Gov. Haley Barbour has submitted to federal officials his proposals for the next phase of Mississippi’s housing grant program for Hurricane Katrina victims.

The first phase of the program provided up to $150,000 each to homeowners who lived outside the federal flood plain but lost their houses. Some 17,000 people applied for the grants, but not all were approved.

The second phase, announced by Barbour on Thursday, is designed to help 7,000 to 10,000 low to moderate income homeowners whose homes were damaged by the storm surge but were not eligible for phase one.

Under the new program, homeowners would receive a subsidy of up to $50,000 to fill the gap between the cost to rebuild or repair and the homeowner’s ability to pay, according to a news release from Barbour’s office.

The subsidy also would be available for homeowners who choose to sell the damaged property and relocate somewhere else within the lower six counties in Mississippi. To be eligible for the subsidy, the homeowner must agree to stay in the home at least five years, either in the pre-Katrina site or in the relocated home.

An additional subsidy of up to $25,000 would be available to homeowners with disabilities or special needs.

The money for the overall housing grant program is part of the $5 billion the state was allocated from the federal Community Development Block Grant Program to respond to the housing crisis created by Katrina.

“Housing is the most critical component of our recovery from Hurricane Katrina and these two new initiatives will help thousands more displaced coast families take another step toward restoring normalcy in their daily lives,” Barbour said in the release.

The governor said he has submitted his plans to the U.S. Department of Housing and Urban Development and he hopes federal officials will move quickly to approve the program.

On Thursday, Barbour also announced a change to the current way the Mississippi Home Corporation allocates tax credits provided under the federal Gulf Opportunity Zone Act.

Barbour said the changes will encourage the creation of innovated mixed income developments that will provide new rental housing for families between 60 percent and 80 percent of the area median income.