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Release date: 
July 23, 2013
Release Number: 

TRENTON, N.J. -- The Federal Emergency Management Agency in partnership with the State of New Jersey has approved $125 million in low-interest Community Disaster Loans for eligible jurisdictions in New Jersey. The program helps jurisdictions that have suffered substantial revenue losses from a major disaster to perform their governmental functions.

As of July 18, FEMA has received 83 loan requests and approved 53. Community Disaster Loans are intended to help local governments and jurisdictions to carry on existing official functions or to expand such functions to meet disaster-related needs.

“Community Disaster Loans are based on the need to bridge the revenue gap so local governments can continue functioning after a disaster,” said FEMA Federal Coordinating Officer Gracia Szczech. “Typically, the loans help cover operating expenses such as salaries for police officers, firefighters and teachers while the community recovers.”

The maximum loan is $5 million. Jurisdictions must demonstrate the need for assistance to perform government functions. The term is five years but can be extended to 10 years if the applicant chooses. Interest on the loans equals the rate for five-year maturities, adjusted to the nearest 1/8 percent, determined by the Secretary of the Treasury on the day the note is executed. Loans cannot exceed 50 percent of a jurisdiction’s operating budget for the year in which the disaster occurs.

The loans cannot be used as a jurisdiction’s non-federal cost share for any federal grants. Nor can they be used for capital projects, such as new buildings, or to repair or restore damaged public facilities. Congress allocated additional funds to the Disaster Assistance Direct Loan Program Account after Superstorm Sandy.

Local Government organizations and Public Educational Institutions interested in obtaining a loan should contact the State of New Jersey Department of Community Affairs or the Department of Education respectively. Information about the program in New Jersey, including the status of applications and approvals, is available online at


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Last Updated: 
July 23, 2013 - 16:19
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