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Family denied loan to rebuild after the Marshall Fire

The Wyss family said they closed on an SBA loan in January, and then months later the agency told them they didn't qualify anymore.

BOULDER, Colo. — Many families who lost a home in the Marshall Fire applied for a loan to help them rebuild. The Small Business Administration (SBA) approved more than $90 million for homeowners. Now months after the fire, some of those survivors are surprised to find out they can't get that money right now even after closing on those loans. 

In January, Wendy Wyss said she and her husband felt some hope after the federal government in January approved a $200,000 loan for her family to rebuild. That hopeful feeling went away last week. 

"I don't know when this is going to end," she said. "We have these moments it feels like it might be OK and then something like Friday happens when we have this and it feels like all is lost."

Wyss said the SBA told her in April that she does not qualify for the loan anymore because right now the agency believes her insurance will pay for everything. 

That is not what builders are telling Wyss though. She thinks her family is several thousand dollars short – insurance will only cover a fraction of the cost to rebuild their home. 

"I don't know where the numbers are coming from, where they got this," said Wyss. "It is far from reality."

According to an official in the SBA Office of Disaster Assistance, this type of situation can sometimes happen if SBA approves the loan before the insurance claim is settled. The loan amount can be reduced later on if the payout from the insurance company is more than what SBA is estimating it will cost to rebuild a home. 

The official said a homeowner can provide documentation from a contractor to prove the cost of a rebuild will be higher than SBA's estimate. Then the agency will restore the loan amount above the insurance proceeds.

"There is a path for disaster survivors to get those disaster loans," said the SBA official. "We want them to know those funds are available to them."

The official from the agency couldn't say why their estimates for the cost of a rebuild in Boulder County were so much lower than the quotes families are getting. He said the agency won't know that answer until they have enough cases to look at where people asked for an increase in their loan amount.

SBA is asking people, like Wyss, to get an estimate from a contractor and let the agency know that the loan amount should go up.

It's an option Wyss is looking into so her family can get enough money to move back to their property. 

"We will figure it out," she said. "We are going to stay here."

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