City Councilman John McLaughlin, who is in the midst of elevating his own house, said he is outraged by the SBA regulation. “It’s patently unfair,” McLaughlin said. “It’s a loan, not a gift.”

He added that grant eligibility should not be affected by a loan, since homeowners still have to pay off the debt. “The SBA has been good about making money available, but it’s not free,” McLaughlin said. “There are people who need that free [grant] money, who don’t have income sources or don’t have savings.”

He said he is debating whether it is even worth it for him to submit his NY Rising application. He took on an SBA loan, and between that and his flood insurance reimbursement, he said, he doubts he would be eligible for much grant money.

“I don’t have faith in these grant systems,” McLaughlin said, “and this is proof.”