................................... 13
Disaster Loan Limit Formulas ................................................................................................ 13
Disaster Loan Limit Floors ..................................................................................................... 13
SBA Disaster Loan Account Report ........................................................................................ 14
Concluding Observations .............................................................................................................. 15

Figures
Figure 1. Regulatory and Statutory History of Disaster Loan Limits.............................................. 5
Figure 2. Consumer Price Index Change ......................................................................................... 6
Figure 3. U.S. Construction Cost Change ....................................................................................... 7
Figure 4. Consumer Price and Construction Cost Comparison ....................................................... 8
Figure 5. Median Sales Price for Used Homes in the United States ............................................... 9
Figure 6. Financial Characteristics for Housing Units with a Mortgage, 2022 ............................. 10
Figure 7. Consumer Price Index for All Urban Consumers: Household Furnishings and
Supplies in the United States ...................................................................................................... 12
Figure 8. Consumer Price Index for All Urban Consumers: New Vehicles; Used Cars and
Trucks in the United States......................................................................................................... 12

Tables
Table 1. Small Business Administration Disaster Loan Account Appropriations, FY2015-
FY2023 ....................................................................................................................................... 15

Appendixes
Appendix. SBA Disaster Loan Categories .................................................................................... 16

Contacts
Author Information ........................................................................................................................ 17

Congressional Research Service

link to page 8 SBA Disaster Loan Limits: Policy Options and Considerations

Introduction
Since 1953, the Small Business Administration (SBA) Disaster Loan Program has provided
disaster loans to eligible households and businesses to help them rebuild and recover after a
disaster. Disaster loans for individuals and households (known collectively as home disaster
loans) fall into two categories: (1) Personal Property Disaster Loans and (2) Real Property
Disaster Loans. Disaster loans for businesses (known collectively as business disaster loans) also
fall into two categories: (1) Business Physical Disaster Loans, and (2) Economic Injury Disaster
Loans (EIDL).
Beginning in 1957, the SBA set loan limit amounts which were published in the Federal Register
and presented in SBA’s Administrative Manual. In 1968, SBA started setting limits through
regulation. Since 1980, Congress has established disaster loan limits (or caps) in statute
establishing a maximum amount of money that can be borrowed through these programs for any
one disaster. The SBA Administrator is authorized to set the limit at a lower rate because the
statutory language establishes a ceiling for disaster loans but does not establish a floor.1
Historically, businesses have been eligible for the full amount set in statute whereas individuals
and households have been eligible for a lesser amount set in federal regulation by SBA. This is
presumably because the costs associated with repairing and rebuilding a home are less than
repairing and rebuilding a business. Working capital expenses may also be significantly higher
than home repair and rebuilding costs. Additionally, smaller loan amounts may help the SBA
provide more loans to individuals and households if there are budgetary limitations for these
programs.2
The current maximum amount available to individuals and households for home disaster loans
was set in regulation by the SBA Administrator in 1994. They are (1) $100,000 for Personal
Property Disaster Loans; and (2) $500,000 for Real Property Disaster Loans. The SBA
Administrator is authorized to increase disaster home loan limits based on “appropriate economic
indicators for the region(s) in which the disaster occurred.”3 The economic indicators include
current building costs, regional median home prices, the Consumer Price Index (CPI), and the
Producer Price Index (PPI).
The current maximum amount available to businesses through Business Physical Disaster Loans
and EIDLs is $2 million, the same amount that was set in statute in 2008 (see Figure 1).4 For
small business borrowers that are considered major employers and designated as a Major Source
of Employment (MSE), the SBA may, under specified circumstances, exceed the $2 million loan
limit to avoid substantial unemployment in a disaster area. P.L. 110-246 included a provision
granting the SBA Administrator this waiver authority.5 The SBA has granted waivers for eligible

1 P.L. 110-246 specifies that the amount provided to borrow “may not exceed” $2 million.
2 For more information on SBA disaster loan funding, see CRS Insight IN11433, Supplemental Appropriations: SBA
Disaster Loan Account, by Bruce R. Lindsay et al.
3 13 C.F.R. §123.105(d).
4 Established in P.L. 110-246, Food, Conservation, and Energy Act of 2008.
5 15 U.S.C. §636.
Any business may be eligible for Major Source of Employment (MSE) status if, at the time the disaster commences, it
has one or more locations in the disaster area that, individually or in the aggregate, employed 10% or more of the entire
work force within the commuting area of a geographically identifiable community, no larger than a county, provided
that the commuting area does not extend more than 50 miles from such community; or employed 5% or more of the
work force in an industry within the disaster area and, if the concern is a nonmanufacturing concern, employed no
fewer than 50 employees in the disaster area or, if the concern is a manufacturing concern, employed no fewer than 150
(continued...)
Congressional Research Service

