Paying Off Your Mortgage With Disaster Funds

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Release date: 
June 16, 2008
Release Number: 
1762-018

DENVER, Co. -- Applying insurance proceeds to your mortgage may reduce the amount the Small Business Administration (SBA) can lend to you. If you have received or expect to receive insurance proceeds for your disaster loss, please contact SBA before you voluntarily pay down or pay off your mortgage.

However, if a mortgage holder has required you to use an insurance settlement to pay off or to pay down the balance of your mortgage, SBA must have evidence of that mandatory use of the insurance proceeds. That evidence may be in the form of a letter or other written documentation, or it may be in the form of a telephone conversation between the mortgage holder and SBA. This is necessary so that SBA can treat the insurance recovery as unavailable for making repairs. 

SBA disaster representatives are at the Disaster Recovery Center to answer any questions about insurance and explain how SBA?s disaster loans can help pay for your recovery. The Disaster Recovery Center is located at:

Windsor High School Gymnasium
1100 W. Main St.
Windsor, CO 80550

For additional information residents and business owners may also call the SBA Customer Service Center at (800) 659-2955. Hearing impaired individuals may call (800) 877-8339.

In addition to the SBA, representatives from the Federal Emergency Management Agency (FEMA), the Colorado Division of Insurance, the United Way, and other volunteer agencies will continue to provide information and referrals for disaster assistance from 9 a.m. to 7 p.m. Monday through Saturday.

How to Apply for FEMA Assistance:

Larimer and Weld county residents and business owners can begin the disaster application process by registering online at www.fema.gov or by calling 1-800-621-FEMA (3362) or 1-800-462-7585 (TTY) for the hearing and speech impaired. The toll-free telephone numbers are available from 8 a.m. to 6 p.m. Monday through Friday. Applicants registering for aid should be prepared to provide basic information about themselves (name, permanent address, phone number) insurance coverage and any other information to help substantiate losses.

The Colorado Division of Emergency Management (CDEM), within the Department of Local Affairs, is the state?s emergency management agency. The agency works to identify and lessen the effects of emergencies, disasters and threats to Colorado by developing effective prevention, preparedness, mitigation, response and recovery actions for all disasters and emergencies.

FEMA coordinates the federal government?s role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terrorism.

Last Updated: 
July 16, 2012 - 18:46
State/Tribal Government or Region: 
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