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Barbour: Housing grants delayed by computer woes, fed inspections

Delays in people receiving Hurricane Katrina homeowner grants are the result of federal inspectors monitoring the program and computer problems at the Small Business Administration, Gov. Haley Barbour says.

Barbour previously had said homeowners should have their grants by Tuesday, the one-year anniversary of Katrina.

“That was before we knew about the SBA’s computer problems and before the HUD Inspector General’s Office showed up,” Barbour said Wednesday.

The grants are funded by the federal Community Development Block Grant program but handled by the state.

Barbour told The Sun Herald newspaper that about 8,000 people, or almost half of those who applied, have received “closing packets” telling them how much of a grant they’ve been approved for and how to close on it, similar to a mortgage closing.

He said that number should be 10,000 by week’s end.

Some applicants have complained about the slowness of the program, saying uncertainty about what they will receive prevents them from moving forward with rebuilding.

The $3 billion program is providing grants of up to $150,000 each for homeowners who lived outside the federal flood zone but lost their houses to Katrina’s storm surge.

Barbour said inspectors from the U.S. Department of Housing and Urban Development decided a few weeks ago to audit the grant program on the front end, not after checks had already gone out.

He said despite delays, he welcomes HUD’s oversight.

“It’s totally appropriate for them to inspect everything we do, because nobody’s ever done this before,” Barbour said.

“I expect everything we do to be investigated and everything we do to be audited. If we end up a month late with the program, I think people will still like that better than the FBI or HUD showing up later asking them questions about the money they received,” he said. “A friend asked me, ‘Why not just send everybody who applies a check?’ That’s what the Red Cross did. We’re just not going to do that.”

Federal law says that if people receive SBA disaster loans, they have to pay back the loans with any grant money they receive, Barbour said.

Barbour said of the 17,000 people who applied for the homeowner grants, about 14,000 will be approved.

He said about 1,500 were found to be ineligible because they were inside the flood zone. Barbour said many of those who do not qualify for this initial program probably would be eligible others that are being planned or are awaiting federal approval.