1

link to page 19 SBA Disaster Loan Limits: Policy Options and Considerations

MSEs in the past. For example, based on SBA disaster loan data in FY2022, the SBA approved
37 applications for disaster loans exceeding $2 million.6 A similar waiver authority is not
provided for the individuals and households programs.
This report provides an overview of the historical developments of disaster loan limits, followed
by policy options related to disaster loan limits. To help contextualize disaster loan limits, this
report includes narratives about inflation, construction costs, and median home values and prices.
A description of SBA disaster loan categories is located in the Appendix of this report.
Historical Developments
SBA disaster loan limits were first introduced in 1957 through SBA notices published in the
Federal Register and presented in SBA’s Administrative Manual. For example, on July 20, 1957,
SBA announced that it would not provide disaster loans exceeding $100,000.7 Previously, the
disaster loan amount was determined on an individual basis, taking into account the
circumstances of the applicant and the disaster. A search of the Federal Register indicates that
SBA limited disaster loans to no more than $350,000 in 1965.8
SBA disaster loan limits first appeared in the Code of Federal Regulations (C.F.R.) in 1968. Prior
to that, the C.F.R. indicated that “there is no statutory limitation on the amount of a disaster loan”9
and, as mentioned, SBA announced its disaster loan limits through notices published in the
Federal Register. In this 1968 C.F.R. reference, SBA revised paragraph (a) of 13 C.F.R. §123.6,
in part, by setting limits on business disaster loans at $100,000 for any one disaster (except for an
additional amount to refinance any prior SBA disaster loan), personal property loans at $10,000,
and real property loans at $20,000.10 In 1970, the SBA increased the limit for business disaster
loans to $500,000 and the limit for real property loans to $50,000. The SBA did not change the
limit for personal property loans ($10,000).11 The SBA did not provide a rationale for establishing
the 1968 and 1970 disaster loan limits, or why those particular dollar amounts were selected.
In 1980, disaster loan limits were first placed in statute (P.L. 96-302).12 Section 119(a) of P.L. 96-
302 amended Section 7(c) of the Small Business Act by adding a new paragraph:

employees in the disaster area; or employed no fewer than 250 employees within the disaster area. In addition, the loan
applicant must have used all funds from its own resources and all available credit elsewhere to alleviate the physical
damage and/or economic injury sustained. Furthermore, SBA will consider a waiver of the legislative limit only to the
extent that loan assistance in excess of $2,000,000 is necessary after the applicant, its affiliates, and its principals use
business and personal assets and credit to the greatest extent possible without incurring undue hardship. See U.S. Small
Business Administration (SBA), Office of Disaster Assistance, “Disaster Assistance Program SOP 50 30 9,” pp. 105-
107, at https://www.sba.gov/document/sop-50-30-9-disaster-assistance-program.
6 CRS interpretation of U.S. Small Business Administration (SBA), “Disaster Loan Data: Disaster Loan FY22,”
https://data.sba.gov/dataset/disaster-loan-data/resource/dfca7ddd-348c-43a1-bb89-98fae0e6ff3a?inner_span=True.
Some businesses may have accepted more than one SBA disaster loan. Not all approved disaster loan applicants accept
the loan.
7 SBA, “Small Business Administration: Delegation Relating to Financial Assistance Including Disaster Loans,
Procurement and Technical Assistance, and Administration,” 22 Federal Register 5811, July 20, 1957.
8 SBA, “Small Business Administration: Delegation of Authority to Conduct Program Activities in the Regional
Offices,” 30 Federal Register 3340, March 11, 1965.
9 See for an example 13 C.F.R. §123.6, 1967 Edition.
10 SBA, “Title 13—Business Credit and Assistance, Part 120—Loan Policy,” 33 Federal Register 7622, May 23, 1968.
11 SBA, “Business Credit and Assistance, Part 120—Loan Policy,” 35 Federal Register 16170, October 15, 1970.
12 P.L. 96-302, An Act to Provide Authorizations for the Small Business Administration, and for Other Purposes.
Congressional Research Service

2

SBA Disaster Loan Limits: Policy Options and Considerations

Provided further, that no loan under subsection (b)(1) shall be made, either directly or in
cooperation with banks or other lending institutions through agreements to participate on
an immediate or deferred basis, if the total amount outstanding and committed to the
borrower under such subsection would exceed $500,000 for each disaster, unless an
applicant constitutes a major source of employment in an area suffering a disaster, in which
case the Administration, in its discretion, may waive the $500,000 limitation.13
Congress did not provide a rationale for placing the limit in statute, or why $500,000 was selected
as the limit.14
It appears that businesses—not individuals and households—became eligible for the $500,000
limit established in P.L. 96-302. Instead, individuals and households continued to be eligible for
the maximum amount established in the 1970 revised federal regulation: $50,000 for real property
disaster loans, and $10,000 for personal property loans.15
Starting in the 1980s, SBA commonly made businesses eligible for the full amount established in
statute and individuals and households eligible for a lesser amount by regulation. The Small
Business Act authorizes SBA to set limits for home loans in regulation so long as they do not
exceed limits established in statute by Congress. Under the Small Business Act, “no loan[s] ...
shall be made ... [that] exceed $500,000.” Thus, home disaster loans remained capped at the
amount established in 1970 despite the statutory loan limit increase in 1980 (P.L. 96-302).
In 1984, SBA increased the limits for real property disaster loans to $100,000 and personal
property loans to $20,000 in federal regulation. SBA disaster loan limits for business disaster
loans remained at the maximum amount established in P.L. 96-302 ($500,000).
In 1993, without specific explanation, Congress tripled the limit on disaster loans in statute (P.L.
103-75) from $500,000 to $1.5 million.16
Following the Northridge earthquake in California in 1994, SBA increased personal property
disaster loans from $20,000 to $40,000 and real property disaster loans from $100,000 to
$200,000 in regulation.17 According to SBA, the maximum loan amount was increased because
previous loan amounts were insufficient to meet the needs of “homeowners and renters
confronted by the effects of physical disasters by virtue of the impact of economic inflation.”18
SBA further stated that the previous maximum loan amounts were:
inadequate to compensate many disaster victims for the costs associated with rebuilding,
replacing and repairing residential, real property and household effects such as clothing,
furniture and appliances which have been lost or damaged as a result of a physical disaster.
Moreover, in the aftermath of disasters, especially large catastrophes, construction costs
often increase sharply.19

