The Small Business Administration has approved the restaurant for a disaster loan of almost $1 million.

There’s just one problem: Newly drawn FEMA flood maps show the cafe is at high risk of flooding again, raising the question of whether it makes sense to rebuild there or move elsewhere.

The cafe is not alone.

A WNYC and ProPublica analysis of federal data shows at least 10,500 home and business owners have been approved for $766 million in SBA disaster loans to rebuild in areas that the government now says could flood again in the next big storm. The data, which shows loans approved through mid-February, was obtained via a Freedom of Information Act request.

More loans could be going to flood-prone areas. The analysis did not cover Long Island or Connecticut.

The loans require borrowers to get flood insurance, which in turn could encourage some to rebuild properties to be more flood-resistant. However, for many owners there’s no requirement they raise their properties to the heights FEMA recommends.

The result: the federal government is helping people rebuild despite the risk that flooding will again destroy the properties.

The SBA says it’s not their job to assess whether it’s smart to build in flood-prone areas.

“Our mission is to help these homeowners and business become whole again,” said Carol Chastang, an SBA spokeswoman. “We really aren’t in a position to tell people where or where not to rebuild.”

Such a hands-off approach worries a diverse coalition of advocates — including conservative groups, environmental organizations, insurance associations and housing coalitions. These groups are urging government at all levels to change the way it builds in disaster-prone areas and insures such properties.

Environmental groups like the National Wildlife Federation say the best flood protection are wetlands and to leave stretches of the coast undeveloped.

“Ideally we’re going to help people move away from the flood zone and not give them assistance to rebuild exactly as is,” said Joshua Saks, the federation’s legislative director. “But we recognize it’s a very personal decision, it’s a local decision.”

For Sam Corigliano, the decision is obvious. Corigliano opened the Great Kills Marina Café in 1980 and built it into a neighborhood fixture over the years.

“We’ve been here 32 years, had 32 years of good luck, and good fortune and laughs. We’ve had parties here, christenings, family events, a lot of happy times. We had one bad day,” Corigliano said. “You don’t walk away from one bad day.”

The program

Disaster loans are one of the main tools the federal government has to help homeowners, nonprofits and business owners after something like Sandy. The Small Business Administration provides as much as $200,000 for damaged homes and $2 million for businesses. In rare cases, homeowners might qualify to have a portion of their mortgage refinanced with an SBA loan.

The loans carry low interest rates – as little as 1.7 percent for home loans and as low as 4 percent for business loans — and can be repaid over 30 years.

As of mid-February, the SBA approved more than 21,500 disaster loans worth $1.5 billion for Sandy-related damage, according to a copy of the loan database WNYC and ProPublica obtained through a Freedom of Information Act request. The SBA estimates it could ultimately approve as much as $2.5 billion worth of Sandy-related disaster loans.

The loans are an important tool the government uses to help stabilize an area’s tax base, said James Rivera, associate administrator in the SBA’s Office of Disaster Assistance and the official in charge of the disaster loan program.

“It’s good government. I mean, basically it’s what the private sector won’t do,” Rivera said.

The SBA also checks to make sure applicants have an ability to repay the loans. Government loan officers will check an applicant’s credit history, finances and collateral. The SBA approves about 52 percent of applicants, Rivera said.

Field inspectors assess damage and determine the maximum amount the SBA will loan.

The SBA disburses the money like a construction loan – in chunks as work is completed – minus whatever a borrower’s insurance covers.

The flood zone

At the same time the SBA was approving disaster loans, the Federal Emergency Management Agency was releasing new “advisory” flood zone maps.

Approved maps ultimately determine flood insurance rates and help builders decide how high to make their properties. The existing maps that govern building along the coast are from 1983.

The new preliminary maps show FEMA thinks far more properties throughout the region are at risk of flooding. FEMA also says many of those properties already in flood zones should be raised even higher to avoid future damage.

FEMA rushed to release the maps to ensure property owners had the data as they start to rebuild, said Michael Byrne, FEMA’s coordinating officer for New York operations.

“It’s the best science we’ve got. We certainly hope people will take it seriously,” Byrne said.

But the maps won’t become final for as long as three years. And it’s up to local governments to decide if they want to require higher elevations before then.

New York City requires “substantially” damaged properties to rebuild to the existing flood elevations. But in many cases that’s not as high as FEMA now recommends.

Corigliano, owner of the Marina Café, said he’s not raising his restaurant. It would cost too much and take too long.

“You’re probably talking about maybe two years of paperwork. You’re talking Army Corps of Engineers to sink piles and so on and so forth,” he said.

There is no data yet on how many property owners who received a loan will actually rebuild and, of those, how many will raise their properties to withstand a future flood.

Of the loans made in New York City, 83 percent went to a property in areas FEMA says are at risk of flooding, the data shows. In New Jersey 71 percent went to a proposed flood zone.

The recipients

The biggest loan approved as of mid-February was a $1.5 million loan to the Fairfield Beach Club, a private beach and tennis club on the shore of the Long Island Sound in Connecticut. FEMA has not yet released new maps for Connecticut, but the effects of Sandy certainly suggest the club is at risk.

The club’s century-old wood buildings were badly damaged by surging waters, including some that were shifted on their foundations, said Arthur McCain, a member of the club’s finance committee.

McCain said the club will try to raise buildings to help protect them from a future flood. But there’s only so much the club can do.

“If we really wanted to avoid future damage we’ve got to close the club and move inland two or three miles.” McCain said.

Families have enjoyed the beach club since it opened in the late 1880s, he added. And he said if the club were to close it would just leave a blighted piece of land.

McCain also pointed out that the SBA money is a loan and the government will make money off the club, which also pays a considerable amount for flood insurance.

The loans, however, can cost the government.

The default rate on disaster home loans is about 10 percent, and it’s about 20 percent for some business loans, according to the SBA. The administration estimates that it costs taxpayers 11 cents for every $1 of disaster loans.

“These loans do not come without risk to taxpayers,” said Pete Sepp, executive vice president for the National Taxpayers Union. “We need to have a policy that carefully considers whether rebuilding in flood prone areas makes sense and whether such building ought to be encouraged by government or at least abetted by government through the use of aid and loans.”

But locals like Nicholas Dorman don’t want to leave their homes. Dorman, a fireman, bought his home in Staten Island in 2006. It was his first and has been home to his young family.

The house is now leaning after he says the surge smashed boats against the property. He was approved for a $192,100 disaster loan from the SBA. He’s not sure it will be enough and hasn’t even thought about how high he might build. But he wants to find a way.

“It meant everything to us. I had my pension in there. Everything I had into that house. To me it was gorgeous,” Dorman said.