Homeowners approved for assistance from the state’s flood recovery program might soon be eligible for full reimbursement for repairs completed in their homes now that the Restore Louisiana Task Force has tweaked the program.
If approved by the federal government, “this is going to result in all eligible homeowners in the program receiving 100 percent reimbursement,” said Gov. John Bel Edwards, who proposed the change to the Task Force.
The rules approved unanimously Friday need a final stamp of approval from the U.S. Department of Housing and Urban Development, but a top state official said that should be coming within a week.
“In our estimation, this is a non-substantial action plan amendment. It doesn’t change allocations, and it doesn’t change grant recipients,” said Pat Forbes, director of the Louisiana Office of Community Development.
Until now, homeowners who have low-to-moderate income and have someone elderly or disabled in their household have been granted full reimbursement of money spent on repairs before they entered the state program. Homeowners in any of the other phases receive just 50 percent.
Forbes said the change will result in 10,000 homeowners receiving a total of $110 million. The change will not affect who is eligible for assistance.
The task force’s decision came as good news to Vereta Lee, a school supervisor in Baker and member of the East Baton Rouge School Board, whose home off Mickens Road in north Baton Rouge took on 6 feet of water in the August 2016 floods.
Lee said she expects to receive an additional $6,000 that she will use to re-furnish the home she shares with her son and four grandchildren.
“I was thankful when the governor mentioned today they were going to provide 100 percent back to the homeowners. I was so elated,” said Lee, who is moving back into her home from a Federal Emergency Management Agency trailer this weekend.
State officials are still hoping the federal government will loosen the funding rules for people who received disaster loans from the Small Business Administration. Those loans count as a duplicative federal benefit, and some 5,000 homeowners who took that assistance have been denied help from $1.3 billion Restore Louisiana program, Forbes said.
Forbes took several questions from Task Force members about how those people could get help.
The state is holding onto enough money to give grants to those homeowners should Congress pass a law that says an SBA loan is not duplication of benefits or if HUD reinterprets the rules, Forbes said. A law that would do this is pending in the U.S. Senate, and HUD is currently reviewing some of the rules due to a recent law change.
“We have ample funds to replace those SBA loans at any stage of it, whether the relief we get is just for funds not drawn or for all funds drawn,” Forbes said.
According to documents provided at the meeting, the Restore Louisiana homeowner assistance program is projected to cost $649 million with the change made Friday. If SBA loans are removed as duplication of benefits, the program will cost $1.2 billion.
LSU economist Jim Richardson, a member of the Task Force, asked Forbes how long the state would hang on to that money reserved for SBA loan recipients.
“At what point do we say, hey, we have to spend it someplace else?” Richardson asked.
Forbes said the governor has asked him to set a deadline, and he anticipates it will be in the fall.
“That’s really a conversation with the congressional delegation about when we would have a reasonable expectation we would get a yes or no answer,” Forbes said.
He added that it’s important the state make other recommendations on ways to spend the money if it there is no favorable decision on the SBA loan issue. Forbes said the money could also be used for programs involving flood control infrastructure, economic development or rental housing.
“Earlier investments in recovery are better than later investments in recovery,” he said.
Forbes said the increased reimbursement awards are possible now, because more applications than expected turned out to be ineligible for funding and reconstruction costs were lower than expected.
Forbes said no action is needed on the part of homeowners who may be eligible for increased reimbursement. Once the money is approved, people already issued money from the Restore Louisiana program will receive a check in the mail within a few weeks. For people still in the program, the money will be calculated into their awards.
A total of 52,071 surveys have been submitted to the Restore Louisiana program, according to figures released Friday. Of those, 41,610 homeowners have been invited to apply for help, and 37,387 people have done so. As of Wednesday, the program had awarded $344 million to 12,800 people.