13 It is unclear if the SBA Administrator has ever waived the $500,000 limitation. CRS could not locate a waiver of this
limitation.
14 Congress has not made distinctions between loan types each time it established limits.
15 SBA, “Business Credit and Assistance, Part 120—Loan Policy,” 35 Federal Register 16170, October 15, 1970.
16 P.L. 103-75, Emergency Supplemental Appropriations for Relief from the Major, Widespread Flooding in the
Midwest Act of 1993.
17 13 C.F.R. §123.105. According to a report by the University of California at Berkeley, repairs following the
Northridge earthquake costed approximately $13 billion. See Kathleen Scalise, Damage Claims Skyrocket from
Northridge Earthquake, Finds New UC Berkeley Report, University of California at Berkeley, October 1, 1996,
https://www.berkeley.edu/news/media/releases/96legacy/north.html.
18 SBA, “Disaster-Physical Disaster and Economic Injury Loans,” 59 Federal Register 6214, February 10, 1994.
19 Ibid.
Congressional Research Service

3

link to page 8 link to page 18 link to page 8 SBA Disaster Loan Limits: Policy Options and Considerations

Generally, regulatory changes are made after issuing a public notice. However, in this instance,
SBA stated that the new maximum loan amount was established without public notice in an effort
to meet immediate disaster loan demand caused by the earthquake. According to SBA, 13 C.F.R.
§123.1(b):
authorizes emergency changes in the regulations governing its disaster assistance program,
and 5 U.S.C. 553(b)(B) which permits publication of regulations in final form without
notice of comment when an agency finds that good cause exists for publication in final
form on an emergency basis, and that notice and comment is impracticable, unnecessary
or contrary to the public interest. In this regard, the public interest in seeing to it that the
new limitations are effective as to the recent California earthquake disaster makes the
utilization of notice and comment rulemaking impracticable.20
In 2008, Section 12078 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246)
amended the Small Business Act to make the disaster assistance program more accessible to
disaster victims, including by raising the statutory loan limit for disaster loans from $1.5 million
to $2 million and authorizing the SBA Administrator to “increase the aggregate loan amount ...
for loans relating to a disaster to a level established by the Administrator, based on appropriate
economic indicators for the region in which that disaster occurred.’’21 While SBA revised the
C.F.R. to make businesses eligible for the full amount, SBA did not revise disaster loan limits for
home disaster loans in regulation and limits for home disaster loans remained the same as those
established in 1994 by regulation ($40,000 for personal property disaster loans and $200,000 for
real property disaster loans). Section 12078 of the Food, Conservation, and Energy Act of 2008
has been the most recent adjustment to disaster loan limits in statute. Figure 1 provides a list of
regulatory and legislative disaster loan limit developments.
In May 2020, SBA lowered the maximum loan amount for Economic Injury Disaster Loans
(EIDL) for Coronavirus Disease 2019 (COVID-19) relief to $150,000 due to unprecedented
demand for limited loan resources.22 The maximum loan amount was raised again as the SBA
Disaster Loan Account was replenished with supplemental funding (see Table 1). In March 2021,
SBA announced an increase in the maximum amount for COVID-19 EIDL relief from $150,000
to $500,000.23 In September 2021, SBA raised the maximum amount to $2 million.24
In June 2023, SBA raised the maximum loan amount for personal property disaster loans to
$100,000, and real property disaster loans to $500,000 (see Figure 1).25

