HUD releases $3B in Katrina homeowner grants

Published 7:00 pm Tuesday, July 11, 2006

U.S. Housing and Urban Development Secretary Alphonso Jackson said Monday that his agency has released $3 billion to the state of Mississippi to help thousands of homeowners recover from Hurricane Katrina.

The release of the funds means thousands of qualified homeowners in Mississippi will shortly be receiving up to $150,000 to help them recover from Hurricane Katrina. The remaining $2 billion in CDBG funding will be made available to Mississippi once the state submits an amendment to its action plan for HUD’s review, Jackson said in a statement.

“Today we take another step closer toward helping make Mississippi homeowners whole again,” said Jackson. “Throughout this process, Mississippi was intent on getting this money to the very people who need it most. I’m confident that with the appropriate safeguards in place, Mississippians have created a homegrown plan to rebuild their local communities.”

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The first of thousands of Katrina housing grant checks are expected to be mailed out this week.

The grants are going to homeowners who lived outside the federal flood plain but lost their houses to Katrina’s water. Louisiana is conducting a similar grant program.

The Mississippi Development Authority, which is administering the grants, began taking applications in April. More than 16,500 people have applied.

HUD’s release of the funds appears to have settled complaints from mortgage companies and watchdog groups that homeowners might be more susceptible to con artists and scammers and the arrangement will mean many hard-hit neighborhoods won’t be rebuilt.

Gov. Haley has said one reason for giving the money directly to homeowners is it would allow them to relocate to higher ground, if they so choose. He has said the grants would still be subject to mortgage and other liens, similar to insurance payments.

Mississippi’s grant plan also includes:

— An Elevation Grant Program, in which about $250 million will be made available to eligible homeowners up to a maximum $30,000 per grant. The money will help homeowners defray the added costs associated with raising homes to meet new elevation requirements.

— A Local Assistance Program, in which $5 million will help Hancock, Harrison, Pearl River, and Jackson counties to pay for the added costs of paying additional permitting and building inspectors for one year.

— A Fraud Prevention and Investigation Program, in which the MDA will devote $5 million for the creation of a Katrina Fraud Prevention and Investigation Team to augment other state and federal efforts to mitigate waste, fraud and abuse.

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