“It’s good news for cash-strapped Sandy victims that HUD is revising their policy that penalizes homeowners who simply couldn’t afford to take on any more debt, and who therefore prudently declined SBA loan offers,” Schumer said in a statement. “We need to maximize the support that hammered homeowners receive and this change paves the way for that to happen. The devil is in the details and HUD should make the upcoming changes as expansive as possible,” said Schumer.

In instances where applicants received an offer of SBA assistance, but turned it down and are now seeking CDBG assistance, Schumer said that HUD’s new guidance will provide grantees — New York State and New York City — additional flexibility to issue CDBG disaster aid based on individual circumstances, “provided that the grantees make the most effective use of their CDBG resources and meet the statutory directive that funds be used for necessary recovery costs.”

“This is a common sense rule change so that homeowners and families devastated by Superstorm Sandy are not unfairly punished for turning down SBA loans in order to avoid falling further into debt,” Gillibrand said in a statement. “It is critical that HUD issue guidelines that will allow thousands of storm victims to receive desperately needed aid.”