Six months after wildfires roared through California, destroying nearly all of the town of Paradise, the people who lived in the town were still without a place to call home. Many, like Claudi Perez, a U.S. citizen who was born in Argentina and moved to Paradise in September of last year, couldn’t afford or didn’t qualify for help from the Federal Emergency Management Agency (FEMA). Some of the 18,000 people who were left homeless by the flames had to find themselves without a roof over their heads until their insurance companies could come up with money.
As of this month, Federal Emergency Management Agency (FEMA) funds to help victims covered only temporary housing and temporary utilities.
Meanwhile, many private lenders in California are stepping in to help homeowners get back on their feet.
“You might have lost some of your money, but you can rebuild,” Cathy Clark, president of Palisades Home Mortgage Bankers in Los Angeles, told FP. Her company is working on personal loans for hundreds of homeowners. “We’re providing no or very little required collateral and pretty flexible loan terms. We’re helping them get back to their homes as quickly as possible.”
FEMA expects to have more than $500 million in disaster relief funding available as it continues to pick up the pieces in California. (For more on how this money is distributed, go here.)
Clark, who was brought up in Southern California, said she felt it was her duty to step in. She said she wanted to help people rebuilding houses near her own neighborhood in Los Angeles County. Her company is now working with 400 homeowners across California.
There are still thousands of victims in Northern California who still don’t have homes to rebuild — others who suffered much more traumatic injuries from the fire, or whose owners simply didn’t return to the scene in time to see the rebuilding effort underway. But those victims, including many people with small businesses, aren’t getting the same help from FEMA as private lenders.
Los Angeles is an extreme example of this situation, but FEMA can’t do much for those people because it doesn’t have the flexibility — as private lenders do — to help with down payments.
For anyone in need of emergency housing, Clark said, the best solution is a private lender or a non-profit housing agency.
“There are a lot of places where families are not located,” Clark said. “This is where we can help them. If I had enough money to rebuild a house, I’d go directly to FEMA.”
This article appears in the May 2018 issue of The Agenda, a bi-monthly publication of The Independent Institute, the country’s largest free-market foundation. The Agenda is available at i.independent.org. Subscribe here.