Sponsors (2)
The bill expands SBA disaster lending to let homeowner associations and similar entities finance common‑area repairs and mitigation—improving recovery and resilience for many communities—while increasing federal financial exposure and leaving some large or already‑maxed communities at risk of underfunded repairs or higher borrower costs.
Owners in homeowners associations and condominium communities can access SBA‑guaranteed disaster loans (up to $2 million for covered entities, $500,000 for others) to repair shared residential common areas after a disaster, enabling collective recovery of multi‑unit properties.
Homeowners and renters in recently damaged areas can obtain mitigation loans to implement measures that protect previously damaged property, reducing future risk to common areas and improving community resilience.
Borrowers can receive long repayment terms (up to 30 years) and deferment options similar to existing SBA disaster loans, lowering near‑term payment burdens and making recovery financing more manageable.
Taxpayers face greater federal exposure because the SBA will guarantee loans for community repairs and mitigation, potentially increasing government liabilities and fiscal risk after disasters.
Some communities may remain unable to repair damaged common areas if they have already reached applicable loan limits under existing rules, leaving certain developments without needed recovery funding.
Interest rates are tied to U.S. public debt plus 0.25%, so borrowers could face higher long‑term costs if market interest rates rise after a disaster.
Based on analysis of 2 sections of legislative text.
Adds an SBA-guaranteed loan program for residential common-area repairs and disaster mitigation with set caps, interest, and term limits.
Official title: To amend the Small Business Act to establish a program under which the Small Business Administration may make supplemental disaster loans to homeowner associations to repair common areas damaged by disasters and implement disaster mitigation measures, and for other purposes.
Introduced June 4, 2026 by Darren Michael Soto · Last progress June 4, 2026
Creates a new SBA loan program that lets the Small Business Administration guarantee loans to eligible residential entities to repair shared/common areas and pay for mitigation in recently declared disaster areas. The loans are supplemental to existing SBA disaster lending authority, have defined maximums and terms, and use an interest rate tied to U.S. Treasury yields. The program sets borrower exposure caps (a minimum $2,000,000 cap for major local employers and $500,000 for other borrowers), a 30-year maximum term, streamlined collateral rules for small loans, deferment options, and definitions for covered entities, covered repairs, and what counts as a recent disaster area (including several disaster determination pathways and an option for a governor certification).