LAWRENCE — Members of the state's congressional delegation are urging the Small Business Administration to take another look at the applications for disaster loans that were denied to victims of last month's South Lawrence fire.
U.S. Sen. John Kerry and U.S. Rep. Niki Tsongas, sent a letter to the SBA Wednesday, asking the agency to share information with their offices so they can help families overturn the denials.
Many victims were hoping the low-interest federal disaster loans would help get them back on their feet. The Jan. 21 fire destroyed 14 buildings, including multi-family homes and small businesses on Parker, Market and Springfield streets.
"Victims of the fire shouldn't now be made victims of red tape," Kerry said. "We urge the agency to make sure they've turned over every stone to aid our Lawrence homeowners and small businesses."
The letter came three days after The Eagle-Tribune reported on the wave of loan denials. As of yesterday, six victims had applied for the loans, and all were rejected.
The four-paragraph letter mostly sums up the victims' frustration over the denials.
"The victims of this fire have had their lives uprooted and they are struggling to get back on their feet," the letter reads. "We understand that the SBA must maintain criteria for applicants to verify that they will be able to repay their loans, we must also do all we can to ensure that the victims of this disaster are given the assistance they need to rebuild their lives."
Nirmal Sooknanan, who had applied for a loan with his mother, said he hopes the legislators' letter isn't just lip service.
The Sooknanans, who owned 372 Market St., had hoped to move into another home by now, but after being denied, the five family members are living in a one-bedroom apartment.
"We've gotten a few phone calls from the Small Business Administration and Niki Tsongas' office this week," Sooknanan said. "It's been a lot of legwork, getting paperwork. ... I hope it's not for nothing."
According to data from the Small Business Administration, about half of those who apply for loans are denied. The most common reason for denial is inability to repay, said Jack Camp, a spokesman with the SBA.
Camp said they can get anywhere from a couple of hundred applications a day, to 10,000 a day like they saw with Hurricane Katrina. In Massachusetts alone, there have been four disaster declarations since April.
Under the loans, homeowners can receive up to $200,000 in loans to rebuild or relocate. Business owners can obtain up to $1.5 million, and renters, up to $40,000. The interest rates range from 2.75 percent to 8 percent, and are fixed for a maximum 30-year-term. The lower rates are for those without other financing options. But those with other options have to pay the loan within three years.
Fire victims have until March 25 to apply.
"I just hope we're not another statistic and people forget about us," Sooknanan said.
