Use Disaster Funds Wisely and for Intended Purpose

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Release date: 
July 8, 2011
Release Number: 
1994-018

WESTFIELD, Mass. -- State and federal disaster assistance payments are bringing needed financial help to homeowners, renters and business owners who suffered damages in the June 1 severe storms and tornadoes.

However, those payments come with some words of advice from officials from the Massachusetts Emergency Management Agency (MEMA) and Federal Emergency Management Agency (FEMA):

Be cautious, use the funds wisely and only for their intended purpose.

To date, disaster grants and loans totaling more than $2.7 million have been approved for survivors in Hampden and Worcester Counties.

"All expenditures must be disaster-related," Federal Coordinating Officer Nick Russo said. "If an applicant spends the money on anything other than the intended purpose, additional assistance may

not be available."

Housing Assistance grants are intended for one of three uses only:

  • basic housing repairs for homeowners,
  • short-term rental assistance or
  • reimbursement of hotel/motel expenses.

Other Needs Assistance grants are intended to help replace essential personal property and meet medical, dental, funeral, transportation and other serious disaster-related needs not covered by insurance or other federal, state and charitable-aid programs.

Most funds are deposited electronically and a letter follows in the mail to explain how the money is to be used.

Here are some tips for survivors to help them get the most out of their personal disaster recovery payment:

  • Keep all receipts.
  • Deposit the check promptly -- do not cash it!
  • Do not be tempted to pay household bills.
  • Do not make purchases unrelated to needs created by the disaster.
  • Do not use the funds for travel.

Grants are subject to an audit. Recipients are strongly encouraged to fully document their disaster-related expenses. They must keep receipts or bills for three years to demonstrate how all of the money was used in meeting disaster-related needs.

It is important to note that grants are tax free and are not a loan. They do not have to be repaid. They

are not counted as income for welfare or other federal benefit programs and they cannot be garnished.

In addition to the grants available through FEMA, low-interest disaster loans from the U.S. Small Business Administration (SBA) are available to homeowners, renters, businesses and private nonprofit organizations of all sizes.

FEMA's housing assistance and grants for disaster-related medical and dental expenses, funeral and burial expenses do not require individuals to apply for an SBA loan. However, applicants who receive SBA loan applications must submit them to the SBA to be eligible for assistance that covers personal property, vehicle repair or replacement, and moving and storage expenses.

Completing the loan application does not commit them to take a loan if it is offered, but applying

for it is an important part of the federal financial disaster assistance process.

FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.

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