20 Ibid.
21 A search of government documents including hearings, bill reports, and notices in the Federal Register failed to
identify instances of the SBA Administrator increasing the aggregate amount based on economic indicators. Nor did it
identify the rationale for why the statutory loan limit was increased to $2 million, or why that particular amount was
selected.
22 SBA, Office of Inspector General, Inspection of the Small Business Administration’s Initial Response to the
Coronavirus Pandemic, October 28, 2020, p. 10, https://www.sba.gov/sites/default/files/2020-10/SBA OIG Report 21-
02.pdf. According to the report, SBA “approved and disbursed more loans for COVID-19 relief than for all other
disasters combined in the agency’s history.” See page 3 of the report.
23 SBA, SBA to Increase Lending Limit for COVID-19 Economic Injury Disaster Loans, March 24, 2021,
https://www.sba.gov/article/2021/mar/24/sba-increase-lending-limit-covid-19-economic-injury-disaster-loans.
24 SBA, SBA Administrator Guzman Enhances COVID Economic Injury Disaster Loan Program to Aid Small
Businesses Facing Challenges from Delta Variant, September 9, 2021, https://www.sba.gov/article/2021/sep/09/sba-
administrator-guzman-enhances-covid-economic-injury-disaster-loan-program-aid-small-businesses.
25 Small Business Administration, “Disaster Assistance Loan Program Changes to Maximum Loan Amounts and
Miscellaneous Updates,” 88 Federal Register 39335, June 16, 2023.
Congressional Research Service

4

link to page 9
SBA Disaster Loan Limits: Policy Options and Considerations

Figure 1. Regulatory and Statutory History of Disaster Loan Limits

Source: CRS interpretation of regulatory and statutory adjustments to disaster loan limits.
Contextualizing SBA Disaster Loan Limits
One challenging aspect of establishing disaster loan limits is the lack of consensus on a model or
formula for determining disaster recovery rebuilding and repair costs. Establishing an appropriate
disaster loan limit is difficult for a variety of reasons, including (1) demolition, labor,
construction, and material costs vary by region and fluctuate over time; (2) variation between
states and regions with respect to median home costs and prices, building permits, and codes; and
(3) “normal” reconstruction costs may be of limited value to establish disaster reconstruction
costs because disasters can deplete labor and/or material in an area, which may lead to increased
labor and material costs.
An additional consideration associated with developing disaster loan limits is whether the current
loan limits are restrictive to individuals and households residing in areas with higher property
prices and values.
The following sections help frame these issues by examining a range of factors Congress might
consider in evaluating disaster loan limits.
Inflation
Inflation, or the general rise in prices of goods and services in the economy, is an important
indicator of purchasing power over time, or the value of a dollar. One tool used to measure
inflation, the CPI, covers prices for consumer goods and services typically purchased by
households, and is often used to adjust household incomes for inflation.
Figure 2 shows the CPI from 1994, when personal and real property disaster loan limits were last
updated, to 2023. The CPI grew from about 148 in 1994 to just over 304 in 2023 (note that CPI
values fluctuate from month to month), which can be expressed as a growth rate of 106%. In
2008, when the business disaster loan limit was last revised, the CPI was 215, representing 42%
growth from 2008 to 2023.
Congressional Research Service

5

link to page 10
SBA Disaster Loan Limits: Policy Options and Considerations

Figure 2. Consumer Price Index Change
1994-2023

Source: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers, https://www.bls.gov/
cpi/data.htm
Notes: Data represent annual averages of monthly values.
Construction Costs
SBA home and business physical disaster loans are used to fund reconstruction projects to repair
and replace primary residences and businesses. Figure 3 shows how construction costs have risen
since 1994, based on a well-known construction cost index (CCI) used by the construction
industry to estimate project costs and prepare bids. The index takes into account the costs of both
construction materials and labor, which vary by market (geographic area) and type of
construction (e.g., commercial or residential building; wood-frame or steel-frame structure).26
According to the index, construction cost increases began to accelerate in 2004, during the years
leading up to the 2008 financial crisis, with the largest year-to-year increases occurring between
2020 and 2022. From 1994 to 2023, the CCI grew by 147%, and from 2008 to 2023, it grew by
61%.

26 The CCI is published by the Engineering News-Record and is based on data from 20 cities, including the following:
Atlanta, GA; Baltimore, MD; Birmingham, AL; Boston, MA; Chicago, IL; Cincinnati, OH; Cleveland, OH; Dallas,
TX; Denver, CO; Detroit, MI; Kansas City, MO; Los Angeles, CA; Minneapolis, MN; New Orleans, LA; New York,
NY; Philadelphia, PA; Pittsburgh, PA; San Francisco, CA; Seattle, WA; St. Louis, MO.
Congressional Research Service

6

link to page 10 link to page 11
SBA Disaster Loan Limits: Policy Options and Considerations

Figure 3. U.S. Construction Cost Change
1994-2023

Source: Engineering News-Record (ENR), Construction Cost Index History, https://www.enr.com/economics/
historical_indices.
Notes: Data represent annual averages of monthly values.
The data provided in Figure 3 may not be analogous to reconstruction costs after a disaster. As
mentioned, disasters potentially stress the availability of labor, local resources, and materials
which may compound reconstruction costs after a disaster takes place.
The graph in Figure 4 plots the CPI along with the CCI, to show the difference between the rise
of the cost of a general basket of goods and services and construction costs. In 2013, the CCI
eclipsed the CPI and has remained higher.
Congressional Research Service

