The Community Development Corp. of Long Island is offering low-interest loans of up to $25,000 to superstorm Sandy victims whose insurance settlements are being held by mortgage lenders, leaving them struggling to afford the costs of rebuilding their homes.

"Many people are living in unbearable situations waiting for money that they are owed. But the checks are not flowing," said venture capitalist David Calone, a member of the nonprofit housing agency's board of directors. "We want to get money out to people so they can make these repairs."

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Insurance companies regularly make large settlement checks payable to both homeowners and their mortgage lenders, which hold most of the money in escrow accounts to protect against fraud and ensure the proceeds go toward repairs.

In the wake of Sandy, however, homeowners have said the process has made it difficult to pay contractors, prompting many to delay repairs or go into debt or deplete savings to pay renovation bills themselves.

The one-year loans from Community Development Corp. charge annual interest of 1.5 percent. Borrowers must use licensed contractors and be up to date on their mortgage and property tax payments. The agency is also making rehabilitation experts available to consult with homeowners about their repairs.