Sherry Chandler

No loans for the poor in NOLA?

from the NYTimes last week, a clue to what the rebuilt New Orleans will look like:

The Small Business Administration, which runs the federal government’s main disaster recovery program for both businesses and homeowners, has processed only a third of the 276,000 home loan applications it has received.

And it has rejected 82 percent of those it has reviewed, a higher percentage than in most previous disasters, saying that many would-be borrowers did not have incomes high enough, or credit ratings good enough, to qualify. The rejections came even though the Federal Emergency Management Agency has referred more than two million people, many of them with low incomes, to the S.B.A. to get the loans.

To a large degree, that high rejection rate appears to reflect a mismatch between existing government aid programs and the large number of low-income people affected by this year’s hurricanes. Despite the widespread poverty in the most damaged regions, the Small Business Administration has not adjusted its creditworthiness standards, which are roughly comparable to a bank’s.

In fact, the loans that have been approved appear to be flowing to wealthy neighborhoods in New Orleans but not to poor ones, according to a list of loans released by the government and mapped by The New York Times.

Possibly related posts:

Mr. Rich White & Mr. Poor White

The Anti-Katrina?

The myth and the reality

The Conscience of a Liberal

Old and homeless

Related posts brought to you by Yet Another Related Posts Plugin.