Federal officials are reviewing a $600 million port expansion proposal that has sparked outrage on the Mississippi Gulf Coast, where advocacy groups want the money spent on unmet housing needs in the hurricane-ravaged region.

Brian Sullivan, a spokesman for the U.S. Department of Housing and Urban Development, said Friday that the agency will take a look at the legality of the plan. HUD has to approve the plan before it can proceed.

“Essentially, the primary yardstick is whether the activity is eligible. It’s a statutory thing,” Sullivan said.

HUD received the proposal on Dec. 12 and has 45 days to respond, Sullivan said.

“As I understand it, it’s technically an amendment to reprogram $600 million from one program to another,” he said.

The Mississippi Development Authority has said the port expansion money would be taken from the $2.25 billion remaining in the state’s Homeowners Assistance Grant Program, which is funded by block grants.

Several organizations, including the Mississippi NAACP, Oxfam America and the Mississippi Center for Justice, are opposed to the plan, citing housing concerns. According to FEMA’s latest figures, people are still living in 12,259 federal travel trailers or mobile homes.

At least two congressional leaders also have asked HUD to reject the proposal. Reps. Barney Frank, D-Mass., and Maxine Waters, D-Calif., sent HUD letters in October that said the proposal would “constitute an unwarranted diversion of funds and a disservice to displaced Mississippians still in need of affordable housing.”

MDA spokeswoman Melissa Medley said on Friday that all comments for or against the plan were submitted to the federal government “so HUD can get the full picture.”

James Crowell, president of the Biloxi chapter of the NAACP, was surprised to learn that MDA had already submitted the proposal. Crowell said housing advocates have been pressing municipal leaders to oppose the project.

“In Biloxi, we’ve had a number of citizens to go before the city council to state their needs and what they’re asking for to get back into their homes,” Crowell said. The $600 million would come from the first phase of the homeowners program. That phase provides up to $150,000 each to homeowners who lived outside the federal flood plain but lost their houses to Hurricane Katrina’s storm surge in 2005.

As of last week, MDA said it had paid nearly $1.1 billion in grants to 14,795 homeowners, and agency officials say there’s enough money, even with the diversion, to cover everyone who’s eligible for the program.