Use Disaster Funds Wisely and for Intended Purpose

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Release date: 
December 26, 2012
Release Number: 

HUNT VALLEY, Md.  -- State and federal disaster assistance is bringing needed financial help to homeowners, renters and business owners who suffered damage or loss as a result of Hurricane Sandy.

But Maryland Emergency Management Agency and Federal Emergency Management Agency officials are urging storm survivors to use disaster funds wisely and only for their intended purpose.

"Many people have great needs and the money they receive may not cover all they would like," said MEMA Executive Director Ken Mellette. "But if you spend money on anything other than what your FEMA letter tells you, additional assistance may not be available."

Funds are available through grants for housing or other needs and through low-interest federal loans to replace housing or personal effects.

Housing Assistance grants must be used only for

Basic housing repairs for homeowners

  • Short-term rental assistance
  • Reimbursement of hotel/motel expenses

Other Needs Assistance grants should be used 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.

Low-interest disaster loans from the U.S. Small Business Administration are also available to homeowners, renters, businesses and private nonprofit organizations of all sizes.

"We want you to use the money to meet specific disaster-related needs," Federal Coordinating Officer Mike Lapinski said.

Here are tips to help you get the most out of your personal disaster recovery payment:

  • Keep all of your receipts.
  • If you receive your grant in the form of a check, make sure to safeguard those funds and only spend the money on disaster-related expenses.
  • Don't be tempted to pay household bills with the disaster recovery payment.
  • Don't make purchases unrelated to needs created by the disaster.

Disaster grants are subject to an audit and recipients should keep receipts or bills for three years to demonstrate how all funds were used in meeting disaster-related needs. These 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.

 "If you receive an SBA loan application after you apply with FEMA, be sure to complete and return it to the SBA," Lapinski said. "If you don't, you can disqualify yourself from any more federal assistance."

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 you to a loan, but it is an important part of the federal financial disaster assistance process.

President Obama's major disaster declaration for Maryland made federal assistance available to affected individuals in Somerset County.

For more information about this disaster, go to, or

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: 
December 28, 2012 - 16:00
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