Local governments and rural electric cooperatives that borrowed money to fund disaster recovery work could be reimbursed by FEMA for the interest they paid on those loans. The reimbursement equals the lesser of the actual interest paid or what the loan would have cost at the federal prime rate. The change would apply retroactively to qualifying interest from the prior nine years, and FEMA would have 30 days to publish alternative procedures and one year to pay states with pending claims. Only at least 90 percent of loan proceeds must be used on FEMA-eligible disaster activities for the borrower to qualify.
Average Household Impact
- Local government and co-op disaster-loan costs — FEMA now reimburses qualifying interest
Congressional Summary
FEMA Loan Interest Payment Relief ActThis bill requires the Federal Emergency Management Agency (FEMA) to reimburse a local government or electric cooperative for interest paid on a loan used for emergency or disaster-related activities later paid for by FEMA assistance. The bill provides for similar reimbursement of interest to states for projects that are pending obligation.The bill retroactively applies to interest incurred by a local government or electric cooperative in the nine years preceding enactment of the bill.FEMA must reimburse states for loan interest for emergency or disaster-related projects that are pending obligation on the date of the bill’s enactment. FEMA must publish procedures for such reimbursement within 30 days after the bill’s enactment and states must apply within 60 days after publication of the procedures.The interest that qualifies for reimbursement may not exceed the amount of interest that would have been paid if the loan's interest rate were equal to the most recent prime rate.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-04-10
- Date Added
- 2026-05-21
- Source
- Congress.gov →
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