7

link to page 12
SBA Disaster Loan Limits: Policy Options and Considerations

Figure 4. Consumer Price and Construction Cost Comparison
1994-2023

Source: Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers, https://www.bls.gov/cpi/
data.htm; Engineering News-Record (ENR), Construction Cost Index History, https://www.enr.com/economics/
historical_indices.
Notes: Data represent annual averages of monthly values.
Median Home Prices and Values
Another factor that may be considered when contemplating maximum loan amounts for SBA
disaster loans are home costs. The following sections examine home prices and values, including
how they have changed over time.
Home Prices
The Federal Reserve Bank of St. Louis indicates that the median sales price for a used home in
the United States was $130,000 in 1994. Since then, median home sales prices have steadily
increased to $212,700 in 2004, peaking at $457,475 in 2022, and then dropping to $426,525 in
2023 (see Figure 5).
Congressional Research Service

8

link to page 13
SBA Disaster Loan Limits: Policy Options and Considerations

Figure 5. Median Sales Price for Used Homes in the United States
1994-2023

Source: Derived from Federal Reserve Bank of St. Louis, Median Sales Price of Houses Sold for the United States,
https://fred.stlouisfed.org/series/MSPUS#0.
Note: The current SBA Real Property Disaster Loan limit is $200,000.
Home Values
Some datasets assess homes by value rather than price. Value is generally considered what homes
with similar features and in similar condition might be sold for in a given area. Based on U.S.
Census Bureau data, the median home value in 2022 was $354,100. Half of states in the United
States (including Washington, DC) had median values above the $315,000 range (see Figure 6).
Congressional Research Service

9

SBA Disaster Loan Limits: Policy Options and Considerations

Figure 6. Financial Characteristics for Housing Units with a Mortgage, 2022
Median Home Values

Source: U.S. Census Bureau, S2506, Financial Characteristics for Housing Units with a Mortgage, 2022,
https://data.census.gov/table/ACSST1Y2022.S2506?q=S2506&g=010XX00US$0400000&y=2022.
Some may object to the use of home prices and values to determine appropriate home disaster
loan limits. Home sale prices, they might argue, cannot be compared to repair and rebuilding
costs. For one, not all home disaster loans are for completely destroyed homes. Rather, most are
for making structural repairs (such as replacing a roof). Similarly, some may question the use of
median home values as a tool for determining loan caps. Homes in California and Washington,
DC, for example, have higher values, in part, because of their location. According to this line of
thinking, property values remain high in those areas even if the homes are destroyed. Disaster
loans, it could be argued, should be used to repair and replace the structure, not replace the
property. It could be further argued that people living in high-cost areas have higher incomes and
are therefore more capable of purchasing insurance.
Others might argue that federal disaster assistance is intended to supplement, not replace private
insurance. It could be further argued that increasing disaster loan limits induces moral hazard if
homeowners believe the limit is high enough to make them whole again after the incident. If that
is the case, some homeowners may decide not to not to insure (or decide to underinsure) their
property.27

27 For example, according to the Senate Task Force on Funding Disaster Relief “after the Midwest flood of 1993, the
Interagency Floodplain Management Review Committee reported that ... [the] provision of ... federal disaster assistance
to those without insurance [created the] perception with many floodplain residents that purchase of flood insurance is
not a worthwhile investment.” There is, however, some debate on the topic of insurance. The Senate Task Force on
Funding Disaster Relief also stated that “at least one study concluded that expecting ... federal disaster assistance did
not significantly influence individuals’ decisions about purchasing flood insurance.” U.S. Congress, Senate, Federal
Disaster Assistance, Report of the Senate Task Force on Funding Disaster Relief, 104th Cong., March 15, 104-4
(Washington: GPO, 1995), p. 64.
Congressional Research Service

10

link to page 15 link to page 15 SBA Disaster Loan Limits: Policy Options and Considerations

Variations in State and County Home Costs
Throughout the United States, there are counties that have median home costs that are
significantly higher than the rest of the nation. For example, a major disaster declaration issued
for the Camp Fire in California made home disaster loans available to individuals and households
residing in Butte, Los Angeles, and Ventura counties.28 The median owner occupied home values
for those counties in 2020 were well above the national median of $251,700 at the time at
$304,700, $615,500, and $609,200, respectively.29 In another example, in some Florida counties
with a history of hurricane damages—Collier and Monroe counties—also have median owner
occupied home values well above the national median ($443,700 and $696,900 from 2018 and
2022, respectively).30
Personal Property, Home Furnishings, and Vehicles
SBA personal property loans may be used to repair or replace clothing, furniture, cars, or
appliances damaged or destroyed in the disaster. The following section examines the cost of
furnishings and vehicles in the United States.
According to economic data published by the Federal Reserve Bank of St. Louis, from 2010 to
2023, prices for household furnishings and supplies increased 9.7% (see Figure 7).31 From 1994
to 2023 new vehicle prices increased 30.03%, and used cars and trucks increased 34.96% (see
Figure 8). The data may suggest to some that the $100,000 disaster loan limit may not presently
be sufficient to replace vehicles, home furnishings, and supplies. Others may disagree and argue
that, while some household costs have increased, others have decreased. According to the Federal
Reserve Bank of St. Louis:
It is natural to complain that some prices increase. But ... prices can also decrease. While
there are obvious seasonal fluctuations for some goods (say, agricultural products), other
goods have been declining year over year, contributing to a general price inflation that is
lower than one may think. [A] prime example is anything related to information
technology.... IT devices with a given set of characteristics have continuously fallen in
price. Or, to put it differently, a device of the same price year after year will provide much
better performance; its price by “unit of performance” must therefore be declining.32

