Reagan Decrees S. California Disaster Area

President Reagan today signed a declaration designating earthquake-damaged Southern California a major disaster area, allowing federal relief aid for more than 10,000 homeowners and businesses.

The declaration cleared the way for the release of federal funds for temporary housing, grants of up to $5,000 for individuals and families, low-interest loans to cover uninsured property and business losses and other programs to supplement state and local recovery efforts.

“One-stop” disaster centers are expected to be set up throughout the devastated area to assist victims in filing claims.

Thursday’s 6.1 earthquake caused an estimated $137 million in damage to more than 9,100 homes and about 1,400 businesses, according to the Federal Emergency Management Agency, whose officials surveyed the area and will coordinate the recovery operation.

Assistance in Los Angeles County will include debris removal, restoration of public services and rebuilding of damaged public buildings.

The assistance covers only losses not covered by insurance or other aid programs, a federal spokesman said.

Applicants should not expect immediate aid as “losses must be verified and damage inspected before assistance can be provided,” he added.

Officials said the disaster centers--locations of which are to be announced Thursday--will be open as long as necessary to accept applications, and people without immediate needs might want to wait a day or two before filing their claims.

With the declaration, the Small Business Administration is now expecting to handle a rush of low-interest loan requests from property owners.

SBA officials said the agency will be able to lend up to $100,000 on damaged residential property and up to $20,000 on personal property. The loan interest rates will be either 4% or 8%, depending on what the borrower can afford.