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Community Disaster Loan Program

Major disasters often cause financial losses that disrupt the normal daily operations of community services such as schools, county offices, and fire and sheriff districts. The Community Disaster Loan (CDL) Program provides operational funding for local governments to continue to operate after a substantial revenue loss caused by a major disaster. These losses adversely affect the ability of the community to provide essential municipal services. CDL authority is defined in Section 417 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, and 44 CFR Part 206, Subpart K.

To be considered eligible for a CDL, local governments must show that a financial loss occurred during their current or following fiscal year as a result of a major disaster. The financial loss must be greater than 5 percent of tax and other revenues. However, some state/tribe/territory laws prohibit local governments from going into indebtedness.

The application period for the CDL Program begins with the last day of the disaster incident period as declared by the President through the end of the local government’s subsequent fiscal year. The process to complete the application for a CDL must occur before the end of the eligible fiscal year. Local governments are encouraged to start the CDL application process as early as possible.

What is CDL?

The Community Disaster Loan (CDL) Program provides operational funding for local governments to continue to operate after a substantial revenue loss caused by a disaster.

Local governments can apply if:

  • Located in a Presidentially declared disaster area
  • Substantial revenue loss is greater than or equal to 5%
  • Affects the current or subsequent fiscal year

FEMA Analysts guide local governments through:

  • Explanation of requirements
  • Qualification analysis
  • Meeting applicable deadlines

CDL has three implementation phases: Application, Maintenance, Cancellation.

Download the What Is CDL? flyer

CDL At-a-glance

  • Local governments agree to the terms and conditions, as well as FEMA’s procedures for maintenance and cancellation, if the loan application is approved.
  • The loan amount shall not exceed 25% of the annual operating budget of the locality for the fiscal year, up to $5,000,000.
  • FEMA issues a promissory note that must be signed by the applicant and, at times, co-signed by the state/tribe/territory.
  • The term of the loan is five years, but may be extended to ten years. The funding disbursement schedule is adjusted as need arises.
  • Interest accrues only on portion of funds drawn by applicant. Current interest rates can be found online by searching the U.S. Treasury’s Daily Treasury Yield Curve Rates.
  • Funds must be used for immediate needs to continue existing essential municipal services, or to expand existing municipal services to meet disaster-related needs.
  • Starting on the second year, and for the life of the loan, your local government must provide audited financial statements that FEMA uses to assess current needs for continued disbursements.
  • The loan may be cancelled, if the local government can show it has a cumulative operating deficit.

Path Line to Participation

The path line to participate in the CDL program includes the following major steps. Applicant is determined eligible if located in a declared disaster area and begins the process before the end of the eligible fiscal year. The FEMA Analyst performs the intake meeting and initial financial evaluation. The FEMA Analyst and the Applicant work together to prepare the financial analysis and application. The Applicant also obtains the governing body consent. The Applicant submits the application packet through the Governor's Authorized Representative and the FEMA Regional Office. FEMA reviews the loan application and the State/Region recommendation. The Applicant is notified upon loan signature and account establishment. Contact your FEMA Region for more information.
<p style="margin-left:0in; margin-right:0in">The path line to participate in the CDL program includes the following major steps: determine eligibility, financial evaluation, analysis/application, application submission, and formal review.</p> Download Original

Fact Sheets and Other Documents

Last Updated: 
05/20/2019 - 12:00