28 Federal Emergency Management Agency, California Wildfires (DR-4407), November 30, 2018,
https://www.fema.gov/disaster/4407.
29 U.S. Census Bureau, Quick Facts, https://www.census.gov/quickfacts/fact/table/
venturacountycalifornia,losangelescountycalifornia,buttecountycalifornia/PST120221.
30 U.S. Census Bureau, Quick Facts, https://www.census.gov/quickfacts/fact/table/colliercountyflorida/PST045221, and
https://www.census.gov/quickfacts/fact/table/monroecountyflorida/PST045221.
31 Authoritative data on household furnishings and supplies from 1994 to 2010 could not be located.
32 Federal Reserve Bank of St. Louis, Not All Prices Increase, October 2, 2014, https://fredblog.stlouisfed.org/2014/10/
not-all-prices-increase/.
Congressional Research Service

11

SBA Disaster Loan Limits: Policy Options and Considerations

Figure 7. Consumer Price Index for All Urban Consumers: Household Furnishings
and Supplies in the United States

Source: Federal Reserve Bank of St. Louis, Consumer Price Index for All Urban Consumers: Household Furnishings
and Supplies in U.S. City Average, May, 2024, https://fred.stlouisfed.org/series/CUUS0000SAH31.

Figure 8. Consumer Price Index for All Urban Consumers: New Vehicles;
Used Cars and Trucks in the United States

Source: Federal Reserve Bank of St. Louis, Consumer Price Index for All Urban Consumers: Used Cars and Trucks in
U.S. City Average, May 2024, https://fred.stlouisfed.org/series/CUSR0000SETA02; and Federal Reserve Bank of St.
Louis, Consumer Price Index for All Urban Consumers: New Vehicles in U.S. City Average, May 2024,
https://fred.stlouisfed.org/series/CUUR0000SETA01.
Congressional Research Service

12

link to page 5 SBA Disaster Loan Limits: Policy Options and Considerations

Policy Options
The following sections describe policy options that Congress may consider when contemplating
disaster limits, including formulas and the establishment of disaster limit floors.
Disaster Loan Limit Formulas
Rather than periodically adjusting disaster loan limits, Congress could require SBA to set disaster
loan limits by formula, incorporating measures such as CPI, PPI, inflation, economic indicators,
and/or home values and prices. SBA applies a similar formula-based model to determine disaster
loan interest rates for individuals and households that are unable to secure a disaster loan through
a private lender:
the rate prescribed by the [SBA] Administration but not more than one-half the rate
determined by the Secretary of the Treasury taking into consideration the current average
market yield on outstanding marketable obligations of the United States with remaining
periods to maturity comparable to the average maturities of such loan plus an additional
charge of not to exceed 1 per centum per annum as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per centum, but not to exceed 4 per centum per
annum.33
A disaster loan limit formula could be applied nationwide, or regionally for areas with higher
housing costs.
Disaster Loan Limit Floors
As described in “Historical Developments,” SBA lowered disaster limits for COVID-19 EIDL
assistance in 2020 from $2 million per loan to $150,000 to meet COVID-19 EIDL demand.
According to the SBA Office of Inspector General, SBA “approved and disbursed more loans for
COVID-19 relief than for all other disasters combined in the agency’s history.”34 As mentioned
previously, the Small Business Act authorizes SBA to set disaster loan limits so long as they do
not exceed the loan limits established in statute. The absence of a statutory floor allowed SBA to
temporarily reduce the loan limit so that it could continue to provide COVID-19 EIDL assistance
to struggling businesses. While the SBA’s decision to lower loan limits may have helped the
agency meet high levels of demand, some were concerned the amount was insufficient to meet
the economic recovery needs of businesses.35
It may be argued that the factors that led to SBA’s decision to lower the loan limit were
extraordinary and unprecedented. Historically, SBA has never had to lower limits to meet loan
demand for natural disasters such as hurricanes or floods. Still, there may now be some concern
that SBA might reduce loan limits in the future if the SBA Disaster Loan Account runs low on
funding.36 If so, some homeowners and/or businesses may not be able to make a full recovery
from the incident. Against this concern it might be argued that SBA should be allowed to lower

