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Mississippi sends out first round of homeowner grants

A year after Hurricane Katrina struck the Gulf Coast, Mississippi has begun to distribute grant checks to homeowners to help them rebuild property that was damaged by the huge storm.

As of Monday, the state had paid out 40 grants ranging from $6,000 to $140,000, said Scott Hamilton, spokesman for the Mississippi Development Authority, a state agency assisting in the housing grant program.

Some 17,000 homeowners on the Gulf Coast had applied for the first phase of Gov. Haley Barbour’s grant program, but Hamilton said that not all would qualify.

The program provides up to $150,000 each to homeowners who lived outside the federal flood plain but lost their houses to Katrina’s water. A second phase of the program, to cover low-income and working poor homeowners, is still being developed.

Relief organizations, including international charity Oxfam America and the Mississippi NAACP, have criticized state officials for the delay in providing much-needed funds to homeowners who are trying to rebuild in the region.

Oxfam on Monday issued a news release that called on the state to work with community leaders to develop a comprehensive housing recovery plan by the end of September that meets the needs of the region’s poorest residents.

“In a state where 60,000 homes suffered severe damage, only around 30,000 households were eligible for the initial program, and now less than three dozen checks have gone out,” said Minor Sinclair, Oxfam America’s director of U.S. regional programs.

Mississippi’s grant money is part of $5 billion allocated to the state from the federal Community Development Block Grant Program to respond the housing crisis created by Katrina.

Hamilton said the state is moving as fast as possible.

“We walk a tightrope between getting the rebuilding funds to people immediately and doing all of the verifications necessary to ensure that the funds go to those individuals for whom Congress intended it to go,” Hamilton said.

Hamilton said that the state had sent out 6,100 notification letters to homeowners. Once the homeowners receive the letters they have to contact closing agents, which in most cases will be their mortgage companies. The closing documents are sent to MDA before the homeowners receive their grant checks.

Hamilton said the state has received about 200 closing packets from homeowners, but that total does not include weekend closures that could be received this week.

Reports issued to coincide with the one-year anniversary of Katrina’s devastation in Mississippi and Louisiana listed a lack of affordable housing chief among problems facing the two states. Several studies said the lack of affordable housing continues to weaken the labor pool.

“If people have nowhere to live or if they can’t afford to live where they work, it becomes difficult for them to go where the jobs are. … The end result is that recovery in the struggling areas is being slowed, sometimes to a near halt,” said a report by the Nelson A. Rockefeller Institute of Government and the Public Affairs Research Council of Louisiana.