Earthquake: The Long Road Back : 77 Families Get Loans in 1st Wave of Federal Aid : Relief: Small Business Administration is praised for swift disbursement of $2.5 million to those whose homes were damaged in the quake.

Seventy seven families whose homes were damaged by last week’s massive earthquake received one the first infusions of federal cash Wednesday in Van Nuys when the Small Business Administration handed out $2.5 million in disaster relief loans.

The first check went to Eli Landaverde of Arleta, a 24-year-old stock clerk, who picked up the initial $10,000 installment of his $25,700 loan at the Mid San Fernando Valley Chamber of Commerce on Wednesday afternoon.

“It took four days,” said Landaverde, whose family applied for federal aid Saturday to fix wall cracks, repair a toppled fence and replace possessions destroyed in the Jan. 17 temblor. “It was great.”

Despite widespread complaints that government aid agencies have been slow to respond to people in need, the 27 families who picked up their loan checks Wednesday praised SBA officials for working quickly to process their applications. Fifty other families will have their checks mailed.

“It was fast, fast, fast,” said Betty Widener, 71, whose Granada Hills home was heavily damaged in the 6.6 quake. She and her husband, Carl, have been sleeping in their motor home parked in the driveway for the past week.

The SBA disaster loans are available to anyone who suffered losses in the quake and are intended to pay for losses not covered by private insurance. Because the loans are administered by the government, repayment terms are generally longer and interest rates are lower than those offered by private lenders.

By Wednesday, SBA officials had sent out 86,000 disaster relief loan applications to families and merchants whose homes or businesses were damaged in the quake. Of that number, about 2,200 had been returned and will be processed over the next several days.

“This represents the beginning of long-term assistance in Southern California,” said Mike Howland, the SBA’s acting regional administrator.

SBA spokesman Tom MacKenzie said about 70% of loan applications are approved and about 90% of loan recipients qualify for a low-interest rate--3.625%--because they would likely be unable to obtain private credit to cover their losses.

Personal loans, which can be repaid over 30 years, are capped at $200,000 for home improvements and $40,000 to replace possessions. Merchants whose businesses were affected by the quake can also apply for loans of up to $1.5 million.

Default rates vary from region to region, but MacKenzie said the national rate is 2% to 3%. “It’s very low--in the low single-digit range,” he said.

Robert Belloni, area director of the SBA’s disaster relief programs, said the loans disbursed Wednesday ranged from $2,700 to $215,000, but averaged between $45,000 and $50,000.

Bob and Pat Hopkins, whose Simi Valley home was declared uninhabitable by building inspectors, said demolition teams have already begun clearing their lot. Their loan will help rebuild their house and their lives.

“This helps a lot,” said Pat Hopkins, 56, a retired police sergeant who applied for her loan the day after the quake. It was approved two days later. “You’re so used to government being slow, but this was fast.”

To protect against fraud, SBA officials said loan applicants must have their property inspected to ensure that it was indeed damaged by the quake. MacKenzie also said the loans are disbursed in installments so the SBA can monitor how the money is spent.

“We urge people to keep their receipts,” MacKenzie said. “This is designed not only to protect the taxpayers, but also to protect people from getting ripped off by contractors.”