First Federal Checks Go to Fire Victims : Loans: Owners of seven homes that went up in flames are the first Laguna Beach residents to get emergency assistance funds from the U.S. government.

LAGUNA BEACH —  Like their neighbors whose homes were destroyed by the firestorm three weeks ago, Barton Long and his wife, Peggy, will have insurance money to cover most of the rebuilding costs for their Skyline Drive house.

But insurance may not cover everything, so on Monday the Longs were among the first in Laguna Beach to accept a $10,000 low-interest loan from the federal government.

“For us, it’s strictly a safety net,” said Barton Long, a retired construction company owner. “But it is welcome.”

In a short ceremony at the city’s recreation center, which has turned into emergency assistance headquarters, Steve Waddell, district director of the U.S. Small Business Administration, presented $10,000 checks to seven individuals or couples whose homes were left in ashes by last month’s wildfire.

When disasters strike, the SBA is the federal agency designated to provide low-interest, long-term loans to homeowners, renters and business owners who need assistance to pay for uninsured or underinsured losses.

Bruce Hodgman, an SBA spokesman, said 743 loan applications have been issued in Laguna Beach so far, 412 of which have gone to homeowners or renters. The balance of the applications have gone to businesses, most of which were located in residents’ homes, Hodgman said.

Renters are eligible for loans of up to $20,000, businesses up to $1.5 million.

In burned-out areas from Malibu to San Diego, the SBA has issued 2,200 loan applications and approved $7 million in loans. And with loans being approved within a week from the day of application, the amount is increasing up to $2 million a day, Hodgman said.

The Longs are typical of the homeowners who are eligible to apply for the homeowner loans, which can run up to $120,000 and carry an interest rate of 3.625%.

They’re not sure whether their insurance will cover the costs of such things as bringing their rebuilt house up to new building codes that their former three-bedroom, 2,000-square-foot house didn’t have to meet when constructed 25 years ago. If such costs are covered, the insurance will be used to pay off the loan.

“The whole purpose of this is for those certain unknowns,” said Long, who estimated the market value of his former house at $450,000.

Said Hodgman: “We want these people to understand that they don’t have to wait.”

When loan applicants settle with their insurance carrier, the SBA adjusts the loan amount and lends the applicant the difference.

“That way they can get started on reconstruction immediately,” he said.

The SBA will be in Laguna Beach for at least six months, visiting work sites and disbursing loans as applicants need them.

Speaking briefly at the SBA ceremony, Mayor Lida Lenney credited those who came to pick up their checks, as well as the federal officials who promptly processed the loan applications.

“In Laguna Beach, we’re not used to asking for help,” she said. “We’re used to taking care of things ourselves.”

“Here is a demonstration,” she added, “of what government is doing right and doing well.”