33 15 U.S.C. §636(d)(5)(A).
34 SBA, Office of Inspector General, Inspection of the Small Business Administration’s Initial Response to the
Coronavirus Pandemic, October 28, 2020, p. 3, https://www.sba.gov/sites/default/files/2020-10/SBA OIG Report 21-
02.pdf.
35 For example, see Cardin, Schumer & Shaheen Call on SBA to Reverse Policy That Limits Economic Disaster Loan
Program (EIDL) Loans to $150k, https://www.sbc.senate.gov/public/index.cfm/2020/5/cardin-schumer-shaheen-call-
on-sba-to-reverse-policy-that-limits-economic-disaster-loan-program-eidl-loans-to-150k
36 For more information on the SBA Disaster Loan Account, see CRS Insight IN11433, Supplemental Appropriations:
SBA Disaster Loan Account, by Bruce R. Lindsay et al.
Congressional Research Service

13

link to page 18 SBA Disaster Loan Limits: Policy Options and Considerations

loan limits to meet loan demand if needed. According to this line of thought, the lower limit
would allow SBA to provide as many disaster loans as possible, which is seen as better than
denying loan applications on the basis of inadequate funding. To summarize, on the one hand,
establishing floors would prevent SBA from lowering limits to an amount Congress believes is
too low. On the other hand, floors could limit the number of loans that can be serviced if loan
demand is high.
SBA Disaster Loan Account Report
The SBA Disaster Loan Program is funded through the SBA Disaster Loan Account. The SBA
Disaster Loan Account is a “no year” account, meaning that funding does not lapse at the end of
the fiscal year. Rather, any remaining funds are rolled over to the next fiscal year. In addition to
rolled over funds (if available), the SBA Disaster Loan Account may receive annual
appropriations, revenue from disaster loan payments (including interest on the loans), and
supplemental appropriations.37
Appropriations for disaster loan administration and servicing (including disaster loan credit
subsidies to account for loan defaults), and disaster loan revenues (loan payments and default
collateral recoveries) replenish the SBA Disaster Loan Account. As funding comes into the
account, SBA disaster loans are paid as installments. Each dollar of disaster loan credit subsidy
supports about seven dollars in disaster lending authority.
Congress has provided supplemental funding for the SBA Disaster Loan Account when the
balance of the account becomes low (see Table 1). At times, however, there has been some
confusion about the remaining balance in the SBA Disaster Loan Account.
Congress has required disaster funding reports from other agencies to delineate funding activities
and estimate the date on which the funds may be exhausted. For example, after Hurricane
Katrina, Congress required the Federal Emergency Management Agency (FEMA) to issue
funding reports on the Disaster Relief Fund (DRF).38 The DRF is “an appropriation against which
FEMA can direct, coordinate, manage, and fund eligible response and recovery efforts associated
with domestic major disasters and emergencies that overwhelm State resources pursuant to the
Robert T. Stafford Disaster Relief and Emergency Assistance Act.”39 DRF monthly reports help
Congress track disaster relief funding activities and determine how much funding is available for
current and future incidents. The SBA could be required to issue a similar report on the Disaster
Loan Account. The report could include information such as the account balance, available
lending authority, monthly revenues, and cost and exhausted funding projections.

37 Congress does not always provide an annual appropriation if the SBA Disaster Loan Program is adequately funded
for that fiscal year. For more information about SBA funding, see CRS Report R43846, Small Business Administration
(SBA) Funding: Overview and Recent Trends, by Robert Jay Dilger, R. Corinne Blackford, and Anthony A. Cilluffo.
38 For more information about FEMA’s DRF, see CRS Report R45484, The Disaster Relief Fund: Overview and Issues,
by William L. Painter.
39 Federal Emergency Management Agency, April 9, 2024, https://www.fema.gov/about/reports-and-data/disaster-
relief-fund-monthly-reports.
Congressional Research Service

14

SBA Disaster Loan Limits: Policy Options and Considerations

Table 1. Small Business Administration Disaster Loan Account Appropriations,
FY2015-FY2023
($ in millions)
Disaster Assistance
Fiscal Year
Disaster Assistance
Supplemental
2023
$179.00
$858.00
2022
$178.00
$1,189.10
2021
$168.10
$35,460.00
2020
$177.10
$70,582.00
2019
$10.00
$0.00
2018
$0.00
$1,659.00
2017
$186.00
$450.00
2016
$186.90
$0.00
2015
$186.90
$0.00
Source: U.S. Small Business Administration, Congressional Budget Justification [FY2016-FY2025]
Notes: Numbers are rounded to the nearest hundred thousand. The SBA received supplemental appropriations
of $760.9 bil ion in FY2020 and $378.5 bil ion in FY2021 to assist small businesses adversely affected by the
COVID-19 pandemic.
Concluding Observations
SBA disaster loan limits have been placed in statute and created by SBA regulatory action.
Historically, businesses have been eligible for the maximum amount set in statute whereas
homeowners have been eligible for a lesser amount than has been set in statute. To some, this has
been an effective approach to (1) supplement, as opposed to replace, private insurance, (2) avoid
moral hazard, and (3) balance the desire to help disaster victims with the need for prudent federal
spending.
Others may be concerned that SBA regulatory action has not been timely. As mentioned
previously, from 1994 to 2023, disaster home loan limits were not adjusted for two decades (from
1993 to 2023). During that time inflation, building costs, and median home values and prices
increased and some homeowners may not have been capable of fully recovering from a disaster
because their disaster loans covered too small a share of their repair and rebuilding costs. There
may also be concern that SBA may reduce disaster loan limits to an amount lower than an amount
that is acceptable to Congress. On the one hand, a lack of a disaster loan floor provides SBA with
the flexibility to meet loan demand in unpresented situations such as COVID-19. On the other
hand, the lower limit imposed by SBA in such cases may not provide enough for businesses to get
by on until they can resume normal business operations. If these or other issues related to disaster
loan limits are a concern, Congress could consider taking measures to ensure disaster loans are
not prohibitively low.
Congressional Research Service

