This is not true. In most cases, FEMA grants do not have to be paid back. If you have insurance that covers your temporary housing costs, but you ask FEMA to advance you some money to help you pay for those costs while your insurance is delayed, you will need to pay that money back to FEMA after you receive your insurance settlement.
After applying, you may be referred to the U.S. Small Business Administration (SBA) for an SBA disaster assistance loan as part of the disaster assistance process.
FEMA works with SBA to determine if you should get money for personal property or transportation assistance from FEMA or SBA. FEMA is not allowed to provide money for these losses to people who may qualify for an SBA loan.
FEMA will automatically refer you to SBA to be considered for a disaster loan if you meet SBA’s income standards. FEMA will use the household annual gross income and number of dependents listed on your application to determine if FEMA will refer you to SBA.
You don’t have to accept an SBA loan offer; however, if you are approved and you do not accept it, you will not be referred back to FEMA for personal property or transportation assistance. You can call the FEMA Helpline at 800-621-3362 if you have additional questions or need more information.