$417 Million More in Quake Aid OKd : Assistance: Clinton Administration approves money for low-interest loans and grants. Amount includes $47.5 million for new Valley VA facility.


Faced with a continuing influx of applications for aid from homeowners and businesses, the Clinton Administration announced Thursday that it is making $417 million in new emergency loans and grants available to victims of the Northridge earthquake.

The assistance includes $326 million in low-interest loans to repair and rebuild homes and businesses under the auspices of the Small Business Administration and $90.8 million that was previously approved by Congress as part of a presidential contingency fund.

The largest grant will be $47.5 million to build a veterans affairs outpatient care and research facility to replace the 431-bed, quake-devastated hospital at the Sepulveda VA Medical Center.

The money for the grants is part of a $550-million contingency fund included in the congressionally approved $8.6-billion quake aid package but was left to President Clinton’s discretion to spend. The new loans will be supported by $75 million remaining from a 1992 emergency spending measure.


Budget Director Leon E. Panetta said the enormous number of applications to the SBA--which are still arriving at a rate of 3,000 a day two months after the Jan. 17 temblor--could mean that additional money will be needed to meet the agency’s obligations. He indicated that the money could come from other programs, including $447 million remaining in contingency funds, or might require the Administration to seek new money from Congress.

The SBA has received nearly 400,000 requests for applications. It was given loan authority of $1.1 billion in the emergency earthquake bill.

So far, the SBA has approved $410.2 million in loans to cover damage to homes and personal property and $39.8 million for businesses, although only a small fraction of applicants have received checks. Typically, about 40% of the applications sent out are returned for processing and 50% to 65% are subsequently approved, budget officials said. The average loan is $35,000 to $45,000.

“The key right now is to see how much is going to be approved and at what level,” Panetta said. “We have not, as far as I know, in this country experienced the dimensions of the kind of disaster we saw in Los Angeles. . . . What we’re seeing now in the numbers of applications and the numbers of people that are being served is unprecedented.”

At the same time, Panetta said the Federal Emergency Management Agency, which coordinates the federal disaster response and also provides short-term shelter and other aid, does not appear to be in danger of running short of money. FEMA received $4.7 billion in the emergency spending bill.

FEMA reported Thursday that it has received 454,650 applications for relief. Thus far, it has approved $472.9 million in grants to 183,065 applicants for temporary housing and emergency home repairs.

FEMA said the total number of applications far exceeds the previous record for a U. S. disaster--304,000 after Hurricane Hugo in 1989.

Other grants include $28 million to finance about 2,200 temporary jobs for dislocated workers to clean up, repair and rebuild quake-damaged properties; $8 million for local economic development planning and assistance to minority businesses, and $2.8 million for repair efforts in hard-hit, low-income communities.