15

SBA Disaster Loan Limits: Policy Options and Considerations

Appendix. SBA Disaster Loan Categories
The following provides a brief overview of each SBA disaster loan category, including eligible
recovery activities and loan terms.
Personal Property Disaster Loans
Personal Property Disaster Loans cover only uninsured or underinsured property and primary
residences in a declared disaster area. Personal Property Disaster Loans can be used to repair or
replace clothing, furniture, cars, or appliances damaged or destroyed in the disaster. Interest rate
ceilings for Personal Property Disaster Loans are statutorily set at 8% per annum or 4% per
annum if the applicant is unable to obtain credit elsewhere.40 The loans can have maturities up to
30 years. The maximum loan amount for a Personal Property Disaster Loan is set in regulation at
$100,000.41
Real Property Disaster Loans
Real Property Disaster Loans provide creditworthy homeowners located in a declared disaster
area with up to $500,000 to repair or restore the homeowner’s primary residence to its pre-
disaster condition. Only uninsured or otherwise uncompensated disaster losses are eligible for
loan assistance. The loans may not be used to upgrade a home or build additions to the home,
unless the upgrade or addition is required by city or county building codes. Secondary homes or
vacation properties are not eligible for Real Property Disaster Loans.42 Limits for Real Property
Disaster Loans are set in regulation.43
Business Physical Disaster Loans
Business Physical Disaster Loans are available to almost any business located in a declared
disaster area.44 Business Physical Disaster Loans can be used to repair or replace damaged
physical property—including machinery, equipment, fixtures, inventory, and leasehold
improvements—that are not covered by insurance. Interest rates for Business Physical Disaster
Loans cannot exceed 8% per annum or 4% per annum if the business cannot obtain credit
elsewhere.45 Business Physical Disaster Loans can have maturities up to 30 years. The maximum
loan amount provided for a Business Physical Disaster Loan is $2 million.46

40 15 U.S.C. 636(d)(5)(B) and 15 U.S.C. 636(d)(5)(A).
41 13 C.F.R. §123.105(a)(1).
42 Qualified rental properties may be eligible for assistance under SBA’s business loan program.
43 13 C.F.R. §123.105(a)(2).
44 See C.F.R. §§123.200 and 123.201 for eligibility requirements.
45 15 U.S.C. §636(d)(4)(C) and 15 U.S.C. §636(d)(5)(C).
46 15 U.S.C. §636(b)(8)(A).
Congressional Research Service

16

SBA Disaster Loan Limits: Policy Options and Considerations

Economic Injury Disaster Loans
EIDLs are available to businesses located in a declared disaster area that have suffered substantial
economic injury, are unable to obtain credit elsewhere, and are defined as small by SBA size
regulations.47 Small agricultural cooperatives and most private and nonprofit organizations that
have suffered substantial economic injury as the result of a declared disaster are also eligible for
EIDLs. The loans are designed to help businesses meet financial obligations and operating
expenses that could have been met had the disaster not occurred. The loan proceeds can only be
used for working capital necessary to enable the business or organization to alleviate the specific
economic injury and to resume normal operations. The interest rate ceilings for EIDL are
statutorily set at 4% per annum or less and the loans can have maturities up to 30 years.48 The
maximum loan amount for EIDL is $2 million.49

Author Information

Bruce R. Lindsay
Daniela E. Lacalle
Specialist in American National Government
Research Assistant

R. Corinne Blackford

Analyst in Small Business and Economic
Development Policy

Acknowledgments
Mari Lee and Amber Wilhem, Visual Information Specialists, Visualization and Geospatial Information
Systems Section, assisted with figures for this report.

47 Size standards vary according to many factors including industry type, average firm size, and start-up costs and entry
barriers. For more information on SBA business size requirements see CRS Report R40860, Small Business Size
Standards: A Historical Analysis of Contemporary Issues, by Robert Jay Dilger, R. Corinne Blackford, and Anthony A.
Cilluffo. See also 13 C.F.R. §123.300 for eligibility requirements.
48 The 4% interest rate ceiling is established in regulation: 13 C.F.R. §123.302.
49 15 U.S.C. §636(b)(8)(A).
Congressional Research Service

17

SBA Disaster Loan Limits: Policy Options and Considerations

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
R47245 · VERSION 5 · UPDATED
18