Post-Katrina federal aid overwhelmingly rejected poor homeowners’ loan applications

Evidence

Thus, those among the hundreds of thousands of Gulf Coast homeowners whose homes were decimated by the hurricane and flooding and who sought federal support to rebuild and revive their properties were directed to apply for low-interest disaster loans from the Small Business Administration (SBA). A staggering 82 percent of the 276,000 loan applications received to date have been rejected, overwhelmingly because incomes are too meager or credit ratings too low to qualify. The loans that have been approved have gone exclusively to wealthier and whiter neighborhoods in New Orleans, those thus more readily able to rebuild. Rejected applicants are eligible for home repair grants from the FEMA but the grant amount in each case is capped at about one-seventh the loan amounts available from the SBA. — David Theo Goldberg, The Threat of Race, 438

Categorization

• SEED: An essay angle: how disaster recovery policy converts racial segregation into an ostensibly neutral credit-score outcome, and how ‘rebuild’ programs functionally decide who deserves to return.
• ADDENDUM: Reinforces the ‘Grafting & Growth’ and sacrifice pieces’ logic: infrastructure and state care are channeled selectively, deciding whose community gets rebuilt and whose stays buried.