Can I sell my home if it is being used as collateral for a loan? I can't afford to keep it and must sell for a loss

I would review the loan documents or just call the SBA and ask. I couldn't really answer without reviewing the loan documents. Likely you have a personal guaranty with the SBA as well.

If I understand your question correctly, you have two liens on your property---your mortgage (which is in 1st position) and the lien placed on your property by the SBA to secure the "emergency" loan. You may actually be in a short-sale situation; meaning the proceeds of the sale will not be enough to satisfy the outstanding liens. If that's the case, you are going to probably have to go through the short-sale process with the holder of the 1st mortgage (bank). You will need the bank's approval of the short-sale and you will have to submit a short-sale package to be reviewed before getting that approval. As to the SBA, you will probably have to call to find out what options are available. Without reviewing the loan documents, I can't provide you a definitive answer. You are going to thave to contact the SBA to find out if there is other collateral that is acceptable and/or what other options may be available to you. You may even be able to get the bank (1st mortgage) to approve a portion of the sale proeeds of your home to be paid to SBA, which would reduce tha amount you owe on the SBA loan. Please be advised that I am licensed to practice in PA and NJ only. Further, this is intended as informational only and not as legal advice. There is no attorney-client relationship created by this response. I highly recommed that you seek advice from an attorney in your state who is familiar with the issues you are facing. Thank you.